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The Bundling Brouhaha

Today, when you buy a PC, it is very often preloaded with Windows and a Microsoft applications suite that includes everything from business programs to e-mail. In fact, Department of Justice attorneys say Microsoft gives system vendors a better deal on Windows if they bundle Office.

That's been a stumbling block for competing applications developers like Qualcomm, which says it may be easier to get its Eudora e-mail program bundled if Microsoft doesn't have the same monopoly clout.

"We welcome the opportunity to compete for space in computer boxes," says Jeffrey Belk, Qualcomm general manager of Eudora products. "Eudora is extremely strong software, but sometimes we don't get the opportunity to get it in front of people." Recently, Eudora launched a free version of its e-mail program to promote visibility.

"Consumers are deprived of the choice without knowing it," says Michael Cowpland, president and chief executive officer of Corel in a statement.

But Cowpland worries that a breakup may only strengthen Microsoft's hold. "To break up the company into a collection of Baby Bills would only serve to multiply the problem," Cowpland writes in the company's only public comment on the matter. "It would split one monopoly into multiple monopolies working in tandem." Instead, Corel recommends the Justice Department use this case to establish rules that prohibit unfair practices and hold Microsoft accountable for its actions.

Still at It

In its latest bout of bundling, Microsoft will include its Windows Media Player 7 with the Windows Millennium edition. WMP 7 just entered public beta to stay on schedule with Millennium, which is now in Beta 3 and expected to ship later this year.

This tactic targets RealNetworks, whose RealPlayer and RealJukebox compete with the Windows player. A company representative says RealNetworks expects that the government recommendations will prevent Microsoft from ruling the desktop through questionable tactics.

"Consumers will have more choice about the provider and the mix of applications on the desktop," says Kelly Jo McArthur, senior vice president and general counsel at RealNetworks. "But the devil be in the details" of the recommendation and final ruling, she adds.