Pitch #2

Pg. 31 - 60

• when he got the news that the headquarters in Redmond had exploded, “Bill just went through the roof. He went ballistic. He was so mad he was actually throwing things,” said one Microsoft manager (page 31)
• he was so upset that he didn’t wait to launch into an angry attack on Novell (the ringleader of a handful of disgruntled Microsoft competitors who had been complaining to the FTC (Federal Trade Commission) and stroking the fires of its antitrust investigation) and its chief executive, Raymond Noorda
• real name: William Henry Gates III
• Fox à his biggest acquisition ever à paid $173 million
• by buying Fox, Microsoft was able to go after some of Borland’s customers immediately, essentially striking another blow against Gates’s archenemy Philippe Kahn, Borland’s founder. The 2 industry pioneers were like matter and antimatter à bring them together, EXPLOSION!
• Microsoft’s power = power of Nazi Germany
• when Kahn commented that Microsoft used unfair tactics to maintain its stranglehold on the market, Gates confronted him by demanding, “What exactly did you mean by that?” as he poked his finger at Borland’s chairman
• Kahn said, “Gates looks at everything as something that should be his. He acts in any way he can to make it his. It can be an idea, market share, or a contract. There is not an ounce of conscientiousness or compassion in him. The notion of fairness means nothing to him. The only thing he understands is leverage.”
• Gates wanted to buy Novell, his longtime fierce rival à highly suspicious
• Gates wanted a beachhead in a market that it didn’t control – the software that linked computers to networks
• when Novell captured nearly 70% of the market with its networking software, Microsoft’s network software lagged far behind à Gates once again played the if-you-can’t-beat-‘em-buy-‘em card
• Gates offered to buy Novell for about $2 billion, and Gates met with Noorda to work out the details
• but Gates soon had second thoughts: when Noorda didn’t hear anything from Gates, he called him to find out whether the merger was still on à it wasn’t à not practical to merge the companies, there were too many technical problems à Gates worried about potential antitrust problems
• Noorda believed the merger had been a ruse all along and that Gates had used the talks to gain access to confidential information about the company’s networking business
• Gary Kildall, Bill Gates’s friend, also a software pioineer who had founded Digital Research and developed an operating system then widely in use – CP/M, described Microsoft’s DOS (Microsoft’s operating system) as a “clone” of CP/M
• he wrote of Gates, “I have grown up in this industry with Gates. He is divisive. He is manipulative. He is a user. He has taken much from me and the industry. To those who knew the industry, Gates’s DOS was a blatant misappropriation of proprietary materials, and of my personal pride and achievements.”
• Gates met Noorda briefly in San Francisco to discuss the merger à before the merger could go forward, he said Novell had to drop its plans to buy Digital Research. à when Noorda raised the possibility that the Justice Department might try to block a merger between the first and third biggest software companies on the planet, Gates responded, “Don’t worry, we know how to handle the federal government.” à Gates denied every saying such a thing
• because Microsoft didn’t merge with Novell, the FTC investigators figured Gates was up to his old business tricks and had engaged Novell in talks in an attempt to delay its purchase of DR DOS
• when asked about the FTC investigation, Gates had remarked that the worst thing that could happen to him was that he would trip going up the steps of the FTC building
• Gates’s parents had long been active in Republican Party politics, Gates had remained apolitical for much of his adult life, though he considered himself to be more liberal than his parents
• Bill Gates had voted for Clinton in the 1992 presidential election
• Gates said, “Our greatest success is due to one single fact… that I was willing to bet the whole company on the graphical interface.”
• FTC’s Bureau of Competition say him as Darth Vader, the Bureau of Economics saw him as Luke Skywalker and was dead set against taking any action against Microsoft
• critics complained that Microsoft had grown so powerful that it dominated emerging new markets, stifling competition in a vibrant industry where entrepreneurship is considered the key to long-term health
• in the eyes of one FTC economist, Microsoft was a national treasure that needed to be preserved, and a drawn-out antitrust action could severely damage the company, not reform it
• more than 500 companies had been formed to create software for Windows, and those companies employed about 18,000 people nationwide
• Commissioner Owen liked and respected Gates à “He stuck me as a man who knew his business and was passionate about his business. That is in marked contrast to a lot of corporate people whom I have seen while I have been here at the commission, and in marked contrast to some of the corporate people I spoke with on this matter who didn’t seem to know their business at all. I was stunned at some of the representations that people came in here and made to me.”