Microsoft Will Never Split Up
January 14, 2000
by Richard L. Brandt Upside Today
The rumors and speculation about Microsoft are flying faster than Melissa through the Internet. USA Today and the Washington Post have found sources to say that the government is proposing to split up the company as a resolution to its monopoly charges. Steve Ballmer, Microsoft's new CEO, believes the leaks were done on purpose to push Microsoft in that direction. Many outsiders believe Gates would secretly like to split up the company himself, and that Microsoft would actually be a stronger company if that were to happen. Is a breakup really a possibility in Microsoft's future?
I firmly believe it is not. Breaking up is so hard to do.
Who really knows what's happening behind the scenes? I wish I did, but I don't. I have known both Bill Gates and Steve Ballmer for about 15 years and have interviewed them both many times. I have observed their behavior over the years, and compared their claims with actual events as they unfold. Those are my qualifications. Season them all you want when deciding how much credibility to give my opinions.
Both Gates and Ballmer are very smart, very dedicated to their belief that Microsoft is doing the right thing, very sincere when they articulate their vision, and extraordinarily aggressive businessmen. They believe firmly that the government is wrong, wrong, wrong to try to rein in the company.
Based on those factors, I would make the following observations about the rumors being kicked around.
First, I have heard more than one person speculate that Gates would actually like to split up Microsoft. A lot of people in Silicon Valley believe that smaller, focused Baby Bills would actually make the company more competitive (in fact, I am among them). The logic is that Gates is smart enough to recognize the fact that smaller companies are better competitors.
Well, he may be. But he's also smart enough to make the right moves without fracturing the company, and he certainly believes that he can handle it.
Gates and Ballmer really do not want to split up Microsoft. They stated that unambiguously in Thursday's press conference. It seems like Ballmer even threw out a statement to defiantly counter the leaks about the DoJ's desire to split up the company.
He emphasized the customer benefits of integration between software and services on the Web, and pointedly noted that Microsoft is uniquely able to do that. This has got to be a dig against the DoJ's concern about integrating applications and operating systems, and possible future concerns about integrating software and Web services, the next step in the industry and in Microsoft's evolution.
It's not that Gates and Ballmer are averse to tossing out misleading statements to throw people off track or to establish a strong negotiating position. But they are too smart to make statements that they have to eat later. The most commonly cited "head fake" that competitors have accused Gates of using, for example, is when he stated over a decade ago that Microsoft and IBM were both dedicated to OS/2. The claim is that Microsoft was secretly putting its efforts into Windows while leading competitors down the wrong path.
Nice theory, but impossible to prove. And Gates did not have to reverse his statements. He had always told the industry that Microsoft would continue to work on Windows. It is perfectly reasonable to believe his stated position that Windows gradually rose in prominence as the product improved and the relationship with IBM deteriorated. It is also reasonable to believe the whole thing was a ploy. The point is that it is ambiguous, and you cannot catch anyone in a lie.
|
