Subject: Re: boomberg bloopers
From: Ian Lance Taylor <>
Date: 17 Feb 2001 21:20:59 -0800

Frank LaMonica <> writes:

> Many developers working on open source projects
> today are funded directly or indirectly by commercial companies who plan
> to make money by selling all sorts of other added value.

While I generally sympathize, I think it is appropriate to note that
many dot-com companies had similar plans.  Most of them failed.  In
the process of failing, they harmed a number of previously existing
businesses, such as travel agents.

I don't think there is anything wrong with that--it's capitalism at
work.  But I think it does serve as a cautionary tale about this part
of the open source business plan.  It's natural for Microsoft to be
concerned about it.  Open source companies can hurt Microsoft even if
they fail.

> Look at MicroSoft's cash reserves and the insane salaries of their upper
> managers if you think they are only generating a "fair" profit.

In a free market economy, a fair profit is whatever the market will
bear.  I believe that Microsoft is a monopoly, so computer operating
systems is no longer a free market.  But I don't see any evidence to
suggest that Microsoft is engaging in predatory pricing.  Admittedly,
Microsoft makes most of their operating system money from sales to PC
manufacturers, and the details of those contracts are secret.

Also, don't forget that Microsoft's huge cash reserves are partially
due to their ever rising stock price, which permits them to hold down
employee salaries and to highly leverage their capital when making
sometimes profitable investments in other companies.