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Gateway breaks IE ranks
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May 27, 1998: 8:08 p.m. ET
Computer maker will bypass Win 98 desktop, offer Netscape browser
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NEW YORK (CNNfn) - Gateway Inc. said Wednesday it will be the first major computer maker to let users bypass Microsoft Corp.'s Windows 98 opening screen, promoting its own Internet access service in the process.
The company also said it will let customers who sign up for its Internet service choose either Microsoft's Internet Explorer or Netscape Communications Corp.'s Navigator as their default browser.
Gateway will make the options available beginning next week on its new Windows 98 computers.
Companies make a deal
Gateway Chairman and Chief Executive Officer Ted Waitt said the company is making the move after negotiating with Microsoft for more flexibility in customizing its computers to promote Gateway services. (113K WAV) or (113K AIFF)
A Microsoft spokesman would not comment on the details of the negotiations or whether the company would offer similar deals to other computer makers.
Users who click on Gateway's Internet icon will see a Gateway-designed screen that offers a choice of its own selection of Internet access providers, rather than those determined by Microsoft, Waitt explained on CNN's "Moneyline with Lou Dobbs." (158K WAV) or (158K AIFF)
"At that point, it's a branded experience that's customized for the customer," Waitt said.
Those who don't choose Gateway's Internet access will see the standard Windows 98 desktop, although that may change as well.
"We're looking for continued flexibility with the opening screen," said Jeff Weitzen, Gateway's president and chief operating officer.
People who sign up for Gateway's Internet service, Gateway.net, can choose Internet Explorer or Navigator as their default browser. Gateway.net currently has 100,000 subscribers.
Key antitrust issues
The opening screen and browser issues are key elements of the government's antitrust suit against the software titan.
Under current conditions, the government argues, computer makers cannot tailor their systems to highlight their own product brands or brands that compete with Microsoft.
Microsoft has argued that it wants to provide a consistent interface for all users of Windows 98, much as McDonald's offers a consistent experience in all its restaurants.
Microsoft spokesman Adam Sohn said Gateway's customization "doesn't cause problems with the Windows experience."
Control over the Windows desktop has been a contentious issue for computer makers, as well. Previously, Internet service providers paid PC companies to features their services on new computers; much of that revenue now goes to Microsoft.
Several computer makers testified in the Justice Department's antitrust investigation that they would like to offer their customers an alternative user interface, boot-up sequence or initial screens, but Microsoft had refused their requests.
However, spokesmen for Compaq Computer Corp. and Dell Computer Corp., two of the leading computer makers, said their companies have no intentions of making changes to the Windows desktop and will continue to offer Internet Explorer as the default browser.
The government also maintains Microsoft unlawfully bars PC makers from removing Internet Explorer and distributing browsers from competing companies on their systems.
Weitzen said Gateway has always offered both browsers with its computers, but users had a difficult time accessing Navigator.
"The default choice was Internet Explorer," he said. "If you wanted to use Navigator, you needed to know how to load it."
New monthly payment program
Separately, Gateway announced a new purchasing program Wednesday that allows customers to make monthly payments on new PCs.
Called YourWare, the program lets consumers select the hardware, software and Internet service they want for as little as $49.95 a month.
The company touts YourWare as a way for financially strapped individuals, such as college students, to buy a new computer without large up-front costs.
Gateway does not consider YourWare a leasing program because customers own their computers as soon as they place their orders.
Models available through the YourWare program include the G-Series desktop home computers, the Solo line of notebooks and the Destination digital media computer.
After two years of ownership, customers can trade in their computers toward the purchase of a new Gateway model. Gateway is counting on this feature of the plan to increase repeat business.
Shares of Gateway (GTW) closed Wednesday at 44-5/16, down 3/16. Microsoft (MSFT) shares finished at 86, up 2-3/8. 
-- by staff writer John Frederick Moore
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