Tuesday, July 28, 2009

The Economics of Microsoft

Once windows became prevalent, Microsoft office bundled (Word, Excel, PowerPoint) were successfully integrated into Windows. The bundling of Office increased market share, profits, and limited competition. The end result was Microsoft Office bundle were priced much lower than the competition base on functionality and features. This in fact was the guiding principle of economics of information.

Back in the 1990s Internet was just getting popular. AOL Dali up was the popular choice and most people used Netscape as their browser. Bill Gates and Microsoft sensed the Internet was ready to explode, so they developed Internet Explorer in the mid-1990s. Of course, Internet Explore was bundled into Windows for free, which eventually killed Netscape. Since Microsoft was quickly becoming a monopoly, antitrust trails followed. At one point, the antitrust court tried to break up Microsoft, but was unsuccessfully due to Judaical mistakes and a somewhat flimsy case.

One of the key things Bill Gates did at Microsoft was attract and surround Microsoft with best people in the industry. Many of the most innovative software design and development people came to Microsoft due to Bill Gates. To stay successful, Microsoft must evolve again in the web 2.0 environment.

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