The DOJ


I am a member of the Microsoft Political Action Committee.  Even though I am no longer at Microsoft I maintain close relations with fellow MSPAC members and am still invited to events.  The other day they had Michael Brown, founder of a non-profit called City Year.  Before speaking he showed a video of teachers, administrators and supporters.  Among those supporters was an attorney named Joel Klein.  Had Michael showed this video 10 years earlier he would have been escorted out of the room.  For those who did not follow or do not remember, Mr Klein was the lead attorney for the Department of Justice in their landmark case of the US versus Microsoft.  Since I had already decided the DOJ would be my next topic I can only say “how fortunate can a blogger be?”.

The winds of the DOJ had already started following the release of Windows 95.  As Netscape started to lose ground in the browser war it was increasingly clear that they would not be able to compete.  Internally around 1997 or 1998 a memo went around in email written by Jim Alchin.  It was pretty simple – Microsoft should leverage its greatest asset in the browser wars, the Windows Operating System.  Even at that time I did not think twice, it made total sense for Microsoft to bundle the browser with the operating system.  However the industry did not see things the same way and so the rumors began to swirl and build. 

 The case had already begun in Spring of 1998.  At the Microsoft Global Sales Summit in 1999, held in San Francisco it was almost eery how the DOJ cast a shadow over the event. . For starters on the opening night everyone went to the usual reception part, everyone froze their butt off.  Unlike previous events in Orlando, New Orléans or San Diego, we were not trying to cool off with a beer or six.  It was a cold summer night in San Francisco.  It brought to life the famous Mark Twain quote, “The coldest winter I ever spent was a summer night in San Francisco”.  The event lacked luster after that.  There were no big product releases, nothing really to rally around.  When Ballmer did his keynote he ran around the audience like a crazed lunatic (he still does to this day).  When he finally settled down and got onstage it took him 5 minutes to catch his breadth.  I thought he was going to have a heart-attack.  I thought to myself, not only is the company being  targeted by the DOJ, now one of our key executives is going to die on stage in front of 10,000 people.  I remember leaving MGS that year not as in love with the company as I had been in the past.  It seemed like we had lost something.  On a good note the last evenings entertainment was the B-52’s!!

Back at corporate it was very hard I believe on all the employees.  For starters for those of you who hate big government and don’t believe they can do anything right, this is not your story.  However you feel about Microsoft, anti-trust, or government intervention in markets etc..the DOJ from a marketing and PR standpoint simply crushed Microsoft.  It was embarrassing.  At one internal company town hall an employee got up obviously flustered and said “I don’t even recognize the company being portrayed in the media”.  It was sad, but how true it was.  Every executive who testified in court seemed over matched from the start.  It seemed every day I went to work during the trial that nothing was going well.  I was traveling a lot in those days around the country meeting with customers.  It seemed like every conversation had to start with a talk about the state of the DOJ case.  To the DOJ’s credit every mistake made on the stand was a chance to show the world via the cable networks how bad we were, they were always attacking and we were always defending.  As much as executives tried to say don’t worry about the DOJ just focus on your work, in the age of the internet it was just impossible to ignore.

As the case wound down Netscape was aquired by AOL.  It put some temporary brakes on the DOJ momentum, but not much.  The Microsoft take was the technology industry was too innovative and fast paced, that change would happen by itself and needed to regulation.  As Windows and Office today slowly begin to die I feel that was true then and is still true today.  But to try and explain to courts and the public was difficult.  In hearings before congress you would have Scott McNeely and Jim Barksdale sitting next to Steve and Bill.  Scott and Jim talked about the challenges of competing against a “monopoly”.  The case was essentially about Microsoft’s ability to use the OS to bundle new software offering thus limiting the ability of the competition.  In this case the new software offering was the browser. Bill would say this was the weakest case that could have  been brought against Microsoft.  Had they gone after the OEM business, in my opinion, the case could have got ugly fast.

I had a business trip scheduled back east in November of 2000.  I was on United Airlines flying to Washington DC and had brought my latest issue of Wired Magazine.  It was titled “The Truth,  The Whole Truth and Nothing But The Truth” by John Heilermann.  It was a very long and thorough article on the inner workings of the DOJ trial.  How the DOJ was pushing hard to get Steve Jobs to testify, the emotional toll the case was taking on Bill Gates, how the Microsoft competition were lobbying on Capitol Hill.  It took me all 5 hours on the plane to read the article and when I landed I was tired.  From a Microsoft standpoint the article was emotional and hard to swallow.  Could this be true?

On the way home from DC I was with a fellow co-worker Janet Wu.  We were in the United Red Carpet club.  As everyone did we went to laptop lane.  This was still Dotcom boom time so every plane was cramped and the airport was always super busy. In laptop lane you had wall to wall modems set up so it was just a question of finding space and getting connected.  Getting connected was not easy.  You had to VPN in and of course it was all dial-up.  I had a Toshiba laptop and found a spot.  Janet was at the other end.  I remember I struggled trying to get connected.  I finally got frustrated and went down to see if Janet had got connected.  She had so I went back to my laptop sand sat down and…Iwas connected!!  The strange thing was in my inbox the fonts were different and I had a lot of emails from executives.  I remember Steve Guggenheimer (now a VP at MS)  had sent me an email.  I was a bit confused by my new found popularity.  I looked to the person next to me, but the chair was empty.  They had a Toshiba laptop too.  Son of a bitch I had sat down at the wrong laptop!! When the person came back I apologized..greatly, as it was clear this was a person of some power.  Turns out the person  was David Heiner, anti-trust attorney.  I had just been reading emails about one of the largest cases of the century.  Of course it did raise questions of David’s basic knowledge of PC Security.  We left, Janet and I to catch our flight.

I got to my seat ( a middle seat!!) on United’s filled to capacity flight back to Seattle and who should sit next to me..David Heiner!!  We got to talking and I learned the David was now starting to focus on what was going in Europe as they spun up their own case through the European Union (EU).  I then mentioned that I had read the article in Wired Magazine.  David lit up, “that article is absolute bullshit!!” He then proceeded to go on a small little tirade on why.  However in the end as the conversation winded down he uttered the words I’ll never forget, “…but man that guy had good sources”.  I guess it was all true.

As it became increasing clear that Microsoft was not going to win  the remedy plans started to surface.  One thing I never understood was the scenarios that were being proposed to break Microsoft up.  Some were stupid.  One was an idea to follow the baby Bell model.  We would have had regional OS’s – I don’t think anyone took that seriously.  Others wanted to separate the Office and Windows business.  Split off the MSN business.  In the end the settlement  that was finalized on Nov 2, 2001 was what many view as a slap on the wrist.  Microsoft was allowed to continue to bundle software withe OS, but had to share some API’s.  Many view the settlement as a failure, but the tarnish to Microsoft’s public image had been done.

Reflecting back the DOJ trial was a titanic shift for Microsoft and it’s employees.  It hurt everyone there at the time.  It was a loss of our innocence.  I would get very involved with the MSPAC after the events of the DOJ, because to sit outside the political game was no longer reality.  Gone were the days of admiration just because you worked at Microsoft.    The arrogance and self confidence that had created Microsoft’s success was now a detriment.  Soon there after the brain drain would begin.  There was a time when no one left Microsoft, but things were changing and there were exciting things happening elsewhere in the industry.  It was a challenging time to be at Microsoft and it was a time I will never forget.

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