Back in the Bad Old Days, Microsoft used a simple strategy to crush its rivals: Embrace, Extend, and Extinguish. They’d move into a product area, add some proprietary standards that nobody else could support, then strangle their competitors. This worked really well, for example, against Netscape during the browser wars in the 1990s.


Embrace, extend and extinguish - Wikipedia, the free encyclopedia

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"Embrace, extend and extinguish," also known as "Embrace, extend and exterminate," is a phrase that the U.S. Department of Justice found was used internally by Microsoft to describe its strategy for entering product categories involving widely used standards, extending those standards with proprietary capabilities, and then using those differences to disadvantage its competitors.


Origin

The strategy and phrase "embrace and extend" were first described outside Microsoft in a 1996 New York Times article entitled "Microsoft Trying to Dominate the Internet," in which writer John Markoff said, "Rather than merely embrace and extend the Internet, the company's critics now fear, Microsoft intends to engulf it." The phrase "embrace and extend" also appears in a facetious motivational song by Microsoft employee Dean Ballard, and in an interview of Steve Ballmer by the New York Times.
The more widely used variation, "embrace, extend and extinguish," was first introduced in the United States v. Microsoft antitrust trial when the vice president of Intel, Steven McGeady, testified that Microsoft vice president Paul Maritz used the phrase in a 1995 meeting with Intel to describe Microsoft's strategy toward Netscape, Java, and the Internet. In this context, the phrase means to highlight the final phase of Microsoft's strategy as raised by McGeady, which was to drive customers away from smaller competitors.


The strategy

The strategy's three phases are:

  1. Embrace: Development of software substantially compatible with a competing product, or implementing a public standard.
  2. Extend: Addition and promotion of features not supported by the competing product or part of the standard, creating interoperability problems for customers who try to use the 'simple' standard.
  3. Extinguish: When extensions become a de facto standard because of their dominant market share, they marginalize competitors that do not or cannot support the new extensions.


The U.S. Department of Justice, Microsoft critics, and computer-industry journalists claim that the goal of the strategy is to monopolize a product category. Such a strategy differs from J. Allard's originally proposed strategy of embrace, extend then innovate both in content and phases. Microsoft claims that the original strategy is not anti-competitive, but rather an exercise of its discretion to implement features it believes customers want.
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