In the DoJ vs. Gates Battle, It's The Pedantic Against the Insolent

Professional wrestling doesn't even come close to the verbal baiting and vitriol exhibited in the legal battle between the U.S. Department of Justice and Microsoft Corp.

If financial services companies, among many others attempting to plan the development of their network infrastructures, weren't so concerned about how this activity is going to affect the progression of their desktop applications, they might even enjoy the public beating Gates is getting- finally up against an opponent he can't mow down.

But it's hard to find an analyst who contends that the DoJ is right to go after Microsoft on this particular issue-bundling its browser application with its Windows 95 operating system to provide additional functionality for consumers-even if Microsoft technically violated its consent decree. "It was wrong for the DoJ to go after Microsoft on this technology issue; the licensing breach with Sun is a better issue," says Bill Blundon, evp of Boston-based consulting firm Extraprise Group.

Though no one will deny that Microsoft was "insolent" in its response to the court's preliminary ruling (Microsoft was ordered to offer its browser and operating system as separate products as well as integrated. Microsoft "complied" with a two-year-old operating system.). The company did itself and industry a disservice, say sources, by goading the DoJ to involving itself in systems development.

Rumors have been swirling

over the past few weeks that Citicorp is looking to make a payments play for First Data Corp. And considering that Citi's credit processing portfolio is empty on the purchasing side, it's not a bad fit, say analysts, many pointing to FDC as an excellent takeover target. "Citibank has always been very interested in the payments industry, and it would not be surprising for them to take more aggressive moves in the payments space," says one industry source.

So how will the deal go down? Says one analyst on the condition of anonymity, "I'm hearing Ed Horowitz is going to do a deal with FDC for bill payment, by buying them."

Should this deal take place, Citibank faces a major hurdle: convincing FDC's merchant banks to stay on. "But if they could finesse the issue of the bank alliances, a purchase would make sense," says another analyst.

When asked about the acquisition, Citibank officials would not comment, and FDC claimed no knowledge of any impending deal or discussions.

Silent but deadly. that's how Citibank's transactional Web site crept out over the Internet. Silent because most Citi analysts and electronic banking consultants don't even seem to be aware that the site exists. Lucky for Citi. This deadly Internet junction runs with all the speed and excitement of watching paint dry. And only those with Netscape Navigator and a 128-baud modem qualify for the thrill. Though currently working with Microsoft, Netizens browsing with Explorer cannot access their accounts.

But don't ask how Ed Horowitz's celebrated Advanced Development group could come out with such a site. It didn't. The site was developed by Bill Campbell's group. Eventually, Horowitz will have his day, say sources.

-bers tfn.com

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