Wendy Goldman-Rolm, the US reporter who is clearly determined to make her name and her fortune by becoming the world’s leading authority on the US Federal Trade Commission and subsequent Justice Department investigation into Microsoft Corp’s trade practices, is ready to break a story saying that the Justice Department is going to investigate Microsoft’s apparently multiple attempts to buy Novell Inc – the latest of which was made only 18 months ago, she says. According to Novell vice-president and legal counsel David Bradford, Microsoft first started trying to buy out its networking arch rival as early as late 1989. At that time, discussions went as far as a few face-to-face meetings between Microsoft’s Bill Gates and Novell boss Ray Noorda and some subsequent discussions about logistics between their underlings. After a protracted wait for an answer on the deal from Microsoft, Novell was apparently told in early 1990 that Bill doesn’t want to have to roam the halls of Provo to find out what’s going on with his latest network operating systems products. Nothing more was said about the idea until July 1991 – just days after the announcement of Novell’s plans to buy Digital Research Inc – when an apparently apologetic Bill Gates called Ray Noorda to ask if they could talk about the acquisition again. Noorda reportedly told Gates at that point that he (Noorda) was worried about the view US government regulators would take on the deal (Microsoft was already under investigation by the Trade Commission at this point) and about the impact the deal would have on Novell’s increasingly close relationship with IBM.
Less than flattering
The reason that the Justice Department might regard Microsoft’s attempts to buy Novell in a less than flattering light has to do with certain sections of US anti-trust law, which bar attempted monopolisation under certain conditions. If Microsoft’s actions met those conditions, the Justice Department could use them to bolster its case against the company. Gates reportedly told Noorda that he (Gates) would handle the government and that IBM was not to be worried about. Noorda was apparently hestitant and told Gates that nothing could happen until after the Digital Research deal had been finalised. When that finally happened in November 1991, Microsoft sent a bevy of lawyers down to Provo to explain why the deal would not become a problem with the Feds and – in February 1992 – followed up the discussions with a written offer of acquisition for Novell (the details of which Novell’s Bradford did not disclose). Microsoft apparently met with Novell’s board to discuss the offer on March 19 1992 – and on March 20 1992 Microsoft announced its acquisition of Fox Software Inc, something that apparently came as a total surprise to Novell. Bradford says Novell was shocked by this news and discussions broke off completely and finally after that. Bradford suggests this history should be looked at in the context of Gates’ recent suggestions that if any firm should be investigated for monopolistic practices in the personal computer industry, it should be Novell. Bradford suggests that if Novell was so monopolistic – and Gates believes they should be investigated – then why was Gates so keen to buy this monopoly only last year?
