Gates is still in charge, but I think he's happy about Ballmer taking care of his baby.

I really think that AOL is going to have to be pushed real hard to sign on to this.

If you look at what the opportunity is for Microsoft, it's that it just starts to sell one thing instead of another -- it's not an increase for them. The revenue opportunity of the release of a consumer operating system is related to how much of the installed base you can get to upgrade by taking the new product and putting it over what they used to have.

They've really done a 180 on this. The new fix that they have in Beta right now for Outlook completely removes programmability except as manually authorized in each case by the user. And this will break, frankly, a large number of corporate applications, but for the general user this is the right thing to do.

It makes storing objects locally or on the Web essentially follow the same process.

For instance, on a small business computer from Hewlett-Packard, the word 'Microsoft' may never appear on the screen.

This sounds like Adobe's pound of flesh to me.

What the federation approach does is provide the capability, through Passport, to make a single administration point for internal and external sites.

We're talking about something that's four-and-a-half years old. Although there are a lot of businesses that still have Office 97 running, getting free support so many years after, that's pressing your luck.

The question is, to what degree can Microsoft integrate what's on the operating system with the services it offers on the Web and avoid tripping over the antitrust issue? I think Microsoft is very sensitive to this.