The Insider: Colorful Microsoft critic flames out

REVISING THE RHETORIC: After 10 years of fiery rhetoric against Microsoft Corp., the Computer & Communications Industry Association turned off the flames last week.

The organization, previously made up principally of Microsoft's adversaries, agreed to withdraw from participating in antitrust litigation against the company. But it's hard to forget all those quotable quotes made over the years by Ed Black, the association's president.

These are some of them, culled from the P-I's archives:

Nov. 8, 1999: "Microsoft is a rapacious monopoly that should be broken up and then prevented from colluding further."
April 7, 2001: Microsoft's behavior is "consistently, constantly illegal."
Nov. 1, 2001: "The Justice Department isn't settling this case, it is selling out consumers, competition, and all those who want a vibrant, innovative high-tech industry contributing strength to our economy."
March 7, 2002: Some of the states "have persuaded the Justice Department to enter into a settlement that is woefully inadequate and which on its face is so deficient as to raise serious questions as to how anyone can seriously believe it remedies the most serious and persistent of antitrust law we've seen in many decades."

Contrast all those with the latest statement from Black, on Nov. 8. He said the CCIA's settlement with Microsoft "is a pragmatic decision to reconsider our engagement in all litigation against Microsoft. It was probably diminishing returns on our continuing involvement. We don't recant anything we've said."

SEARCH-ENGINE JOUSTING: As part of the launch of the beta version of its new MSN Search engine last week, Microsoft planned to tout its 5 billion-document search index as larger than any other -- even Google, which dominates the market.

But late on the day before Microsoft planned to unveil the new search engine, as word of its plans circulated through the industry, Google announced on its home page and in a weblog post by its vice president of engineering that its index had doubled to more than 8 billion documents.

Coincidence? You be the judge. But in the end, Microsoft was forced to call the MSN Search index "one of the largest," not the largest.

FAIT ACCOMPLI: Investors in Safeco stock, bond and money market funds have received the proxy statements and ballots to vote on whether to transfer management and operation to Boston-based Pioneer Investment Management Inc.

What they may really be voting on is ratifying what's already taken place.

When Safeco Corp. sold its life insurance and investments business to an investor group including Warren Buffett's Berkshire Hathaway, the buyers made it known they weren't interested in the mutual funds portion. Symetra Financial Corp. (the new name for the life insurance business) then picked Pioneer to take over management of the funds.

Symetra has already let go the portfolio managers of the former Safeco stock and bond funds (D.A.Davidson & Co. announced last week it had hired two former Safeco fund investment advisers, Bill Whitlow and Brian Clancy).

Symetra and Pioneer are soliciting proxies to approve the transfer of funds management to Pioneer; a special shareholders meeting is scheduled for Dec. 8 in Redmond.

What happens in the event that Safeco funds investors reject Pioneer? Says the proxy statement: "The board will consider what action to take. Such action could include liquidating the Safeco fund or seeking SEC relief to permit Pioneer to serve as an investment adviser beyond the 150-day limit and continuing to solicit proxies with respect to reorganization."

DO OPPOSITES ATTRACT?: Bill Malloy, a venture capitalist with Bellevue-based Ignition who lives near Chicago, was featured in a recent story in the Chicago Tribune. But the story didn't have anything to do with telecommunications, the area of expertise for the 52-year-old investor.

It was really about love and politics.

Malloy, along with his wife, Malinda, were one of three couples featured in a story called "Love across a post-partisan divide" that examined how people of different political persuasions coexist. Bill Malloy, who voted for Sen. John Kerry, and Malinda Malloy, a supporter of President Bush, shared some of their survival tactics, dirty tricks and heated debates.

"She's almost like the perfect moderator," Bill Malloy told the Tribune. "She's more willing to discuss and consider and moderate the tone. It's a characteristic she has that I probably need more of."

No word on whether Malloy's startup companies in Seattle would agree with that assessment.

Dan Richman, Todd Bishop, Bill Virgin and John Cook contributed to this edition of the Insider, the P-I business staff's weekly compendium of quips, quotes, observations, asides, tidbits, weird facts and gossip.

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