Microsoft polishes image to reach Windows gold
By Richard Morochove
First published April 16, 1998
Windows 98 is expected to bring in more than one billion dollars (U.S.). That's what's at stake as Microsoft and the U.S. Department of Justice get together for another round of poker next week.
To reach that pot of gold it appears Microsoft is willing to do almost anything, including planting favourable stories in the press.
Survey results from research firm Techtel Corp.
show how Microsoft's image has been tarnished by the ongoing
investigations into its business practices. Among consumers in
the home PC market surveyed in the fourth quarter of 1997, 67 per
cent held a positive opinion of Microsoft, down 5 per cent from
the prior quarter. This was the software company's lowest
approval level in the two year history of the firm's home PC user
survey. 
Microsoft is fighting back with an advertising campaign it kicked off last week. The first ad in the series espouses homespun values such as the importance of education and grandparents communicating with grandchildren and ties them into, of all things, Microsoft's Internet software.
"Every wave of innovation and integration creates another wave of great ideas," said the advertisement. "Imagine if someone had tried to stop innovation in automobiles in the 1920s, or TVs in the 1950s. In the same way, no one should try to freeze software innovation in 1998."
The ad is just the first step in a major effort by Microsoft to polish its tarnished image. The Los Angeles Times reported last week that Microsoft plans a media campaign designed to give the appearance it enjoys widespread public support.
Microsoft's public relations firms plan to commission newspaper articles, letters to the editor and opinion pieces represented as spontaneous testimonials, according to the Times. By manipulating the company's image in key states, it hopes to stave off legal actions by state attorneys general. After initially denying existence of the plan, a Microsoft spokesman said it was merely a proposal that was discussed.
Last week, Microsoft distributed RC-1 (Release Candidate 1) of Windows 98 to beta testers. While the features of the new operating system are complete, there are still a few bugs to be tracked and eliminated.
If all goes well, Windows 98 will be completed and shipped to manufacturers in mid-May. Then PC makers will have it in time to load onto new machines and Microsoft's retail upgrade packages will be ready for the official launch in June.
Yet I would say there's now no better than a 7 in 10 chance that Microsoft's Windows 98 launch will come off as planned. If the Windows launch is delayed due to legal actions this would have a major impact on the computer industry as PC makers re-schedule the launches of their new computer hardware that uses the new operating system.
Microsoft is under intense scrutiny for its allegedly unfair business practices. At last count, the U.S. Department of Justice, attorneys general in 27 of the 50 American states, the European Commission and Japanese trade officials are all investigating Microsoft.
The Justice department is reportedly considering new antitrust charges related to Windows 98, before its scheduled shipment date of June 25. Previously, the Justice department was concerned only with Windows 95.
Speculation is the Justice Department will require Microsoft to unbundle its Internet Explorer Web browser from the new Windows, similar to its conditions for Windows 95. This would delay the release by at least six months since it appears Microsoft has no Explorer-free version of Windows 98 waiting in the wings.
Microsoft attempted to appease the Justice Department last week by changing its contracts with Internet content providers such as Disney, PointCast and America Online, which are featured in the active channel bar of Internet Explorer. The content providers are no longer required to promote only Internet Explorer and may now enter into agreements with other Internet push-technology systems.
Reportedly, eleven of the states have banded together to prepare their own antitrust case. The states believe the Justice Department has moved too slowly on anti-competitive issues related to Windows 98. The new case would allege that Microsoft violated U.S. antitrust laws by illegally extending its control of personal computer operating software by incorporating Internet Explorer into Windows 98.
Currently involved are California, Connecticut, Florida, Illinois, Iowa, Massachusetts, Minnesota, New York, South Carolina, Texas, and Wisconsin. Others may join before the suit is filed, probably later this month.
An unidentified group, likely composed of competing software developers, has filed a ten-point plan with the Justice Department. The plan calls for the establishment of a monitoring agency to ensure that Microsoft complies with fair business practices. The document says that Microsoft's software applications business should operate separately from its operating systems business. The plan recommends that Microsoft be prohibited from crippling the operations of competing products, predatory pricing, discriminatory access to Internet content and anti-competitive licensing practices. CW
Richard Morochove, FCA, is a Toronto-based computer consultant.
Copyright ©1998 by Morochove & Associates Inc. All rights reserved. This work may not be copied or distributed by any means without our prior written permission.
Click here to read the latest computer news and views!
Visit the
ComputerWatch Archive to see more columns
Post any questions or comments about this article to