September 30, 2003

Lindows.com responds to Microsoft's takedown notice of MSfreePC.com

SAN DIEGO September 30, 2003-- Lindows.com Inc. responds to Microsoft's takedown notice of MSfreePC.com issued on September 26, 2003.

Mr. Bill Gates
Chairman
Microsoft Corporation
One Microsoft Way
Redmond, WA 98052-6399
USA

Dear Mr. Gates,

I received your letter concerning MSfreePC.com and I am disappointed that you cannot see how MSfreePC honors both the spirit and the letter of the anti-trust settlement agreement. Consumers should benefit as a result of Microsoft's poor behavior and MSfreePC uses modern technology to make that happen rather than forcing customers to send in paper forms via snail mail multiple times.

I am surprised at some of your objections, specifically your protests that digital signatures are not valid. You seem to have no objections when digital signatures are used to attempt to build Microsoft's profits such as with MSN, Expedia, or .Net. Perhaps it would be more palatable if everyone using MSfreePC also got a Passport account? I would also point out that Microsoft uses digital signatures to bind people to their restrictive end-user licensing agreements. It is hypocritical for Microsoft to endorse digital transactions to bolster your business, but resist them whenever it may negatively impact your bottomline.

It's also shameful that such a wealthy company uses public schools as a smokescreen to hide your true motivations which is to reduce the payout Microsoft has to perform. As you are aware, Microsoft benefits greatly if consumers do not submit claims or drop-out anywhere in the laborious process. One-third of all unclaimed dollars are refunded back to Microsoft. One-third of unclaimed dollars are required by schools to be spent on software which, given Microsoft enormous market share, means most of those dollars will simply circle back to Microsoft. The remaining one-third can be spent on hardware which even then will likely come with Microsoft software further reducing the dollars Microsoft will be paying out. If you have genuine concern for California schools, then why not give 100% of unclaimed monies to schools in cash for even non-technology needs of which there are many? This would clearly demonstrate that the settlement is not designed to minimize the amount of money Microsoft must pay.

It's undeniable that Microsoft's actual settlement amount will be dramatically less than the $1.1B amount trumpeted in the headlines - the complexity of the manual settlement claim process and the above favorable terms will ensure that. The $1.1B number is purely a publicity stunt and should not be used as a reference point for any part of this process. Clearly it's in Microsoft's self-interest to discourage claims and its disappointing to see a technology advocate becomes so technology adverse and resist even the slightest attempts to help consumers claim a portion of the of the extremely Microsoft-favorable settlement agreement.

The MSfreePC service gives harmed consumers immediate value and access to the solid StarOffice suite (which saves Microsoft Windows and Linux users hundreds of dollars by allowing them to replace Microsoft Office) and LindowsOS, your competition for the PC desktop. We will continue to offer the MSfreePC service and in fact those who are eligible will receive immediate notification and be the first to download the incredible new StarOffice 7.0 coming out shortly.

Our plan is to continue to offer the MSfreePC service in spite of your threats. If required, we will be a voice in the courtroom defending a consumers rights to use technology and an online process to secure their settlement claims. I believe your company refers to this as the right to innovate.

Sincerely,

Michael Robertson
Chief Executive Officer
Lindows.com Inc.

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