Microsoft Fights Back

THIS WEEK, THE GOVERNMENT IS expected to finish the first phase of its antitrust case against Microsoft, and, for the first time, the software giant will have a chance to fight back with witnesses of its own. How do Bill Gates & Co. plan to parry the months of damaging testimony, e-mails and excerpts from what has become antitrust porn--the infamous Gates video? Some defenses Microsoft will likely make to key charges:

What if you couldn't choose the color of your clothes?'' Steve Jobs asks. ""And everyone had to wear beige?'' That's what buying computers was like before last week, when the self-described ""iCEO'' (the ""i'' for interim) of Apple Computer introduced more powerful versions of the top-selling machine in America, the iMac--in five lollipopping hues. For $1,199, he said, you can pick from blueberry, strawberry, lime, grape and tangerine. Or, he suggested, collect all five.

It was the company cofounder's final flourish in a bravura 90-minute performance at San Francisco's annual Macworld fest, where he also introduced a new line of powerful minitower G3 machines, styled with the same eye-opening panache as the iMacs and featuring a very cool door that opens to allow access to its innards. He also reported progress on Apple's attempt to win back the computer-gamesters, with an endorsement from the author of the ultimate click-and-kill program, Quake II. He showed Apple's new Web server software. And he shared the stage with a Microsoft rep who demo'ed a new Mac version of the Explorer browser--with features not yet implemented in the Windows version (notably, a way to cleanly print out Web pages).

But maybe Jobs's best news was a lack of color (red) in Apple's bottom line: a fifth consecutive profitable quarter. Not bad for a company once considered . . . interim.