Microsoft Gets Static Over Its High-Powered Image

LAS VEGAS — Like God--or Big Brother, take your pick--Bill Gates was everywhere at the giant Comdex computer show here this week, schmoozing at the chili cook-off, listening to his competitors’ speeches and delivering his own address over and over again to clusters of attendees gathered around video monitors in the convention center lobby.

The chairman of Microsoft Corp., the richest man in America, is used to dominating things, and he has been notoriously contemptuous of those--including the U.S. Justice Department--who would censure him for doing so. His computer software company is now at the height of its powers, and Gates sees little reason to alter the take-no-prisoners style that has gotten him where he is today.

But scratch the surface at Comdex and it quickly becomes clear that the perception of Microsoft as a power-wielding juggernaut is starting to ignite latent populist antagonism against the big and powerful. On the Internet, in e-mail to the company, and in countless casual conversations, people are proclaiming their opposition to Microsoft and vowing not to use the company’s products.

Gates insists this is all a non-issue. “There are people who don’t like capitalism, and there are people who don’t like PCs,” he said in an interview. “But there’s no one who likes the PC who doesn’t like Microsoft.”

Vilifying Microsoft as the Evil Empire is a cliche in the computer industry. Microsoft’s competitors, some of whom support alternatives to the personal computer, or PC, often portray themselves as victims of the Death Star rather than of capitalism.

But the flavor of the criticism and the identity of the critics is now shifting in such a way that observers say even the mighty Microsoft would do well to pay heed. The new critics are those who might or might not buy and use Microsoft’s software.

“My left brain is saying, ‘Let’s be rational, we have to go with the established industry leader,’ ” said Damon Torres, who is considering purchasing Microsoft’s Internet software for his small firm. “But my right brain is saying, ‘They have too much influence, maybe we should go with the underdog.’ ”

Added Paul Pedriana, who bought Internet software from Microsoft rival Netscape Communications for $79 even though Microsoft is giving away its competing product for free: “If you side with Microsoft on Web browsers now, they’ll monopolize the market and twist the Internet for their own purposes.”

This kind of disaffection could be particularly dangerous for Microsoft as it tries to extend its dominance to the Internet and lure more nontechnical consumers into the computer world. A backlash could help tip the competitive balance against Microsoft in some new markets, and might even encourage the federal government in its on-again, off-again antitrust investigation of the company.

Whether that would be good for consumers and the computer industry in the long run is a matter of heated debate. Microsoft, which earned $614 million on sales of $2.3 billion in its most recent quarter, enjoys a virtual monopoly on the basic operating software that controls personal computers, and it dominates the market for applications ranging from word processors to electronic encyclopedias.

None of its direct competitors are nearly that profitable or powerful, and some claim Microsoft unfairly uses its power to destroy rivals and that its dominance is stifling innovation. But others say the company is setting much-needed standards and is serving its many customers well, and that it got to where it is today by creating good products and marketing them well.

Even as Gates denies that image matters, the company is making some efforts to show a more human face. Gates will visit the Los Angeles Public Library next week as part of a major new corporate philanthropy effort to get schools and libraries online.

The company recently declared its intention to abide by consensual standards for the World Wide Web. Internet developers say the company has been far more flexible in dealing with them than it has reputed to be in the past.

And anyone attending the Microsoft “Geek Fest” party at a wedding chapel here this week could tie the knot for free, courtesy of Chairman Bill. (Microsoft’s minister conducted several “renewal of vows.”)

Still, Geek Fest attendees from Microsoft’s advertising firm, Wieden & Kennedy, note that the giant Redmond, Wash.-based firm does not necessarily want to be seen as kinder and gentler.

“I wouldn’t say ‘human,’ ” said one person who works on the Microsoft account. “ ‘Cool’ is the operative word.” Though Wieden & Kennedy declined any formal comment, distancing the company’s image from that of Gates is said to be part of its mission.

Business historians say that might be a smart move because public hostility toward big corporations of the past was usually aimed at personalities like oil magnate John D. Rockefeller or railroad baron Jay Gould.

Rockefeller, to whom Gates is often compared, was the first American businessman to hire a public relations firm--to burnish the image of his Standard Oil Co.

But to Gates--who after all is the highly esteemed focus of the alt.fan.bill.gates newsgroup and the “Team Gates” Web club founded recently by a 15-year-old Dane--the idea of a corporate image appears to be something of an anathema.

“Microsoft is known by people who use our software products, and that is the primary impression anybody is going to have of us,” Gates said. “The only image we can have is the one that reflects what we are. We are a great software company. . . . That’s the only image anyone should have of us.”

Despite pleas from all corners of the industry, Gates has largely declined to change the company’s hardball business tactics. And it is certainly true that many continue to regard the software giant as an admirable paradigm of entrepreneurial success.

But critics say such Gates’ attitude could begin to backfire in the democratic environment of the Internet.

“I’ve had conversations with Gates and top PR people about this issue, and they say their image within the industry has never polluted public perception,” said Jesse Berst, founder of the Windows Watcher newsletter. “But the Internet really raises the stakes and creates a more democratic consumerism, and I would argue it’s begun to leak out to the customer. There is a small but growing group of large companies that feel at risk because they do so much business with Microsoft, and they’re anxious to have choices.”

Thomas Hughes, who has studied technological entrepreneurs, says even American icons like Henry Ford and Thomas Edison later in their careers “didn’t take criticism and skepticism seriously enough. Having been so often criticized and proven to be right, one begins to assume one will continue to be right.

“Microsoft has been so dominant for so long it might not have a sufficient degree of humility that perhaps even a large corporation should display at times,” added Hughes, a professor at the Massachusetts Institute of Technology. “There has long been a feeling of resentment on the part of the public in the face of bigness and the kind of control that bigness implies over their lives.”

Though it may not permeate the senior management ranks, many of Microsoft’s rank-and-file are acutely aware of the company as an object of hatred. Greg Leake, product manager for Microsoft’s Internet Studio development tool, recently vetoed a proposed logo because it “looked too much like the Death Star.”

Kevin Connolly answers e-mail from members of Microsoft’s Site Builder program, a free service to Web site designers.

“On a bad day it can seriously hurt to read the stuff that comes in,” he said. “It’s not just that they don’t like a particular product. They hate Microsoft, with a passion.”

On the Web, “Stop Gates” green ribbons are pinned to home pages and the “Society Against Internet Explorer”--they refer to Microsoft’s Web browser as “Internet Exploiter”--has attracted several hundred members.

The International Anti-MS Network is recruiting too, and traffic is heavy on the Anti-M$ mailing list.

Striding through the cavernous Microsoft booth at Comdex, Matthew Fletcher stopped to grimace. “I was just thinking how they’re the Evil Empire,” said the graphics designer. “Utter lack of creativity fueled by the ability to buy whatever they need.”

In a cab on the way to the night’s kitsch-laden parties, Eric Crisler says he’s new to the industry but “I have a negative feeling about [Microsoft]. It has to do with Bill Gates. I don’t like him. He’s just so--powerful.”

“What I really hope is that Microsoft will say, ‘We really shouldn’t be conducting ourselves this way because people don’t like it and people are our customers,’ ” said Mitch Stone, an environmental consultant in Santa Paula who recently put up a “Boycott Microsoft” site. “I want them to see it damages their interests in the long run.”