[IWAR] TECH Microsoft astroturf

From: 7Pillars Partners (partnersat_private)
Date: Thu May 07 1998 - 10:05:45 PDT

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    We're moving from the arrogant to the comical...  --MW
    Nothing must stop Windows 98! 
     - - - - - -
     BY SCOTT ROSENBERG | Wednesday's Wall Street
     Journal reports that Bill Gates met Tuesday night
     with the Justice Department's chief antitrust
     lawyer, Joel Klein, to "make a personal and direct
     presentation of what would be at stake in any new
     antitrust lawsuit." 
     And just what is at stake? The very future of
     civilization! -- according to Microsoft execs and
     other computer industry leaders gathered in
     Manhattan Tuesday. 
     The company called the event a "rally" in support
     of its position -- but there were no milling crowds
     of fervent Windows fans chanting, "Hell, no, we
     won't wait! Don't delay Windows 98!" Instead,
     Gates and allies took to the mikes at an
     orchestrated PR event to present a series of
     warnings of escalating direness. 
     Microsoft's chief financial officer had already
     cautioned, in a letter last week, that any move by
     the Justice Department or state attorneys general
     to block the June release of Windows 98 would
     have "broad, negative consequences not just for
     Microsoft but also for the entire PC industry."
     Windows 98 is scheduled to be distributed to
     computer manufacturers on May 15, making that
     date a de facto deadline for government action. 
     At yesterday's "rally," Gates widened the scope of
     the warning about a Windows 98 delay: "The
     effect would be profound and would ripple
     through the economy." Compaq CEO Eckhard
     Pfeiffer went further: "An injunction delaying
     Windows 98 would clearly have a negative impact
     on the country as a whole ... I think there would
     be a major national disappointment." A Harvard
     economist named N. Gregory Mankiw took the
     prophecy to its logical extreme, suggesting that any
     Windows 98 postponement "would throw sand
     into the gears of human progress." 
     These ballooning hyperboles have left industry
     analysts bemused, since Microsoft has spent so
     much of its recent marketing energy in an effort to
     reduce expectations for Windows 98. The new
     operating system has been positioned not as a
     great crank of the gears of human progress but as
     a mildly useful "tune-up" -- a middling service
     upgrade and bug fix rather than a radical
     improvement like Windows 95. The trade press
     reports that few software publishers have timed
     new product releases to coincide with the
     Windows 98 rollout. And Windows 98 is aimed
     exclusively at home users; businesses are
     encouraged to embrace Windows NT instead. 
     Astute readers will remember that the product
     now known as Windows 98 was originally
     scheduled for a 1997 release. Microsoft, like many
     software companies, is notorious for missing its
     own deadlines. In the San Jose Mercury News,
     the general counsel for Microsoft competitor Sun
     asked, "Where are the gross macro-economic
     effects of Microsoft's own failure to ship its
     products on time? Does it only become a problem
     when the government affects that?"
    Microsoft has always been adept at managing
     users' expectations of new products -- but now,
     for legal reasons, it has chosen to build up the
     formerly modest Windows 98 into an
     economy-salvaging, civilization-rescuing miracle
     machine that we must not delay. The tactic is
     likely to backfire once the public gets its hands on
     the doubtless useful but hardly
     paradigm-shattering product. 
     But Microsoft's "rally" has caught the company in
     a much larger paradox, a corporate Catch-22 that
     recent coverage of the controversy has
     occasionally touched upon, in stray quotes, but
     never fully laid out. The more loudly the company
     protests that Windows 98 is essential to the U.S.
     economy, human progress and world peace, the
     more ammunition it hands its opponents. 
     Last month, Gates insisted to the U.S. Senate that
     his company is perennially vulnerable to new
     competitors snapping at its heels; this month he's
     holding the national well-being for ransom by
     insisting that any government interference with a
     single product release will unleash doom upon us
     all. Out of one side of its mouth, Microsoft tells us
     it's no monopoly; out of the other, it insists that
     it's the sole engine driving our economy. Well,
     Bill, which is it? You can't have it both ways. 
     I don't doubt that a delay of Windows 98 would
     create some disruption in the computer
     marketplace, but any company with its ears to the
     ground or eyes on the headlines has had plenty of
     opportunities to hedge its bets. A CompUSA exec
     told the rally it had already printed 26 million
     newspaper inserts featuring the new product; if
     he'd been reading the papers himself he might
     have put that print order on hold. 
     Will financial markets really tumble if there's an
     antitrust move against Microsoft? No one knows,
     but this week the company's own statements
     made such an outcome more likely. Is the
     computer industry really quaking in its boots at the
     prospect that Justice might block Windows 98?
     The very nature of Microsoft's power makes it
     impossible to find an uncompromised answer. 
     Republican Sen. Orrin Hatch (who has his own ax
     to grind, since his state, Utah, is home to some of
     Microsoft's competitors) suggested that the
     "friends" Microsoft gathered on the New York
     podium weren't all there by choice -- but were
     afraid of retribution from Gates if they didn't show
     their solidarity. Whether he's right or wrong, it's
     significant that Microsoft can now no longer even
     present its case without creating the suspicion of
     corporate thuggery. 
     Microsoft, it seems, has become such a behemoth
     that it can no longer say or do anything without
     contradicting itself, stepping on its own toes or
     cutting itself off at the ankles. Consider the
     analogy Gates raised in New York, when he
     suggested that an antitrust-mandated Windows 98
     delay would be "like telling General Motors they
     cannot come out with new cars this fall." 
     Gates no doubt meant to associate his company's
     product with the automobile, an icon of everyday
     usefulness that the general public can relate to
     more readily than an intellectual abstraction like a
     computer operating system. But instead, any
     listener with a sense of history instantly flashed on
     the infamous motto, "What's good for General
     Motors is good for the country" (actually a
     popular misquotation of the somewhat less
     obnoxious statement GM chairman Charles
     Wilson made at his 1952 Senate confirmation
     hearings for the post of secretary of defense: "For
     years I thought what was good for our country
     was good for General Motors, and vice versa"). 
     That is not the kind of arrogant association an
     executive in Gates' present situation wants to
     invoke. Then again, even at the height of its
     identification with the U.S. economy, General
     Motors never had Microsoft's 90 percent share of
     its market. 
     An exchange Tuesday on the Senate floor
     between Hatch and Microsoft supporter Slade
     Gorton, R-Wash., turned into a Rolling Stones
     trivia duel. Hatch -- playing off Microsoft's use of
     the Rolling Stones tune "Start Me Up" to market
     Windows 95, and referring to his charges of
     Microsoft bullying -- suggested that Windows 98's
     theme song should be "Under My Thumb."
     Gorton responded that Microsoft could instead use
     "Satisfaction," since "Microsoft has been satisfying
     their customers for 20 years." 
     Senator Gorton needs to brush up on his Jagger.
     You don't need to be a Stones expert to know that
     the refrain of the 1965 song is "I can't get no
      SALON | May 7, 1998

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