Via Perfectly Reasonable Deviations, Paul Graham has an interesting blog post from last April (link here) arguing that Microsoft has lost the software applications war to Google and other Web 2.0 software start-ups. While this may be something of an overstatement, the heart of Graham's argument is an open source software application known as Ajax. The "x" in Ajax stands for the XMLHttpRequest object, which allows a web browser to communicate with a server in the background, rather than simply by requesting that the server send a new page. Anyone who uses Google's GMail service has seen this bit of software at work, checking for new messages, notifying the user when a new message arrives, and automatically refreshing the inbox message list to display new messages. Other Google applications using this technology include their online word processing and spreadsheet applications.

The Ajax application manages this behind the scenes communication between browser and server, enabling the kind of applications which used to run from the desktop to run in any web browser. To the extent that applications migrate from individual desktops to the web, the role of the computer operating system becomes less and less important. Given Google's lead in this technology, it's hard to see how Microsoft will keep up, particularly since it requires innovating around its main product. And, the biggest irony here is that Microsoft invented the XMLHttpRequest object to let its Outlook email application work seamlessly with external mail servers.

(As an aside of no relevance to this post, there is a very cool graphical explanation of the Mobius transformations of the plane up on the Perfectly Reasonable Deviations blog.)

There's a depressing story in Sunday's (6/10) New York Times by Stephen Labaton (link here) about the Bush administration's defense of Microsoft against allegations Google has made in several state venues that the Vista operating system's desktop search feature slows down the opeartion of rival search software. It shouldn't come as a surprise that at the center of the story is yet another Bush administration Department of Justice attorney problem. Specifically, assistant attorney general Thomas O. Barnett of the Justice Department's Antitrust Division, wrote a memo defending Microsoft against Google's charge that Microsoft was in violation of the consent agreement it signed in 2001 to settle the antitrust case against it.

While there's nothing specifically wrong with promoting the administration's pro-business policies, Barnett's involvement is problematic:

The official, Thomas O. Barnett, an assistant attorney general, had until 2004 been a top antitrust partner at the law firm that has represented Microsoft in several antitrust disputes. At the firm, Justice Department officials said, he never worked on Microsoft matters. Still, for more than a year after arriving at the department, he removed himself from the case because of conflict of interest issues. Ethics lawyers ultimately cleared his involvement.

While this probably won't become the scandal that the politicization of DOJ hiring and firing practices has, it's an excellent illustration of the problems that high level regulatory capture entails.

Daniel Gross has an interesting MoneyBox article in Slate (link here) on how the normally merger friendly Bush DOJ Antitrust Division and the FTC have decided that letting Whole Foods merge with Wild Oats (total merger value $670 million) would seriously undermine competition in the high end retail food industry.

Of course, as Gross notes:

We're in the midst of a merger mania, and the Federal Trade Commission and the Justice Department's antitrust division the agencies tasked with assuring that mergers don't harm consumers by reducing competition have approved almost every deal. If the nation's largest hog producer buys the second-largest hog producer? OK. Telecommunications giants SBC and AT&T want to merge? No problem. Giant supermarket company Albertson's and giant supermarket company SuperValu get together? You got it.

Coming up with hard evidence that decisions like this are politically motivated is obviously difficult, but Gross makes a compelling case for it. Check it out.

From Computer World (6/3/07) link here:

In a resounding victory for Microsoft Corp., bills seeking to mandate the use of open document formats by government agencies have been defeated in five states, and only a much-watered-down version of such legislation was signed into law in a sixth state.

The proposed bills would have required state agencies to use freely available and interoperable file formats, such as the Open Document Format (ODF) for Office Applications, instead of Microsoft Corp.'s proprietary Office formats. The legislation was heavily backed by supporters of ODF such as IBM, which uses the file format in its Notes 8 software, and Sun Microsystems Inc., which sells the ODF-compliant StarOffice desktop application suite.