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To: Daniel Schuh who wrote (22929)	3/8/1999 11:43:00 AM
From: Gerald R. Lampton	Respond to of 24154

Intel settles its suit with the FTC: Intel and FTC Attorneys Reach Proposed Antitrust Settlement interactive.wsj.com The article points out the the actual terms of the settlement will be confidential until the FTC board approves it. Lord only knows when that will be. The article points out that Intel wanted to avoid the PR gaffes that Microsoft has suffered as a result of the DOJ's case. If avoiding PR gaffes is Intel's strategic goal in this case, then I guess hats off to them for achieving it. However, I think the PR gaffes are the result of PR mistakes, not the case per se. And, I always have been of the view that PR is of secondary concern. Bad PR, like bad weather, will blow over. Businesses and their customers and shareholders will still have to live with the results of bad antitrust policy long after the PR fiasco has been forgotten. The article also points out, as you do, that the complaint against Intel is much narrower than the complaint against Microsoft, and is certanly much narrower than the DOJ's case as it was actually tried. But, what I would find disturbing were I concerned with Intel's future is the following observation: While the settlement resolves the allegations in last June's complaint, William Baer, director of the FTC's Bureau of Competition, said there "are remaining issues under investigation by the commission," adding that "the commission's staff is committed to working expeditiously to resolve those concerns." "There's a much broader case the FTC can bring and may bring in the future," said Steve Newborn, a Washington lawyer who represents some of Intel's competitors and has argued for a broader lawsuit. However contentious the trial, however bad the PR, Microsoft at least got the DOJ to put its cards on the table. My guess is that after DOJ is finished with this case with Microsoft, they won't be back for another bite at the apple for a good long time. With Intel, it looks like they're going to be back.

To: Daniel Schuh who wrote (22929)	3/9/1999 4:00:00 AM
From: Rusty Johnson	Read Replies (1) \| Respond to of 24154

Fortress Microsoft REDMOND'S SCORCHED-EARTH SPIN STRATEGY HAS TURNED INTO A PR NIGHTMARE. BY TONY SEIDEMAN salonmagazine.com "In a kind of formulaic fashion, the point guy for Microsoft, Mark Murray, comes out, and no matter what happens, he almost invariably will comment that this has been a great day for Microsoft," Young says. "It's worn so thin. One reporter got so incredulous, that -- with a certain amount of risk, because he was saying it in front of a bunch of people -- this person said, 'Mark, that's a bunch of bullshit.'" Young won't name the culprit, but in an entertaining ongoing diary of the trial, Fortune magazine's Joseph Nocera said MSNBC's Brock Meeks used just that phrase one day on the steps of the courthouse where the trial is taking place. Microsoft isn't just annoying outsiders; it's driving its own relatives crazy, too. ... Most journalists understand that a little spin is inevitable. But Microsoft has gone far beyond the usual level of promoting its own perspective. "I respect the fact that when you're part of any organization you have to have a public line and you have to stick to the public line no matter who you are," a reporter says. "What's incredibly frustrating for everybody covering this is that when these guys go on background they still bullshit you. I've had one of Microsoft's top legal people tell me a bald-faced lie -- a bald-faced legal lie. Not like something he would not have known or understood; it was flat-out bullshit. I said, 'Do you want to go off the record here?' He said, 'I wouldn't tell you anything different.' It was insane, and I was able to get another lawyer to say that this guy is full of it in print." ... One of the publications I write for as a trade journalist is a glossy magazine called Reputation Management, which covers the business of public relations. It's a subject that few journalists take the trouble to learn -- perhaps out of discomfort at examining the workings of their own business too closely. One principle in this field is that a company that can't say "Oops" is a company headed for trouble. Reputation Management's editor, Paul Holmes, says that may be what's happening to Microsoft. "When you cut off feedback, when you become so sure that you're right that you stop listening to anybody who might think that you're wrong, you become as a corporation kind of self-absorbed and self-referential," Holmes says. "The result is that you become unresponsive. Your culture becomes calcified. It's a very dangerous attitude for a corporation to adopt." Indeed, the threat to Microsoft from within is far more dangerous than anything from outside of the organization, he says: "There is an institutional arrogance at Microsoft now that is infinitely more dangerous than anything the Justice Department can throw at them." For many reporters, what's really scary is that Microsoft executives don't seem to be shooting a line. "Over the past few weeks I've come to believe that the Microsoft team isn't just cynically spinning the press when it explains away the Gates deposition. Their efforts are more genuine than that, more heartfelt. I think the Microsoft people truly are seeing something that is fundamentally at odds with what the rest of us see," Nocera said in his Fortune column. What these reporters are sensing is the cumulative pressure placed by Microsoft's self-certainty, its determination to win and its increasing isolation on its ability to project a credible media image. It is not a good sign when executives at America's largest and most important software company begin to act like monotone-voiced cultists. Fanaticism and business can make a potent combination, and few countries cultivate career obsession more than the United States. Yet there is a point beyond which commitment becomes catastrophe -- and relentless adhesion to a corporate culture leaves no room for the glimmering light of reality to seep in.