O.T.
Seattle practically sleepless over Microsoft uncertainty
BY KRISTI HEIM
Mercury News
Posted at 9:59 p.m. PDT Wednesday, May 10, 2000
SEATTLE -- People in this town are feeling increasingly anxious and irritated, but this time it's not from the coffee.
The government's antitrust case against Microsoft is taking its toll. The area is already seeing some fallout in the real estate market, as employees and other stockholders hit by a 45 percent plunge in the stock price from last year's high ease off on such big purchases. And with the company and the government locked into opposing positions and no obvious end to the case in sight, some residents also say they're jittery about what it all means for Seattle's future.
``It's like their breath is still being held,'' said Tom Linde, an executive at high-tech staffing firm Aquent in downtown Seattle. For the employment market, the effect of lingering uncertainty is significant, he added. ``Seattle as a top destination will probably slide down the list a bit if the waiting continues.''
Linde, whose company used to supply temporary workers to Microsoft, said at least some of the blame goes to the company.
``There's a feeling that if Microsoft was willing to take its medicine and move forward, this might have been resolved,'' Linde said. ``That's not a likely scenario at this point, if the company is planning to stay the course of denial.''
Even some supporters of Microsoft questioned whether the company's hard-line stance was the right choice. Sitting on a ferry to Seattle from nearby Bainbridge Island, Linda Brower and Cindy Parsons looked out the window and contemplated the fate of the hometown favorite.
In Bill Gates they trust
Brower, a retired teacher and long-time Microsoft stockholder who lives just a mile from the company's Redmond campus, said she was ``sad that it's come to this point.''
``Personally, I think if they hadn't been so confident of their position and a little more humble, it could have been over a few years ago and returned to business as usual.''
Parsons said local people ``still have a lot of trust in Bill Gates,'' but she adds, ``I sometimes wonder if he got the best advice.''
Microsoft's director of community affairs, Bruce M. Brooks, says he has trouble reconciling the government's portrayal of Microsoft as a predatory monopolist with the company he knows contributes so much to the public. Microsoft and its employees donated over $100 million last year to organizations in Seattle and elsewhere.
In fact, many people in Puget Sound, where about 40 percent of Microsoft stock is held, are irritated by what they see as unfair government interference.
`It's going to hurt us'
``Microsoft has contributed so much to this economy, whatever hurts them is going to hurt us,'' said Peter Ku, chancellor of the Seattle Community College system. ``As a citizen, I think people are all nervous.''
Ku pointed to the drop in Microsoft's stock price. ``That's devastating. I know people are not happy with it. We felt that the government really went out of their way to destroy Microsoft.''
But the time may have come for compromise, Ku added.
``From Microsoft's point of view, they might want to hold on until the election. We the citizens are saying, my God, we want to get it over with. If they can compromise that would be the best,'' he said. ``Dragging it out doesn't help anyone.''
Bob Watt, president and chief executive officer of Greater Seattle Chamber of Commerce, disagrees, saying the outcome of the Microsoft case will set an important precedent for other companies. Microsoft is one of the chamber's 2,800 members.
``I don't think you should ever compromise to get something over with,'' he said. ``I'd rather have it established that a company can innovate as it sees fit, rather than the government intervening in product decisions. Competitors better be careful what they wish for, because they might be next.''
Regardless of the outcome, the region's economy is likely to remain vibrant, predicts Bill Beyers, a geography professor at the University of Washington who researches regional economies. Besides Microsoft, thousands of other computer services firms are operating in the Seattle area, along with a diverse range of other industries, such as aerospace, international trade, manufacturing, biotechnology and Internet-related businesses.
Cara Gonzalez, a Seattle electrician, thinks the recent proliferation of start-ups and the spread of wealth from Microsoft millionaires into new ventures will help buoy the economy.
But there are some worrisome signs.
Housing market affected
The Seattle Times reported that home sales fell 9 percent in April, the first drop in five years. And now new Seattle companies may face greater challenges getting funding, noted Scott McAdams, president of regional brokerage McAdams, Wright and Ragen.
Since the downturn in high-tech stocks, ``the IPO market has gone to zero,'' he said. ``There were a few deals in April, but it will be hard to get anything done in May.''
He estimates that at least $1 billion of capital raised in the Puget Sound area is available for investment, but venture capital firms have become much more cautious about who gets it. As for Microsoft, if its stock continues to drop, McAdams says he wouldn't be surprised if local investors saw it as a buying opportunity.
``Most people here have a pretty strong love affair with the company. They've held the stock through thick and thin,'' he said. ``Generally they're still of that mind, but this particular trough is testing their confidence.'' |
