Microsoft Getting Warm and Fuzzy?

• Email
• Share
• Print

Ever since Bill Gates' infamous, whiny, and grammatically challenged 1976 "Open Letter to Hobbyists," Microsoft (Nasdaq: MSFT) has had a reputation for doing what it takes to step on, or over, any obstacles, whether those were consumers or competition. Over the years, this has led to a litany of litigation on a dizzying array of charges, with recent cases involving class-action concerns in Minnesota, and the well-reported, $613 million European Union penalty, which hinged on anti-competitive behavior, or the European suspicion of it.

Could the sheer volume of court time be prompting a change of heart? It's certainly starting to look like the Redmond bad boy has gone soft recently. The day after April Fool's Day, Microsoft announced a $1.6 billion payout to Sun Microsystems (Nasdaq: SUNW) to settle claims over Java and established a groundwork for future cooperation.

So, what's the deal with the latest payout? Yesterday's was worth $440 million, and it's all about the future, or copy-protecting downloadable content. It settles InterTrust's three-year-old patent-infringement suit against Microsoft that alleged broad violations of its technology from several Microsoft products.

The most obvious application of such technology is DRM, or digital rights management. Even if you've been living under a rock, keeping the outside world at bay with a pair of sound-canceling headphones, you should be aware that Microsoft is scrambling to stake a claim to the online music turf. Efforts include a partnership with Loudeye (Nasdaq: LOUD) and other projects to try to control unauthorized duplication of downloaded media files.

Overall, these look like smart moves for Microsoft. Sure, they're expensive, but laying the foundation for the future of media commerce isn't going to be cheap, and the firm will be in a much better position to profit if it's not always on the defensive.

Talk all things MS on the Fool's Microsoft discussion board.

Fool contributor Seth Jayson has defended Microsoft on the Fool pages several times, but he still swears at Windows XP several times a day. He has no stake in any firm mentioned above. View his Fool profile here.