ANALYSIS: Corporate Reputation - Microsoft’s PR team: dream or nightmare? - The bad press died down for a while. But Microsoft is once again being pilloried for the ’PR nightmare’ that surrounds its handling of the federal antitrus

It’s tough to feel sorry for a corporate bully like Microsoft. But given the grenades bad boy CEO Bill Gates continues to lob at his company’s own PR machine, it’s also hard not to experience a tinge of empathy for the damage-control foot soldiers behind the scenes. Especially since more often than not it’s the Microsoft PR crew - in-house and agency-side - that ends up in the media spotlight. And the bad press for the publicists started even before the damning testimony and events of the past year’s antitrust trial proceedings.

It’s tough to feel sorry for a corporate bully like Microsoft. But given the grenades bad boy CEO Bill Gates continues to lob at his company’s own PR machine, it’s also hard not to experience a tinge of empathy for the damage-control foot soldiers behind the scenes. Especially since more often than not it’s the Microsoft PR crew - in-house and agency-side - that ends up in the media spotlight. And the bad press for the publicists started even before the damning testimony and events of the past year’s antitrust trial proceedings.

It’s tough to feel sorry for a corporate bully like Microsoft. But

given the grenades bad boy CEO Bill Gates continues to lob at his

company’s own PR machine, it’s also hard not to experience a tinge of

empathy for the damage-control foot soldiers behind the scenes.

Especially since more often than not it’s the Microsoft PR crew -

in-house and agency-side - that ends up in the media spotlight. And the

bad press for the publicists started even before the damning testimony

and events of the past year’s antitrust trial proceedings.



For example, few can forget that internal Edelman memo leaked in April

1998 to a Los Angeles Times reporter that detailed plans for a

nationwide grassroots corporate image campaign. Times reporters labeled

the plan ’a stealth media blitz ... to conjure up public support.’ Five

months later, an exhaustive piece in Brill’s Content dissected

Microsoft’s media relations efforts in minute detail, portraying the

company and lead PR agency Waggener Edstrom as overbearing, manipulative

and harassing.



And now this. With the trial temporarily shelved and the surrounding

publicity finally dying down, a fresh round of bad press decrying

’Microsoft’s PR Nightmare’ has arrived on newsstands. In the The New

Yorker (August 16) Ken Auletta rehashes in detail the past year’s trial

proceedings, highlighting implied failures on the part of the company’s

PR team. Even reporters across the Atlantic have picked up the story.

Closer to home, Seattle Times reporter James Grimaldi filed a lengthy

story about a month ago, charting all the media gaffes Microsoft has

made during the trial.



Is it actually that bad?



But wait a minute. Is Microsoft really bungling its PR? Despite the

tales of woe woven by newshounds, many industry wags don’t think so.

’Microsoft has one of the most effective PR programs implemented for a

hi-tech company,’ asserts Chris Carleton, principal of Chen PR, a

Waltham, MA, hi-tech agency.



’It gets its messages to the market regularly and effectively.’ And one

marketing manager at a West Coast Net company points out, ’Considering

the amount of publicity Microsoft receives, very little of it is

negative.’



Others believe that there’s little any PR team - especially on the

agency side - can do to clean up the image of a company well known for

strong-arm tactics, whose head honcho is not exactly Mr. Personality.

’Regardless of whichever PR firm they hire, when you are following

behind an elephant with a teaspoon, there’s only so much you can do,’

quips Scott Lorenz of Plymouth, MA-based West Wind Communications.



’Microsoft is so tough with its employees, its partners and its

agencies, they do what they want to do, no matter what the PR team tells

them,’ explains Tim Johnson, GM of Golin/Harris’ San Francisco office.

’That plays well in business, but it doesn’t play well on trial.’



For their part, Microsoft’s corporate PR team and lead agency aren’t

admitting any perception of a ’PR crisis’ or even strong reactions to

the recent spate of negative articles. The party line - despite

Auletta’s contention that corporate PR pro Greg Shaw had penned a memo

much to the contrary after the first day of the trial - is that

everything’s fine.



’There have been plenty of articles written on both sides of the

issue.



And any kind of legal battle can paint a distorted picture of a company

in print,’ maintains Mark Murray, Microsoft’s lead spokesman. ’However,

all of the public opinion polls we have commissioned show that the

company’s public image has remained strong, and that counts for far more

than anything else.’ But how credible are opinion polls that are

commissioned from Redmond?



Laughing off the criticism



At Waggener Edstrom, EVP and lead Microsoft account manager Marianne

Allison says the negative publicity her team receives has become an

internal joke. ’We kind of laugh at all the stories that come out about

us, saying to Greg (Shaw), ’Oh no, Greg, you’re being a PR person

again,’’ she laughs.



As for the New Yorker piece, ’A solid story that didn’t really contain

many new revelations.’



Regardless of what Murray and Allison are saying on the record, it seems

fairly obvious a new PR strategy is indeed afoot. Just last week, for

example, Newsweek wrote a glowing cover piece on Bill Gates, emphasizing

his recent conversion to a family man, and generally depicting him

sympathetically as a misunderstood, eccentric genius. USA Today and The

Wall Street Journal came out with articles the same week talking about

donations from Gates’ new foundation. Over the past year, Gates has also

appeared on warm-fuzzy TV programs hosted by Martha Stewart and Rosie

O’Donnell.



Allison denies that playing up the human, charitable side of Gates is a

part of their grand plan, however. She says Newsweek writer Steven Levy

came up with the angle for the cover story ’on his own’ and points out

that PR for the Bill and Melinda Gates Foundation is handled by ’a

completely different entity.’



Weber PR CEO Larry Weber agrees that relying too much in any way on

Gates’ image would be a big mistake: ’They need to separate the person

and the man from the company and the brand. Every effort should be made

to leave Bill out of this,’ says Weber.



It’s more difficult for Microsoft or Wag Ed to deny the company’s

increasing activity on Capitol Hill. According to a recent Washington

Post article, Microsoft’s lobbying expenditures have increased more than

three fold in the past two years, from about dollars 1.2 million in 1996

to dollars 3.7 million in 1998. The software giant also stepped up its

political contributions last year, donating nearly dollars 1 million -

almost five times as much as it did in1996. Could it be a coincidence

that Waggener Edstrom plans to open a Washington office later this

year?



On the other hand, an argument could be made that this is all much ado

about nothing. After all, the company’s stock price is soaring, and it

still resides on Fortune’s list of ’Most Admired Companies’ and ’Top

Companies to Work For.’



But Larry Kamer of San Francisco-based issues/public affairs firm GCI

Kamer-Singer is quick to warn against complacency. ’Damage to reputation

is like a virus, and one has been introduced here,’ he says. ’Many, many

companies have endured controversies while their stock has soared. But

it would be a mistake to rely on a simple indicator like stock price as

a gauge of reputation and integrity among consumers.’



Finally, maybe PR alone won’t be enough to clean up Microsoft’s image

problem over the long haul. Weber, for one, believes that the final

solution to the punishing press will have to come from within and above.

’Gates should be shaking up the company internally to be more humble and

less arrogant. I don’t care how good you are at PR, if company behavior

is less open, it’s difficult to build a good perception.’



QUICK PULSE POLL



1. Do you think Microsoft does a good job at PR?



Yes 74.3%



No 25.7%



2. Do you think Microsoft is doing a good job at handling the anti-trust

lawsuit - from a PR standpoint?



Yes 40.0%



No 60.0%



3. How seriously do you think Microsoft should take the bad press it has

been receiving, given that its share price is sky-high and it is ranked

near the top on the 1999 Fortune Most Admired Companies list?



Very seriously 40.0%



Quite seriously 37.1%



Not seriously 22.9%



4. Do you feel that the press is unfairly critical of Microsoft?



Yes 40.0%



No 60.0%



SOURCE: PRWeek/Impulse Research.



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