Win98 PR war heats up with Microsoft letter to partners

Microsoft has sent a letter to business partners warning of the broad negative consequences a possible delay of the shipment of Windows 98 would have on the entire PC industry and the US economy overall. 'It is always difficult to predict the economic impact of events, but should the Department of Justice or state Attorneys General seek to interfere with the launch of Windows 98, there are likely to be broad, negative consequences not just for Microsoft but for the entire PC industry,' states the letter, signed by Microsoft CFO Greg Maffei.

Microsoft has sent a letter to business partners warning of the broad negative consequences a possible delay of the shipment of Windows 98 would have on the entire PC industry and the US economy overall.

"It is always difficult to predict the economic impact of events, but should the Department of Justice or state Attorneys General seek to interfere with the launch of Windows 98, there are likely to be broad, negative consequences not just for Microsoft but for the entire PC industry," states the letter, signed by Microsoft Chief Financial Officer Greg Maffei.

The letter was sent to the chief financial officers of about 50 companies, including all major PC makers, software developers, PC and software retail chains and resellers, a Microsoft spokeswoman said, and also to all major Wall Street securities firms and the press. She added that the US Department of Justice did not receive a copy.

The letter outlines the consequences that a delay in the shipment of the upgraded operating system would have on PC manufacturers, independent software vendors (ISVs), hardware peripheral device manufacturers, computer resellers and retailers, and value-added service providers.

The letter follows recent reports that the attorneys general of more than a dozen US states are preparing antitrust actions designed to prevent Microsoft from shipping Windows 98 this June.

At the same time, the DOJ continues its legal battle with Microsoft, alleging the company violated a 1995 consent decree that barred the company from engaging in anticompetitive licensing practices.

While PC makers and ISVs would lose money poured into marketing and advertising campaigns promoting products built around Windows 98, resellers and retailers would lose millions in sales in new PCs, new software, peripherals, books and training courses, Maffei said.

Looking at the issue more broadly, Maffei said the IT industry is a significant contributor to the U.S.' economic growth, which accounts "for more than 8% of our national output, much of it for export."

"A 1996 DRI/McGraw Hill study found that, during the past decade, every dollar spent on Microsoft software raised business productivity by an equivalent amount. This, in turn, improved the U.S. economy's growth, investment and employment environment so significantly that it produced a cumulative net gain in GDP (gross domestic product) equivalent to more than $4 for every $1 spent on our software," Maffei said in the letter.

So far the company has not received any responses to the letter, the Microsoft spokeswoman said.

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