Microsoft is caught in a lie

Michael Dillon

unread,

Apr 10, 1998, 3:00:00 AM4/10/98

to

http://www.latimes.com/HOME/NEWS/BUSINESS/UPDATES/lat_microsoft0410.htm

Friday, April 10, 1998
Microsoft Plans Stealth Blitz to Mend Its Image

Public relations: Times finds media strategy meant to
give look of public support. Firm says it's only a proposal.
By GREG MILLER and LESLIE HELM, Times Staff Writers

Stung by the public relations fallout from
antitrust investigations of its business
practices, Microsoft Corp. has secretly been
planning a massive media campaign designed to
influence state investigators by creating the
appearance of a groundswell of public support for
the company.
The elaborate plan, outlined in confidential
documents obtained by The Times, hinges on a
number of unusual—and some say
unethical—tactics, including the planting of
articles, letters to the editor and opinion pieces to
be commissioned by Microsoft's top media
handlers but presented by local firms as
spontaneous testimonials.
The stated targets of the campaign are attorneys
general and politicians in California and 11 other
states that may be considering antitrust action
against Microsoft, which is already battling a suit
filed last year by the Department of Justice.
When asked about the campaign Thursday
afternoon, Microsoft spokesman Greg Shaw
initially said he was unaware of such a plan.
"I'm not sure what it is," said Shaw, whose
name appears throughout confidential
documents—some of them labeled as draft
copies—that are part of a large binder of materials
distributed under Microsoft's name to the
campaign's regional coordinators.
Later in the day, Shaw amended his remarks,
acknowledging the plan exists but saying it is
merely a proposal and "not something we are
moving on." He acknowledged attending a meeting
in Chicago on Monday during which the plan was
scheduled to be discussed in detail.
Shaw's characterization of the campaign was
also contradicted by knowledgeable sources who
said it was presented to regional PR firms as "a
done deal" and that the firms were expected to
come to the Chicago meeting with detailed plans
for their states.
Even if Microsoft has now decided to abort the
plan, the documents and the activities they describe
reveal a great deal about how serious the company
considers its plight and the measures it is willing to
consider to protect its dominance of the software
industry.
The entire effort is "geared to generating
leveragable tools for the company's state-based
lobbyists," positive press clippings that "state
political consultants can use to bolster the case,"
according to documents.
In fact, the Redmond, Wash.-based company has
taken the unusual step of arranging for one of its top
media agencies to recruit a dozen public relations
firms known for their strong political connections
in targeted states.
A printed list of regional coordinators includes
Jeff Eller, former director of media affairs for
President Clinton, a firm in Michigan run by the
former head of the state's Democratic Party and an
Illinois company that has played a central role in
gubernatorial campaigns.
Other states targeted are Arizona, Florida, New
York, Pennsylvania, North Carolina, Ohio, Texas,
Virginia and Wisconsin.
When told of the planned campaign, state
officials said such an effort would succeed only in
aggravating investigators.
"I've been battling this type of PR gimmickry for
a long time, and I can smell it 40 yards away," said
Michigan Atty. Gen. Frank J. Kelley. "It represents
arrogance, and it's personally demeaning to me.
[Microsoft Chairman] Bill Gates would have been
better off if he or one of his representatives had
picked up the phone and called me."
Even in the modern world of corporate spin
control, the proposed plan is unusual in its scope,
tactics and targets.
The campaign is being choreographed by
Edelman Public Relations, a giant PR firm with
close ties to Microsoft. But sources said it is
designed to appear not as a major thrust by
Microsoft or Edelman, but as an eruption of
grass-roots support.
"They're trying to plant stories about how
wonderful it is to do business with Microsoft," one
source said. "I just find it outright wrong that
Microsoft and Edelman are trying to hide their
involvement in this."
According to the documents, local PR agencies
are scheduled to begin submitting opinion pieces to
the media next week, followed in the coming
months by waves of other materials including
glowing accounts from Microsoft partners,
consumer surveys and studies designed to show the
company's impact on each region's economy.
Letters to the editor are to be solicited from
regional business leaders. Opinion pieces are to be
written by freelance writers, and perhaps a
"national economist," according to one document.
The writers would be paid with costs "billed to
Microsoft as an out-of-pocket expense."
The campaign, which could cost millions of
dollars, is designed to generate positive stories at
critical junctures in Microsoft's legal battles. One
round of stories, a document says, "will coincide
with April 21 oral arguments before U.S. Circuit
Court of Appeals on Microsoft motion to disqualify
Lawrence Lessig as special master in Microsoft
antitrust case."
Microsoft is not the only company working
behind the scenes to influence these antitrust
matters. Rivals including Netscape
Communications Corp. have cooperated
extensively with investigators, supplying
documents and technology demonstrations designed
to show that Microsoft is abusing its monopoly
position.
The various investigations center on Microsoft's
attempts to extend its monopoly in computer
operating systems to Internet-browsing software.
The Justice Department accuses Microsoft of
illegally trying to bundle the two products, while
Microsoft claims it has the right to integrate the
browser into the operating system as a new feature.
Sources close to Microsoft said the proposed
campaign is an outgrowth of the company's growing
fears that it is being outgunned in the media by
rivals and perhaps even hostile state officials.
One stated goal of the campaign is to counter
"negative, reactive coverage that is driven by state
attorneys general."
Media experts said many elements of the
campaign seem clumsy, adding to a perception that
for all of Microsoft's prowess in software, the
company has little skill with public relations.
"Companies like Microsoft are run by
engineering types who don't understand the public,"
said Ian Mitroff, director of the USC Center for
Crisis Management, who added that base attempts
to manipulate the media and shape public opinion
often fail.
"It's cynical," Mitroff said. "It assumes we're
dumb."
This wouldn't be Microsoft's first public
relations misstep. The company was forced to try to
soften its image in January after suggesting
Department of Justice lawyers were incompetent.
Microsoft also appeared to be thumbing its nose at
the court by insisting it couldn't carry out an order
to separate its browser from its Windows operating
system.
As part of a subsequent publicity tour, Gates
was unusually candid about his family life and
stressed Microsoft's contributions to schools in
interviews with Barbara Walters and other
journalists.
On Thursday, the company began placing ads in
a handful of newspapers around the country, stating
its case against regulators. "At Microsoft," the ads
read, "the freedom to innovate for our customers is
more than a goal, it is a principle worth standing up
for."
The proposed multi-state campaign represents
another component of this broad media blitz.
The campaign appears to have been crafted by
Rory Davenport, Edelman's director of "grass-roots
and political programs" in Washington. Davenport
is listed as an author of confidential documents, but
in a brief telephone interview Thursday, he would
say only that "there is no agreement for a campaign
like that."
Another Edelman official whose name appears
on the memos, Neal Flieger, also responded to
questions about the campaign by saying, "I'm not
prepared to amplify on that at all."
The Chicago meeting, attended by many, if not
all, of the regional coordinators, focused on the
campaign. An agenda for the meeting indicates that
Shaw and Flieger were to be key speakers and
refers to the "Microsoft multi-state plan."
Both men acknowledged they were in Chicago
on Monday, although Flieger said it was merely to
visit family. Other participants said the meeting
went forward as scheduled, and that regional
coordinators flew in from around the country to
attend.
Shaw said elements of the plan may ultimately
be pursued, but the company has no intention of
targeting attorneys general or states.
A number of state investigators, who are
reportedly considering filing within a month a suit
against Microsoft for anti-competitive practices,
said they are prepared anyway.
"When it comes to knowledge of computer
technology, I take my hat off to Mr. Gates," said
one attorney general. "But if he wants to enter the
field of political intrigue, I say welcome to my
world, Mr. Gates, I'm ready to do battle."

Reality is a point of view

unread,

Apr 11, 1998, 3:00:00 AM4/11/98

to

+---- mic...@memra.com wrote (Fri, 10 Apr 1998 08:31:51 -0700):
| http://www.latimes.com/HOME/NEWS/BUSINESS/UPDATES/lat_microsoft0410.htm
[...]

The William Randolph Hearst echoes grow stronger . . .

+----

As do the echoes of Howard Stern image advice. :)

So, is anyone really surprised?

What happens now? Mr. Gates has said that Microsoft must be
careful, because they could be supplanted in the marketplace,
quicker than an elected official loses their next election. Is
this the year of the big slide? Impact on industry press, even
those not influenced by Microsoft? They will probably be
tiptoeing around any Microsoft related issues, if just to avoid
the appearance of being 'on the payroll'.

Personally I am very curious about the morale of employees at
Microsoft, given the declining opinion of the .corp's
character.

--
Gary Johnson gjoh...@season.com
Privacy on the net is still illegal.

Stephen Edwards

unread,

Apr 13, 1998, 3:00:00 AM4/13/98

to

Reality is a point of view <gjoh...@dream.season.com> wrote:

: Personally I am very curious about the morale of employees at

: Microsoft, given the declining opinion of the .corp's
: character.

Being that there are nearly 1000 people at Microsoft who are millionaires,
it is wise to be wary of their employees.
--
Stephen S. Edwards II -- Support GNU... run UNIX... be happy.
http://www.primenet.com/~rakmount -- r a k m o u n t @primenet.remove.com
"Oh Lord, please protect the rocket house, and all who dwell within the
rocket house..." -- Homer J. Simpson