Gates Gets Justice Dept. Ear
Bill Gates did some late night lobbying.
The chairman of Microsoft Corp. met Tuesday night with the Justice Department's chief antitrust lawyer to try to dissuade him from a broad antitrust lawsuit against Microsoft, a government spokeswoman said. The two-hour meeting in Washington came at Gates' request.
"It was basically a presentation of his views about the investigation, an opportunity for him to express his views," said Gina Talamona, a spokeswoman for the antitrust division of the Justice Department. "We listened. Our investigation is continuing. There's been no decision (on an antitrust lawsuit) made yet."
Gates met with Joel Klein, arguing that the government's concerns about Microsoft's business practices are misplaced.
The meeting, first reported in Wednesday's editions of The Seattle Post-Intelligencer and The Wall Street Journal, apparently was a last-minute decision initiated by Gates.
Earlier Tuesday, Microsoft brought its public relations campaign to New York City in a fight against potential court-ordered delays to the launch of Windows 98 next month.
Backed by a row of executives from computer makers and retailers, Gates laid out the case for Microsoft's plans to incorporate Internet technology in its latest Windows update.
"By now, I hope, it's clear why we are fighting: to protect the principles of innovation," Gates said. "Forcing us to divorce the Internet from the operating system would be like requiring one of the automakers to sell cars without car stereos."
Gates has been traversing the U.S., repeating that message at technology conferences along the way. Tuesday's event was a midtown rally. Compaq CEO Eckhard Pfeiffer was one of the executives to join Gates.
Top officials from Dell Computer also attended. Microsoft is claiming that the entire PC industry will suffer if Windows 98 doesn't hit the market on schedule.
"Everyone recognizes the Internet as a fundamental part of how business will be done, which is why every other manufacturer of operating systems, including IBM, Sun and Apple have incorporated Internet features," Gates said. "Before Netscape was founded, Microsoft realized that integrating Internet technology into the operating system was important to customers and essential to our ability to remain competitive."
"This is a media event, but in the longer term, this a major push to prevent the government from stifling innovation," said analyst Walter Winnitski at PaineWebber. "In the short-term, of course, they don't want an injunction to delay Windows 98."
Oracle Corp. (ORCL) CEO Larry Ellison, a vocal Microsoft critic whose company competes directly with the Redmond, Wash.-based juggernaut, wasn't impressed. He said he's more concerned with Microsoft's actions in the marketplace than with the question of getting access to the company's latest operating system.
"The most conspicuou example is how they're dealing with Netscape," Ellison said in an interview with CNBC. "They are basically giving away their products for nothing in an attempt to drive Netscape out of business...
Microsoft expects Windows 98 to hit the shelves next month. However, that plan could be derailed by the Justice Department's complaint that Microsoft has engaged in anti-competitive behavior by bundling its browser with the operating system. Gates claims such a delay would hurt the entire tech industry.
Mary McCaffrey, a software analyst with BT Alex. Brown, said that the broader tech industry would probably survive a delay in the near time, but that it's pretty important that Windows 98 arrive by Christmas. She noted the company created a tremendous buzz before the launch of Windows 95, but tactic isn't being repeated this time.
"On one hand, Gates was saying Windows 98 in of itself is not that big deal to the industry and now he's say (a delay) would devastating," said McCaffrey said.
On Monday, Gates told cable executives in Atlanta that "in the long run, these government issues are not going to hold back the cable industry or the PC industry. We have to get on about our business to show regulators that they don't need to hold us back," he said.