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CNN Live At Daybreak

Microsoft Allows Changes to Operating System; Napster Stares Into the Abyss

Aired July 12, 2001 - 07:05   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL LIN, CNN ANCHOR: Microsoft is making it possible for the competition to make changes to its Windows operating system, this just two weeks after an appeals court ruling on the antitrust law lawsuit filed back in 1997.

The software giant is changing its licensing agreement with computer makers, allowing them to be more flexible, having more flexibility to configure different versions of the desktop program.

Now, after the announcement, Microsoft stock closed at $66.50, up $2.02.

All right, to clarify all of this, just so we know what we're looking at, we asked CNN's interactive correspondent Allison Tom to join us this morning.

Good morning Allison.

ALLISON TOM, CNN INTERACTIVE CORRESPONDENT: Good morning, Carol.

LIN: Thank God you're here.

All right, so, we log on. What is supposed to happen? What are the options there?

TOM: Well, the options really depend on what computer makers decide to do, so that the first beginning part of this is that consumers will probably not see a whole lot of changes right off the top, the reason being is that it really depends on what the computer manufacturers are going to add or change.

What's different and new about this is that they actually give computer makers the option to remove Internet Explorer, which has not been something that's been done before. So they can now replace that with an Internet or a different Web browser. And that's completely up to the PC makers. But whether or not we as the consumers see that in the end product is really yet to be seen.

LIN: Well, why do you think Microsoft is doing this, then?

TOM: Well, of course, this move has really been in a direct reaction to the antitrust case -- and, of course, that a lot of this is really to make sure that this is Microsoft's image, so that it maintains intact and it will not hurt Microsoft's bottom line.

So we will have to see in the next coming months as to what happens. But, again, Windows XP is still expected to launch on October 25. So that date has not changed. And this is also part of the reason why this happened, is so that they could still make that target date without any changes.

LIN: All right. Well, since we got you up early, do you have an update on the Napster case?

TOM: Napster right now is offline. And, apparently, we are expecting that they are going to make some sort of comment earlier today. They will actually have an -- appeal a decision that the federal judge made yesterday in regards to Microsoft and what they want -- or, excuse me -- in regards to Napster.

And right now it's been offline. It's been offline since July 2. People are not going to be able to use the file-swapping service right now. And it is not expected to go back online unless Napster decides that they can be completely 100 percent compliant to make sure that these files that are swapped are only the ones -- excuse me -- that have the copyright materials.

LIN: Got you.

All right, well a lot of those folks who were downloading music on Napster already know that they've got other places to go on the Web to do just that anyway.

TOM: They do. It's a little bit more difficult right now.

LIN: Right.

TOM: But they still do have some other options.

LIN: All right. Thanks, Allison. We'll see you later.

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