28 October 2005

Microsoft threatens to withdraw Windows in S.Korea

This story is a bit off topic for this course. However, it is an interesting study in corporate strategy when network externalities are present. Microsoft, in its previous antitrust suits, has offered settlements with antitrust (i.e.,anti-monopoly, or competition) authorities that included bundling other media players (a settlement rejected by the European Commission). Despite this unfavorable ruling (for Microsoft, which is under appeal), Microsoft has made no statements suggesting a withdrawl from the European market. This threat of withdrawl would threaten to strand many users of Windows in South Korea, which is by many measures at the vanguard of IT use (as we have seen previously). Why would Microsoft do this? Are they bluffing? If not, what risks are they taking? How big do you think these risks are for their long term future?

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1 comment:

KuangChiu Huang said...

Microsoft’s threat to withdraw could be merely bluff, but I opine these reasons to bolster its announcement. 1. Microsoft could be highly possible to lose the antitrust lawsuit 2. Comparing with EU, South Korea is not so important to please 3. South Korea has not fully prepared and supported for open operation systems (e.g., Linux) against Windows. If I could consult for South Korea government, I would recommend it looks for some partners (EU, China or India) to counter Microsoft together.