MICROSOFT'S TEFLON BILLSo far, the antitrust trial hasn't sullied the Gates ''brand''
The allegations paint a picture of a modern day robber baron. Government trustbusters have accused William H. Gates III, the legendary founder of Microsoft Corp. (MSFT)and a billionaire 50 times over, of using his company's monopoly position in crucial computer software as a bludgeon to intimidate competitors and suppliers alike. But while Microsoft may be the Standard Oil of computing, Bill Gates is no John D. Rockefeller.
Like most high-profile trials, the antitrust extravaganza starring Bill Gates is being played out in two courts: the court of law and the court of public opinion. Rockefeller's 1906 antitrust trial left a taint over the industrialist that not even gargantuan philanthropy could fully mask. In contrast, the Bill Gates aura is so far undamaged. Indeed, viewed from some angles, his image--think of it as ''Brand Bill''--may be actually enhanced by the verbal punchfest going on in Washington.
The Gates legend is by now familiar: He dropped out of Harvard at age 20 to found what became the most powerful software company in the world and amass the biggest fortune in America. His legions of admirers hail him as a visionary genius who can discern the far-reaching effects of technology long before anyone else--a reputation Gates has carefully cultivated with speeches and books such as his 1996 best-seller, The Road Ahead. Gates, who started out tinkering on a school computer, has come to embody one of America's most cherished archetypes: the self-made entrepreneur who succeeded through sheer talent and ambition.
By most measures, the flesh-and-blood Gates has come off far less admirably in his videotaped performance at his company's antitrust trial. He squirms and hedges. He argues with prosecutors over the definition of commonly used words, including ''we'' and ''compete.'' Early rounds of his deposition show him offering obfuscatory answers and saying ''I don't recall'' so many times that even the presiding judge had to chuckle. Worse, many of the technology chief's denials and pleas of ignorance have been directly refuted by prosecutors with snippets of E-mail Gates both sent and received. And it's far from over: The government has taped more than 20 hours of testimony from Gates, which it plans to play in snatches as the trial unwinds over the next two months.
But has the unflattering portrait caught on tape done anything to damage the carefully cultivated, near-mythic Brand Bill? So far, not much. Even as prosecutors try to drive home the notion that Gates is nothing more than an overgrown schoolyard bully, his popularity remains largely undented. In a recent BUSINESS WEEK/Harris poll, 32% of those surveyed admire Gates, a slight drop from the 37% favorable rating he got in June, before the trial began. But only 8% of those surveyed recently had an unfavorable view--unchanged from June.
In part, that's because many Americans are barely paying attention. Despite intense media coverage of the trial, 54% of those surveyed said they were unaware of his testimony. And the likelihood is that even those who have heard about it have seen little of his supposedly damaging performance themselves.
LIONIZED. But perhaps more telling, many of those who have heard or read about the testimony that's making judges laugh and lawyers squawk actually like what they see: 50% of those who are aware of the trial have a favorable view of the shifting, hemming, dodging Bill Gates. Image experts don't expect those numbers to change. They say the trial, which examines whether Gates and Microsoft have grown too powerful, is unlikely to topple him from his icon status. After all, building the world's most powerful software company is what made him an icon in the first place.
So what has changed since Teddy Roosevelt's trustbusters went after Rockefeller? For one thing, by the time Rockefeller was in the witness chair, there had been 15 years of muckraking stories and state cases attacking him, says Ron Chernow, author of Titan: The Life of John D. Rockefeller Sr. And in spite of government investigations and rival complaints, Gates has been lionized in a way Rockefeller never was. Gates is the boy genius who helped get the U.S. out of the doldrums of the '70s when we worried if we could ever compete with the Japanese, says Chernow. ''People associate Bill Gates with the resumption of U.S. technological supremacy in world markets,'' he says. ''He's a heroic figure in that sense.''
The resilience of the Gates aura also says something about America's sense of fair play. As Newt Gingrich and every other Republican who bet on the downfall of Bill Clinton can attest, public reaction to a man under fire is complex. Call it the rule of unintended perceptions. When Ken Starr succeeded in proving Clinton a liar, the President's approval rating soared, while the special prosecutor was vilified. Many Americans, it seemed, were repelled by the spectacle of a relentless government agent endlessly pursuing the President.
Something similar may be happening with Gates. Some see Gates as a victim of similar prosecutorial overkill. Already, 47% of people polled think the government is unfairly hampering Gates, versus just 34% who think he has too much power in his industry. ''Bill Gates is showing the government for what it is. Our government is not about helping business, it's about exploiting it,'' says Michael Branch, a Detroit doctor interviewed recently as he shopped for software. ''Gates built a better mousetrap. Leave him alone.''
Indeed, in a perverse way, doing battle with the government plays to all the strengths of the Gates legend. It lets him get back to his roots as a scrappy underdog willing to do battle with industry behemoths such as IBM. Unwittingly, prosecutors may have provided Gates with the one forum where he could credibly take on the role of an upstart David battling an evil Goliath. ''There are plenty of businesspeople out there quietly cheering: 'Go, Bill, go,''' says Edward Segal, an expert in crisis communications in Washington, D.C. ''He's standing up to the government.''
AWE-INSPIRING. Then there's the substance of the government's complaint. Image experts say the very attributes that have enraged government prosecutors are the ones that made Gates a hero. The charge that he is big and powerful inspires awe in Gates's admirers and security in his customers. ''Big is good in this business. Big is great. It says your company is going to be around tomorrow when I need to call the help line,'' says Alan Adamson, managing director for Landor Associates Inc., a marketing consultant firm.
Microsoft continues to exude confidence. ''People are more interested in our products than they are in our legal briefs,'' says Chief Operating Officer Bob Herbold. Still, there's clearly some PR work afoot to buff the boss's image. In a move reminiscent of fallen financier Michael Milken's trips to the ballfield with disadvantaged schoolkids, the public has lately seen a big dose of the softer side of Gates. Just like a dish detergent that's billed as tough on grease one month and soft on your hands the next, different facets of the Gates mystique are being showcased. At the recent Comdex show, Gates aired a self-deprecating video poking fun at himself. A week before that, a Good Morning America appearance interspersed references to the trial with shots of Gates reading to his two-year-old daughter.
Will Brand Bill's reputation slip? The trial is still in its early stages, and there's no telling how the ground could shift if the Justice Dept. wins its case. But, whatever Gates's faults, he is a legitimate business hero and the world's most successful baby boomer, with the possible exception of that other beleaguered chief executive, Bill Clinton. Execs from around the globe troop to his headquarters in Redmond, Wash., hoping for a glimpse of how he does it. At public appearances, he's mobbed for his autograph. ''This case will say a lot about who our heroes are,'' says W. Michael Hoffman, executive director of Bentley College's Center for Business Ethics in Waltham, Mass. Based on the evidence so far, Most people aren't going to let the government tell them who the bad guys are.
By Ellen Neuborne in New York, with Steve Hamm in San Mateo, Calif., and bureau reports
Updated Nov. 19, 1998 by bwwebmaster
Copyright 1998, Bloomberg L.P.