Every culture -- even cultures that supposedly share a common language -- has its own vocabulary. And every culture has its own system of values. Part of the challenge of joining a culture is learning its vocabulary and coming to understand its values, even if you don't share them. Failing to make that effort at understanding can be fatal even before you know it. Twenty years ago, when I was a graduate student at Stanford University, my failure to understand the local culture almost ended my career before it began.

I was in the first year of a Ph.D. program, taking all the prerequisite courses that make sure you or your fellowship have paid enough tuition to keep the place running. One course in particular was incredibly boring, and I made the mistake of sharing this insight with the professor. NEVER DO THIS!! Professors and bosses of all types are meant to be kept in the dark about your real feelings, unless of course you feel up to the task of killing the boss or otherwise taking him or her out of action before they can use your words against you, because they always will. I've been on both sides of this system and it's impossible for the boss to forget a slight: it always comes back, just like that incredibly embarrassing story your Mom will tell with only the provocation of a single neutrino's passage through her cerebral cortex. Life is cruel this way.

So I told my professor that his course was boring. It's not that he was boring, I said, but that I'd already covered the material as an undergraduate. But in truth, he was incredibly boring, and the subject was immaterial to any sentient being with the exception of this single professor, who was of course, the "world's foremost authority." In my experience, there are two types of "world's foremost authority." One is a really really smart person who knows a lot about some important subject. The other is a kinda smart person who knows a lot about an unimportant subject -- a subject so unimportant, in fact, that there is no competition in the "world's foremost authority area." My professor was of the latter school of expertise.

He said that if I was bored, there was no reason I had to take the course. What a relief!

But when I did some further research with the departmental secretary, I discovered that the course was required and there was no precedent for being allowed not to take it. I had to take the course, boring or not. And to not take the course would mean not receiving my degree and probably not even returning for the second year of the program. Yes, I didn't have to take the course, but I also didn't have to remain at Stanford. Not knowing the lingo, that little detail had washed over me unnoticed during my earlier moment of joy. Be suspicious of joy.

You've got to know the language and the value system. IBM, for example, values making lots of computers. When a friend of mine was recently trying to sell his Internet company to IBM, the representative from Big Blue kept asking if the operation would require many servers? Not many, my friend kept explaining, trying to downplay the hardware requirements of his business. But IBM likes businesses that require a lot of hardware. Prodigy was started as much to use up IBM's supply of otherwise unsaleable minicomputers as for any other reason. Sears never saw that one coming. And the IBM guy was trying in his own, Big Bluish way to say that the Internet business would be more attractive if it used a lot of servers. But my friend didn't get the message until it was too late. No sale.

Now we come to some recent activities of Microsoft, that inscrutable tribe from the Great Northwest. The activities we'll consider here are Microsoft's investments in Progressive Networks and Vxtreme, and its announcement last week with Marimba of a proposed technical standard for upgrading software over the Internet. I'll attempt to give my interpretation of just what the heck is going on here. If the Department of Justice is reading, feel free to take notes.

Progressive Networks is the leader in streaming audio, or continuous sound, over the Internet. Shockwave is nice, but RealAudio is king. And lately, Progressive has been moving into streaming video, too. Video is important to Microsoft, with its investments in cable TV companies, cable TV channels, movie studios and, of course, WebTV. Microsoft thinks it is going to control your TV and mine by early in the next decade, so controlling video standards is very important to them.

As the market segment leader, Progressive Networks was a threat to Microsoft dominance. Microsoft could have squashed Progressive like a bug by competing head-to-head as it does with Netscape. But too much bug-squashing riles the Feds, so Microsoft tries to squash only big bugs that are really annoying. It was much better to co-opt Progressive by making an investment. This is a common technique among Mafia families: do favors for the rival and put him under an obligation. Mario Puzo could explain it better.

Microsoft made Progressive an offer it couldn't refuse -- more than $30 million dollars for a non-voting 10 percent interest in the company. This shows the world not only that Progressive is the king of streaming data, but that it is worth big bucks despite no profits to speak of. Microsoft didn't even ask for a seat on the Progressive board.

Take a moment to consider Microsoft as a bank. The company has $10 billion in cash and brings in another $1 billion or so in profits every quarter. What do you do with that kind of money? This, believe it or not, is a problem. Put it in the stock market -- even in a red-hot market like we've had in 1997 -- and the return is maybe 20 percent. But Microsoft's internal rate of return is at least 40 percent annually, meaning that even investing in the hottest market in history HURTS MICROSOFT EARNINGS. They are better to roll the money back into the company where it earns a greater rate of return. Except that Microsoft can no longer think of how to spend all that money. They just can't do it. So one thing they can do with the money is look for companies in which to invest that have even higher growth than Microsoft. Enter Progressive Networks, which is growing at a rate of 20 percent per month.

The value system at Microsoft, however, does not allow just a simple investment. Not only does each investment have to make some strategic sense, it also has to be tactical. Microsoft needs to feel that the investment not only furthers some long-term goal, but it also solves some local problem at the same time. In the case of Progressive, Microsoft wanted to control the streaming video standard, and the best way to do that was to get Progressive to adopt Microsoft's streaming video technology. Except Microsoft didn't really own a streaming video technology. Enter Vxtreme, which had a very nice streaming video technology.

Negotiating in parallel with Progressive and Vxtreme, Microsoft made it look to Vxtreme like it was going to buy Progressive. That kept the price of Vxtreme down to only a slightly obscene $70-odd million. And since Progressive knew about Vxtreme, it had to worry that Microsoft was going to take that technology and compete head-to-head. Trying to avoid this possibility is what led Progressive to drop its own video streaming work in favor of Vxtreme's as part of the Microsoft deal.

Is any of this a violation of antitrust laws? I'm no lawyer, but it looks to me just like smart and aggressive business. The Department of Justice is examining the two deals, though, so they may have a different opinion, but I'll bet not.

Then there is this week's announcement with Marimba. This is VERY interesting, because it gives an insight not only to how Microsoft does business, but also shows where Microsoft's entire business model is headed.

Microsoft and Marimba announced that they had co-developed a new formatting scheme that allows software to be automatically updated over the Internet. Called the Open Software Description (OSD), this proposed standard has been submitted for consideration by the World Wide Web Consortium.

Did Microsoft really need Marimba's help to invent OSD? No. Microsoft has the brains and bandwidth to invent OSD all by itself. Moreover, Microsoft has the market clout to make OSD the de facto standard whether or not Marimba helped out. Marimba's current technology doesn't even extend to distributing most of the data types used in Microsoft products, so this is not at all a matter of Microsoft using Marimba's Castanet to distribute software updates.

Marimba's presence was required to make it clear that OSD is intended to support Internet "push" technologies (Marimba is the leading push vendor), and to show the US Federal Trade Commission and the US Department of Justice that Microsoft is a team player rather than a monopoly. Don't be surprised, either, if Microsoft makes an investment in Marimba in much the same way it invested in Progressive.

What will OSD mean for you and me? It will both change the way we buy and maintain software, and take away forever any sense of residual innocence we have. OSD will allow Microsoft, or any vendor of OSD-compatible software, to send out over the Internet an upgrade and load it into your computer, without you even knowing it has happened. The good news is you'll always have the latest version and bugs should be fixed almost instantly. With this new capability there's no reason for vendors to delay product launches to get every last bug worked out. They also won't have to make each new version as significantly different as is required today, so there can be lots of thoughtful revisions over time.

The bad news is we'll no longer own our software. The truth is we haven't really owned our software for a long time, maybe ever. The license agreements we never read just give us the right to USE the software, and then only on one or two computers. OSD changes that right of usage from something that's bought to something that's rented. Microsoft wants to make its income more deterministic, more predictable, so they want to move to a renting or leasing model. OSD allows them to do that, but at the risk of allowing vendors to mess with innards of our computers.

OSD kills software retailers because Microsoft and the others will rent directly over the Net. Killing retailers will allow the publisher to take some of that profit margin to support higher earnings while simultaneously lowering end-user prices to encourage market growth. Everybody wins but Egghead, CompUSA and their traditional competitors. I guess those outfits didn't keep up with the lingo.