Jun 22, 2021

Axios Login

Oh, uh, hello there. This is so embarrassing. You caught me just as I was booting up.

Situational awareness: The EU announced a new investigation into Google's display-advertising practices, opening a new front in the antitrust fight.

Today's newsletter is 1,313 words, a 5-minute read.

1 big thing: Why Windows needs a reboot
Data: Statcounter Global Stats; Chart: Axios Visuals

Microsoft is unveiling a new version of Windows on Thursday, and the refresh to its desktop operating system can't come soon enough.

Why it matters: While Windows still runs on nearly three-quarters of the world's computers, the operating system has been losing ground to MacOS and Chrome OS. Meanwhile, the company has all but given up on mobile, which is the main way people around the world access the internet.

While there are many ways Microsoft could improve Windows, a key area is helping people work across multiple devices, including smartphones (even if Microsoft isn't the one making them).

  • The company has scrapped several recent efforts to simplify its OS, most recently cancelling a version called Windows 10X.
  • "Windows 11 needs to deliver on the promise of Windows 10x — a cloud first, multi-device, agile OS that can enchant the young without scaring the old," said Carolina Milanesi, an analyst with Creative Strategies.

Catch up quick:

  • Microsoft has announced a June 24 event to detail the future of Windows.
  • A test build of the operating system has already leaked, but early versions often lack the key features of the final version, so what we have seen may not reflect Microsoft's full vision.
  • Microsoft has made only modest changes to Windows since the debut of Windows 10 in 2015, which itself was designed to merge the touch-first vision of Windows 8 with Windows 7, a desktop version that had remained popular with businesses.

By the numbers: A big chunk of Microsoft's revenue is still tied to the PC.

  • The company's "more personal computing" unit, which includes Windows, Surface and Xbox, accounted for $13 billion of the company's $41.7 billion in revenue last quarter, or 31%.
  • And that doesn't include any of the billions that Microsoft makes from Office. Sold largely by subscription now, Office does run on Macs and mobile devices, but most people paying for it run it on a PC.

Between the lines: Microsoft points to a revitalization of its PC businesses amid the pandemic. However, that boost will only benefit Microsoft long-term if it can convince more of the next generation of users and organizations to go with Windows.

  • Microsoft still dominates inside large companies, but today's startups frequently use Macs or give employees a choice.
  • Many schools, especially those in the U.S., have opted for Chromebooks because of their edge in security and manageability. That's creating a new generation of consumers that equate Google, not Microsoft, with desktop computing.

The big picture: Microsoft has made great strides in creating versions of its apps that run anywhere and transforming Azure into a platform-agnostic cloud service. However, the long-term health of its business still depends on a thriving Windows ecosystem.

2. Lessons for Facebook, Google in Windows' decline

Illustration: Sarah Grillo/Axios

The government's attempt 20 years ago to split up Microsoft failed, and sanctions didn't break its hold on the desktop, but many of Windows' current challenges stem from how the company reacted to its years of fighting regulators around the world.

Why it matters: Facebook, Google, Amazon and Apple all face threats from regulators. Even if the companies win those conflicts, just fighting the battle can put them at a disadvantage.

The big picture: The direct consequences of antitrust action rarely threaten tech companies, but, as Microsoft's history shows, just defending against them can distract a company, causing it to lose its edge in product development and its radar for big waves of industry change.

Flashback: One giant bone of contention in Microsoft's battle with antitrust authorities had to do with the bundling of browsers and applications with its dominant operating system.

  • When the mobile revolution occurred, Apple and Google bundled everything they had into iOS and Android, including their own browser, apps and app stores. Microsoft, by contrast, was already chastened by the time the iPhone arrived, not to mention forced to divide its time between building products and dealing with regulators.

Yes, but: Other companies that chose to placate regulators rather than fight them were less distracted — but still not guaranteed to catch the next industry wave.

  • Chipmaker Intel was quick to settle with regulators whenever it was charged with abusing its similarly dominant position in the market for PC processors. That helped it more smoothly navigate its days of dominance. But, like Microsoft, Intel largely missed out on mobile.
3. Exclusive: Google's salvo against antitrust bills

Google says the House's new antitrust bills would hurt U.S. tech leadership, "damage the way small businesses connect with consumers, and raise serious privacy and security concerns," in a statement shared exclusively with Axios' Ashley Gold.

Driving the news: The House Judiciary Committee plans to mark up the new package of antitrust bills Wednesday. Their provisions would have wide-ranging consequences for how Google, Facebook, Apple and Amazon operate.

What they're saying:

"We are not opposed to antitrust scrutiny or updated regulations on specific issues. But American consumers and small businesses would be shocked at how these bills would break many of their favorite services.

"As many groups and companies have observed, the bills would require us to degrade our services and prevent us from offering important features used by hundreds of millions of Americans."

Mark Isakowitz, Google vice president of government affairs and public policy

A letter from 13 industry groups to lawmakers similarly urged the committee to slow its consideration of the bills.

Amazon also argued the committee was "moving unnecessarily fast" on the bills. "We believe they would have significant negative effects on the hundreds of thousands of American small- and medium-sized businesses that sell in our store, and tens of millions of consumers who buy products from Amazon," Brian Huseman, Amazon vice president of public policy, said in a statement.

4. Team Trump's Facebook ads circumvent ban

Former President Trump may be banned from Facebook, but his political operation continues using it to raise money, as Axios' Lachlan Markay reports.

Why it matters: A new round of ads purchased by a political group associated with him shows how the former president can continue tapping the world's largest social network even as Trump himself is barred from the platform.

What's happening: The sum Team Trump is spending on its new Facebook ad campaign is minor, just over $3,500 since Friday, according to the site's political ad archive.

  • The ads notably avoid any messaging in Trump's voice, instead asking for donations "to stand with President Trump" and "stop Kamala (Harris) and Joe Biden."
  • The ads ran on the page "Team Trump" and directed supporters to an online donation page benefitting a Trump-controlled fundraising group, Save America JFC.
  • The ads were first reported by Politico.

The big picture: Trump himself is banned from Facebook until early 2023 following his routine promotion of false conspiracy theories alleging the 2020 election was stolen.

  • "President Trump is suspended from Facebook, so he can't post at all. Groups affiliated with the former president are not barred from posting on Facebook, so long as they are not posting in his voice," Facebook spokesperson Andy Stone told Axios.
  • He noted that some Team Trump ads were rejected for linking to the former president's website, DonaldJTrump.com.

Between the lines: Team Trump's Facebook ad buy comes as the former president kickstarts other parts of his formidable political operation.

5. Take note

On Tap

Trading Places

  • Self-driving truck startup Plus has hired former Tesla executive Lynn Miller as general counsel. Separately, Plus confirmed in a filing that Amazon has become a major customer, with an option to buy up to 20% of the company, as Bloomberg reported.


6. After you Login

Here's a neat video of Harvard moving its 1940s-era Mark I computer.

  • Our thought bubble: Does this make it a portable computer?