Posted at 6:24 p.m. PST Saturday, March 13, 1999
Advice to Gates: Break up
Microsoft or quit
BY DAN GILLMOR
Mercury News Technology Columnist
Dear Mr. Gates:
It's time for you to break up Microsoft Corp. -- or resign.
You're thinking: When pigs fly. But as someone once said, ''Pigs fly in
hurricanes'' -- and you're in the middle of a Category 5 storm.
Before long you'll realize the logic -- and deep down you are a logical
man.
You'll do it for the sake of your company and shareholders, and for
the computer users whose interests you've always said you represent.
Most of all, though, you'll do it for your own peace of mind.
Once, you were the symbol of everything right about modern
America. You personified the idea that with brains and drive and
imagination even a small company could become a modern giant.
You've helped bring inexpensive computing to the masses, and helped
set off a revolution whose scope we're only beginning to grasp.
Now, as the disastrous antitrust trial in Washington moves toward a
conclusion, you are becoming the symbol of all that is wrong. The
public has come to believe, fairly or not, that Microsoft's success
derived more from its uglier traits: ruthlessness, dishonesty and worse.
That's not the legacy you hoped to leave.
Soon, barring an unexpected turn of events, Microsoft will be living
under new rules. You will find this unbearable. You will find yourself
saying, ''I have better ways to spend my time than this,'' and you will
be right.
Not for a minute do you believe that Microsoft has done anything
wrong. You will never concede even the possibility.
That's partly because you are convinced that yesterday's rules make
no sense in the emerging Information Age. It's impolitic to say it
directly, as your lawyers have undoubtedly advised, but you know in
your heart that the antitrust laws make no sense when applied to
technology.
You believe you have the legal, not to mention moral, right to put
anything you want into Windows. No law should be allowed to
constrain your product or marketing decisions -- and it doesn't matter
why you're changing the products.
Yes, a company that creates and controls a standard can make
unparalleled profits, as your unprecedented wealth shows. But power
is transitory; things change too quickly for any company to genuinely
achieve, much less maintain, a monopoly in a tech-related endeavor.
Hardball tactics are not just useful in an arena where potential
competitors are lurking around every corner. They're essential. You're
baffled that anyone could fail to understand these simple facts.
Your current problem, of course, is that you've always behaved as
you feel. You've never been able to cut the slightest slack for anyone
who thought differently, and you assembled a like-minded team at
Microsoft.
No company more completely reflects its chief executive. Your
brains, hard work and take-no-prisoners methods have become
fundamental to the Microsoft culture.
So you've stomped your competitors with a continuing, anything-goes
offensive, wondering aloud at their incompetence. You've belittled
anyone who disagreed with you as an ill-informed, non-technical fool.
You publicly sneered at the Justice Department even after it gave you
a gift in the 1995 consent decree. You willfully ignored the antitrust
laws. And why not? It worked brilliantly for years.
Your well-paid lawyers and PR people insist that Microsoft will win
the current case, even though almost every neutral observer agrees
that U.S. District Judge Thomas Penfield Jackson will almost certainly
rule against you.
The trial has been an eye-opener mostly to people who haven't done
serious business with Microsoft. When you are honest with yourself
you'll acknowledge a painful fact: The shambles in the Washington
courtroom, and in the related court of public opinion, is your
responsibility.
Again, I realize you deny the very notion that Microsoft is a
monopoly, despite all the evidence. You are utterly convinced that the
second you relax you will be toppled by a company with equally
ruthless ways. Even if that were true, it doesn't explain why you have
been so arrogant.
Even if Microsoft somehow wins this case, you have branded
yourselves as a collection of strong-arming weasels and liars. If Judge
Jackson turns out to have believed much of your testimony, he's
probably the only one in the courtroom outside of your defense team
who did.
Perhaps your PR people have explained by now how badly you have
damaged your image with the press, most of which came into the trial
with an open mind. You have no credibility left even with publications
that have covered you on bended knee.
You're still well-regarded by the public, for the most part, but that's
changing. The spectacle of your deceptions and arrogance, plus
recent disclosures about Microsoft's violations of users' privacy -- not
to mention the general bugginess of your operating system, which
people are less and less willing to take for granted -- is creating a
negative impression that will be difficult to fix in the traditional ways.
Microsoft's trial performance has also left its mark in Congress, where
members who had previously been skeptical of the government's case
are now convinced that Microsoft has become a genuine threat. The
consumer-protection people in state governments, meanwhile, are
only getting started.
Your instinct is to put your head down and bull your way through this
hurricane. It may work. But the consequences if it doesn't will be
enormous. Do you want to take the chance?
You would serve your interests best by doing something dramatic.
Breaking breaking up Microsoft is one choice.
I wonder, though, if the shareholders ultimately would benefit. The
example of John D. Rockefeller may be less instructive than some
believe, because you undoubtedly understand that Microsoft's clout
stems largely from its monopoly and would be at genuine risk if
diluted.
Yet a breakup into three or so companies, each of which owned all of
the intellectual property now held by Microsoft, would make a great
deal of sense. It would restore actual competition to the
operating-system and office-suite businesses, for one thing, and
defuse any calls for regulation.
Make no mistake: Regulation is the other choice. Even if you win this
antitrust case and effectively nullify the antitrust law with regard to
software, Congress will not allow an unregulated monopoly to stand.
It would ultimately challenge the very authority of the government, and
the lawmakers fully understand this.
You would hate running a regulated monopoly. So if this is your other
choice -- and it is, barring a dramatic structural change -- you should
do the only smart thing: quit.
Focus on your many other business interests. More important, use
your wealth and clout for the betterment of humanity, not just the
shareholders of Microsoft. You've emulated Rockefeller and
Carnegie in their worst traits; now it's time to put your name into
history for good works.
When you turn your enormous talents to this job, you will erase the
image of that sullen, deceptive, arrogant man on the trial deposition
video tapes. You will leave a proud legacy.
Dan Gillmor's column appears each Sunday, Tuesday and Friday.
Visit Dan's Web page
(www.mercurycenter.com/svtech/columns/gillmor). Or write him at
the Mercury News, 750 Ridder Park Drive, San Jose, Calif.
95190; e-mail: dgillmor@sjmercury.com; phone (408) 920-5016;
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