Microsoft chairman and CEO Bill Gates has continued to take the public relations offensive, sending a four-page letter to 25,700 employees and one million shareholders, outlining the company's competitive spirit and all the good he says it has done for technology.
The software giant is under investigation by the US Department of Justice, which alleges that Microsoft has violated a 1995 consent decree by requiring PC makers to offer the Windows 95 operating system bundled with the company's Internet Explorer browser as a condition of licensing agreements. The investigation heated up in October when the DOJ asked for, and subsequently received, a preliminary injunction from a federal judge ordering Microsoft to unbundle IE from Windows 95.
"My goal has always been to create software that improves the quality of people's lives, so it's disappointing for me to see the government now trying to put controls on an American success story," Gates writes, following a theme that has been central to the company's defense and was part of a largely favorable interview between Gates and U.S. TV journalist Barbara Walters that aired on the ABC network's news program 20/20 Friday night.
Microsoft has taken a drubbing in the media since October and corporate executives have admitted that their response to the investigation was not handled well. In what seems to be an attempt at damage control, Gates has recently been at the fore of the company's campaign to portray itself as a good corporate citizen and competitor.
Microsoft recently agreed to offer an unbundled Windows 95 in order to settle a DOJ request that the company be held in contempt of court for violating the preliminary injunction. However, the DOJ case against the company continues.
Spurred by "competitors and detractors," the government is trying to limit Microsoft's "ability to compete," the letter contends. Removing IE from Windows "is not simple, as some might think," the letter says.
"These features are integrated into the operating system and are used by applications and directly by users," Gates wrote. "Removing them breaks the applications, degrades other aspects of the operating system and leaves consumers worse off.
"It appears that the Justice Department believes that Microsoft should never integrate into Windows anything new that was once sold separately. Under these ground rules, we wouldn't have been able to create Windows 95 or Windows NT. We'd be stuck offering operating systems that solved the problems of yesterday, rather than the challenges of today or tomorrow."
The computer software industry is thriving and competitive and "does not need this type of government intervention," Gates says in the letter. And while Microsoft has had a hand in industry advances, "we account for less than 5% of total software industry revenues and must face new competitors everyday" with the number of US software companies doubling to 44,000 since 1990.
The letter mentions Microsoft rivals, IBM, Oracle, Sun Microsystems and Netscape and says "If we didn't have so many competitors, there wouldn't be nearly so much noise about a lack of competition!"
Windows has "played a significant part in fostering this creativity and competition by providing an open platform on which tens of thousands of companies can freely innovate," Gates says. "The great thing about Windows is that it hides the differences between all the different hardware and enables the software to work together."
Besides emphasising the worth of Microsoft's operating system, which runs 90% of PCs, Gates' letter also contends that bundling IE into Windows "promotes the efficiency and competition that the Internet provides." Again picking up a theme he emphasised during last Friday's televised interview, Gates argues that despite DOJ claims that Microsoft is trying to dominate the browser market, the company cannot control the Internet and, in fact, wants cyberspace to remain free.
"That's why we spend considerable money and effort helping advance Internet standards that ensure freedom to exchange information and transact business in any way that anybody wishes," he wrote. "That's the beauty of the Internet."
The full text of Gates' letter has been posted on the company's World Wide Web site at http://www.microsoft.com/presspass/.