There's a media frenzy! The U.S. Department of Justice says Microsoft is violating a 1995 consent decree and is trying to kill competition!! The Feds threaten Microsoft with a $1 million-per-day fine!!! Film at 11!!!!

Boring.

Of course Microsoft is violating the 1995 consent decree. Of course they are anti-competitive. Like any hyperactive child or good lawyer, Bill Gates skates along the edges of what is proper. Half the time he is on one side of the line, and half the time he is on the other. Microsoft EXPECTS to be called on this kind of behavior and counts itself lucky for the many times it has not been caught.

The fact that they are guilty is clear, at least to me. I saw it two weeks ago when I interviewed Gates, Steve Ballmer (Gates's second in command) and Jim Allchin, head of Microsoft's Windows NT juggernaut. Each man explained the positioning of Microsoft Internet Explorer in exactly the same terms, chanting a carefully learned mantra of political correctness. Internet Explorer isn't a product, they all said, and was never intended to be a product. It is a logical extension of Windows and simply distributed in another fashion. Microsoft might ship a bug fix or a new OS feature by releasing it first on the Net, they all went on to say, so what's surprising about choosing that technique for distributing the browser? It's an inexpensive method and has the great advantage of reaching precisely the customers -- Internet users -- who are in the position to use the upgrade. What could be simpler? I can just imagine the brainstorming session that yielded this load of blarney. And good blarney it is. It's an argument that almost works.

But then there is Microsoft Internet Explorer for Macintosh. If Internet Explorer isn't a product but an extension of Windows, exactly what part of Windows is extended by Internet Explorer for Macintosh?

Well, er, Internet Explorer for Macintosh isn't a part of Windows, Microsoft explains. It's a separate product.

But it has the same features as the Windows version, the same menus, the same command structure, the same user interface, THE SAME CODE BASE. Microsoft is proud of all this, yet one chunk of code is a product and one isn't.

But wait, if Internet Explorer for Macintosh is a product, and if it is given away for free, isn't that unfair competition with Netscape's Macintosh browser? Here's where Microsoft gets a little flustered and starts mumbling about how Internet Explorer for Macintosh might be an extension to Microsoft Office for Macintosh in the same way that Internet Explorer is an extension to Windows 95 and Windows NT.

So we've got almost identical products derived from the same base of code and one is a product while the other isn't. Or maybe one is an operating system while the other is an application. But wait again! Hasn't Microsoft maintained for years that in Redmond an application is an application and an operating system is an operating system and never the twain shall meet, except perhaps inadvertently in the cafeteria over a double decaf latte?

So much for the old Chinese wall. The truth is that what we are talking about here is just marketspeak. It's product positioning and not the result of any technical development effort. Microsoft is skirting the line and trying to talk Dad out of a licking. And it will work.

Microsoft learned from 10 years of working with IBM that all it takes to avoid a $1 million-per-day fine is a $1 million-per-month legal bill. A few years down the road, after Microsoft has pushed through another $50 or $100 billion in sales, there will be another consent decree and this behavior, too, shall stop. For awhile.

This is boring . . . and discouraging. It reveals a far deeper malaise in Microsoft and the software industry in general than most people even realize. It's the beginning of the end for Microsoft.

Here's the deal. To be successful, a company must sell products that provide a valued service. For each successful product or service a company will probably shelve nine mistakes. To win in the long run, you have to take risks and cut your losses when something doesn't work. Bill Gates has excelled in both, hence Microsoft's great success. But where are Microsoft's new products? I don't see them.

With no new products, Microsoft can make enormous products for years to come. But to flourish, Microsoft must continue to grow, to introduce new products and services. Microsoft needs the computer industry to continue to change. Change is the whole foundation of the computer industry. But Microsoft, while giving lip-service to change, is no longer really interested in it. Microsoft is interested, instead, in its stock price. And Microsoft is interested in killing competitors. These are both bad trends.

Microsoft is now the bluest of blue chips and that new identity is turning the company into something more like the old IBM every day. The old IBM thought only of competition and market share and pounding the competition. OS/2, for example, wasn't invented to solve customer problems. It was invented to kill MS-DOS and bring IBM back into full control of the desktop standard. And that is exactly why OS/2 failed, because for at least the first $2 billion of its development, OS/2 had nothing at all to do with customers.

Now we see much the same thing with Internet Explorer and, in fact, with Windows itself. We see this phenomenon in Java, too, and not only from Microsoft's side. Sun Microsystems has been focused on using Java to compete with Microsoft more than using Java to help people use their computers. The entire Java license agreement, for example, was written with Microsoft in mind.

It's time for a return to old values, to making products that do neat stuff, that changes people's lives. The last time that happened it was Tim Berners-Lee inventing the World Wide Web, which had nothing to do with making money. It had nothing to do with Microsoft or Sun or IBM or Apple or any other company, either. It had to do only with one man's need to do something insanely great.