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 satisfaction."