Aiming for the tallest poppy: Microsoft may be the business success of the decade but its dominance of the market has led to a PR backlash from some quarters. Lexie Goddard reports

’Charmless but harmless lord of the computer world’s geeks and nerds to a bully bent on world domination,’ was how the Independent described the transformation of Bill Gates’ image.

’Charmless but harmless lord of the computer world’s geeks and

nerds to a bully bent on world domination,’ was how the Independent

described the transformation of Bill Gates’ image.



This transformation was prompted by a legal battle which has pitted

Microsoft against the might of the US government over the packaging of

its internet browser with its market-leading Windows 95 software.



A petition was filed against Microsoft by the US Department of Justice

which claimed that Internet Explorer is a separate product, and objected

to the sale of the browser as part-and-parcel of Windows 95. The court

was asked to issue a simple order to prohibit Microsoft from forcing

equipment manufacturers to pre-install Internet Explorer 3 alongside

Windows 95.



The ruling was made on 22 January, after a three-month legal tussle,

that Microsoft would continue to offer computer makers Windows 95

packages incoporating the browser files, but providing the opportunity

for consumers to have greater choice of internet access.



However the legal battle goes on. Microsoft maintains that internet

browsing should be an integral part of the operating system and that the

company must reserve the right to enhance its products in order to

compete. The next major milestone is 21 April when the court will hear

the oral arguments on appeal.



This, combined with rumours at the end of last year that he was looking

at the communications market via a bid for BT - now denied by Gates -

raised fears about Microsoft’s potential monopolisation of the

market.



Reports began to appear questioning the domineering attitude of Gates,

once the darling of the computer world.



It is not just the media. ’Bill bashing’ has become something of an

international sport among both disgruntled software firms and the

general public with the emergence of over 100 anti-Microsoft web sites.

And the former boy wonder endured further embarrassment recently when

pictures of him with his glasses coated in custard pie following a

surprise attack by les Entartuers, a group led by Belgian Noel Godin who

has ’declared war on unpleasant celebrities’, appeared on front pages

all over the world.



This bout of so-called ’Microphobia’ has not yet affected the company’s

business performance. Microsoft is more successful now than ever. Gates,

America’s richest man with an estimated holdings of nearly dollars 46

billion, just got richer, netting another dollars 1.5 billion as the

company’s stocks continue to rise. But could it affect the company’s

long-term reputation?



IT public relations practitioners are divided over the answer.

’Microsoft definitely has a PR problem,’ says Greg Levendusky, managing

director of the British and American IT PR network The Weber Group, on

the accusations of anti-competitive behaviour.



’They have struck a nerve in the technology industry which is defined by

progress and innovation. It also has an image problem with journalists

who perceive the company as arrogant and needs to take steps to soften

its image by becoming a more caring, sharing kind of company,’ he

says.



Levendusky acknowledges that Microsoft has made efforts to be a good

corporate citizen, citing the example of a donation of nearly dollars 45

million in 1996 to universities and the establishment of a new research

centre at Cambridge, but believes more can be done to show its friendly

face.



Others believe it has gone beyond a public relations issue. ’It does not

matter when even the most powerful media start a hate campaign,’ says

Jonathan Simnett, people development director of the hi-tech consultancy

Brodeur A Plus. ’Gates has got the corporate world where he wants

it.



They (Microsoft) are so powerful even the most senior journalists cannot

make a penny’s worth of difference to their business - they are the

corporate standard.



’You can hate Gates all you want but there is no real alternative to

Microsoft,’ he adds. ’The IT business moves so fast that public opinion

can be left lagging behind. It won’t matter a hoot.’



Only three things, Simnett believes, can upset Microsoft’s progress: if

it saturates the market; fails to spot a new paradigm in the market (as

it nearly did with the web); or ’meets a federal regulator with

teeth’.



Gail Hall, Northern Europe PR manager for computer chip maker Intel,

thinks any current negativity towards Gates and his empire is purely a

result of jealousy and the British public’s sometimes resentful attitude

towards success. ’Everyone loves to hate a billionaire,’ she

explains.



’There is a cultural difference. In the US Microsoft is able to project

its success but here people resent it. Microsoft has a good PR

operation.



They get a high level of coverage and are successful at getting on

mainstream television.’ However she adds: ’Perhaps they need to look at

the way they are perceived.’



Microsoft UK marketing director Shaun Orpen is aware that the company

needs to polish up its PR, which accounts for 14 per cent of its

marketing budget, and especially its response to Government issues.



For example, when asked about the complaint against Microsoft’s

competitive practices filed by US attorney general Janet Reno, company

executive vice-president Steve Ballmer is reported to have said ’to heck

with Janet Reno’.



The Justice Department, he added, was ’ill informed’. This led to

further cries of arrogance.



Orpen acknowledges the accusation. ’We are very passionate and sometimes

that passion is misconstrued as arrogance and we come over in the wrong

way,’ he says sheepishly. ’It is not a brand value we want to aspire

to.’



Orpen partly blames the bad press over the anti-trust (anti-competitive)

case on Microsoft’s failure to adequately communicate its viewpoint

which he insists is about customer choice and the right to compete and

says he was surprised by the amount of coverage the anti-trust case

received, especially in the non-IT media.



To pacify investors and employees, Gates sent out a letter explaining

Microsoft’s standpoint. ’My goal has always been to create software that

improves the quality of people’s lives,’ it reads, ’so it’s

disappointing for me to see the government now trying to put controls on

an American success story.’



Microsoft’s communications strategy now will be to argue its case of

free competition as well as focusing on the wider issues such as the

user-friendliness of its products. Orpen also admits that in the future

the company needs to forge better relations with the media rather than

letting a story ’spill out randomly’. ’We need to be more open and talk

about the issues proactively with the press, not just the IT press but

City commentators,’ he says.



Orpen claims Microsoft is already making progress, having held several

’relationship-building events’ such as an informal media debate in the

UK at which company representatives and journalists discussed how IT is

perceived in Britain. But IT journalists are still sceptical. ’If they

have an agenda they bombard you with information, but if you have

something they don’t like they ignore you,’ says Network Week

editor-in-chief Maxwell Cooter.



Martin Banks, a veteran IT journalist who has written columns for PC

Plus, PC Week and The Director magazine, agrees relations could be

better.



’Prod any IT journalist with the subject of Microsoft and it would be

easy to hit a sore spot,’he states. ’The PR is pretty controlling. Text

100 (Microsoft’s UK PR agency) has the biggest client in the computer

business, you can’t run the PR in a free and easy way as you would with

a small company.’ Saying that, Banks thinks relations are better now

than in the days when IBM was top of the IT tree. ’I can e-mail the UK

managing director of Microsoft and he e-mails me back. I can get to the

top men.



In the old days with IBM we only had dealings with the press office.’



As for the charge of arrogance, Banks says he remembers when both Lotus

and IBM were accused of the same thing and were subjected to the same

kind of hate campaigns. ’People were so locked into the products,’ he

says of IBM, ’it is easy to get into the position where you can earn an

absolute fortune and think ’we are God’s gift to the computer

industry’.’



According to Banks, Microsoft’s reputation among the media is that of a

’brutally efficient marketing machine’. As one journalist put it:

’Microsoft is not a computer company, it’s a marketing company with very

good lawyers.’ This machine has succeeded in elevating Gates - once

nicknamed the ’boy God’ by Microsoft employees - and his empire to icon

status. However, warns Cooter, this does not mean it can afford to

relax: ’This is a fast moving industry, a company can be huge one decade

and slip the next.’



FORTUNE AND FAME: THE PUBLIC RESPONSE



Despite a spate of media ’Microphobia’, the investigations of the

Justice Department and carping within the IT industry, the average US

citizen still loves Microsoft. America’s Fortune magazine conducted two

polls to assess public attitudes towards the company in early January.

One consisted of 800 nationwide telephone interviews, the other selected

respondents from 80,000 households which regularly used the internet. An

impressive 73 per cent agreed with the statement ’Microsoft is one of

America’s great businesses’ and 78 per cent thought it made high quality

products. Thirty-eight per cent said they admired Gates. However,

Microsoft cannot afford to be complacent as a sizeable 41 per cent

ticked the box stating ’Microsoft is a monopoly’, 35 per cent disagreed

and 24 per cent didn’t know if that was a fair description. What is more

worrying for the software empire is that 80 per cent of patriotic

Americans believed the Justice Department ought to enforce anti-trust

laws. Half of those telephoned knew about the internet browser

anti-trust case. Thirty-eight per cent sided with Microsoft on the issue

and 28 per cent believed the Justice Department were correct to come

down on the company. The poll’s heavy on-line users who spend more than

eight hours a week on the internet, however, were less sympathetic with

51 per cent voting for the Justice Department in the browser dispute.

The figures indicate that although the general public still supports

Microsoft, it can’t afford to alienate the IT-literate.



Microsoft, which has its PR headquarters in the States, monitors its

image via opinion polls every four months but, as company chief

operating officer in the US, Bob Herbold, told Fortune magazine, it now

plans to invest more in researching this group. ’We’re concerned about

IT professionals, we’re concerned about the business decision-makers,’

said Herbold. ’We don’t do research with those groups regularly, but

we’re doing more now.’



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