Oracle's School of Testosterone Management

It's interesting that Lawrence J. Ellison believes he's creating the management style for the Internet Age (''Oracle: Why it's cool again,'' Cover Story, May 8). The organizing principle of the Internet is a feminine one: The Web is built on relationships, not hierarchy. Nobody is in charge; there's not a Lone Ranger in sight. Oracle is pursuing a relationship strategy in the marketplace, but when it comes to Oracle's own community, ''It's all about centralized control, and Larry is in charge.''

Ellison appears to think that one should manage to the lowest common denominator--ignoring the fact that 98% of folks come to work to do a good job and to contribute to the success of the enterprise. His ''drill down'' approach may save money in the near term, but it produces a cost consciousness that arises out of fear of reprisal rather than out of genuine concern for profitability. Rather than treating his people as intelligent business partners, Ellison is operating as an all-knowing patriarch with a bunch of naughty children.

You perpetuate the image of leader as white male conqueror and create the impression that there aren't more humane and effective ways to run a business. You also suggest that guys like Ellison are courageous to clamp down, when in fact what takes the most guts in today's business world is to experiment with new ways of leading and managing that don't rely on the old Lone Ranger approach. Both Business Week and Ellison have fallen into the testosterone trap.

Chris Turner
Cambridge, Mass.

What's Right about Compuware

The sexual-harassment case against Compuware CEO Peter J. Karmanos Jr. by a female former employee, which you say is pending, was dismissed by the court prior to trial (''Compuware's Y2K bug,'' The Corporation, May 8).

Next, Damian Rinaldi of First Albany Corp. FAC/Equities was quoted as saying that Compuware's software business is a ''horrendous mess.'' He actually said the business had a ''horrendous miss'' in the fiscal fourth quarter. This is a significant difference.

The competitive sales situation you outline involving a unit of Dutch banking giant ABN Amro is misleading. The $6 million contract to which you refer remains in place. We did compete on an ABN Amro business opportunity in which our price was more than 25% higher than the prior contract. However, the proposal doubled the software capacity of the previous agreement, included $2.3 million of new products, and no price increase. While we did not close this business, we continue to enjoy a solid and financially important relationship with ABN Amro on a global basis.

Finally, I would expect our competitors to take any opportunity to say that we ''price-gouge.'' Our customers renew their software agreements at an over-95% rate. Is it such a stretch to think that customers derive incredible value from new investment in our products?

Beth Chappell
Executive Vice-President
Compuware Corp.
Farmington Hills, Mich.

Editor's note: The lawsuit is still pending. In January, a Michigan judge dismissed the sexual harassment claim, saying Karmanos' alleged behavior, while ''unprofessional and inappropriate,'' was not pervasive enough to constitute a hostile work environment. But he allowed the case to proceed on a remaining charge--that Karmanos allegedly coerced a woman to resign after he pressured her to alter her testimony in a sexual harassment case involving another female employee.

Taking Another Look at Futures

We are disappointed that ''The case against single-stock futures'' (Finance, May 22) turned into an attempt to generate controversy rather than explain the issues. The clearest example is citing the General Accounting Office's warning that single-stock futures could encourage manipulation. The report made it clear that the ''warning'' was from fearful competitors, not the GAO.

Furthermore, author Joseph Weber describes a futures transaction in which the seller of the contract satisfies his obligation by delivering stock. But stock-based futures contracts settle by means of a cash payment. He suggests that the Securities & Exchange Commission's insider-trading rules could be avoided by using futures as a surrogate for stock. That is incorrect: Our proposal to amend the law preserves SEC jurisdiction to enforce insider- and short-swing trading prohibitions.

Weber also compares futures margins with margins on stock. The correct, apples-to-apples comparison is futures margins and margins on synthetic futures created by using security options, as we pointed out to him. We have agreed that such margins should be at the same levels, but he suggests that options have less risk than futures, and ignores the sell-side risk of the option writer. He assumes the public trader does not write security options or take the same risk as a futures trader.

What's more, Weber argues that Congress might be ''rushing to approve a product of limited appeal.'' Bear in mind that, in the face of overwhelming opposition, the Chicago Mercantile Exchange in 1982 created equity indexes, a useful product that has served the public interest well. The SEC and its regulated exchanges opposed futures on indexes with all of the same arguments they now raise against futures on individual securities. Yet they are now among the most popular contracts on securities exchanges and futures exchanges alike. Futures trading of equity indexes has enhanced customer opportunity, and the public has clearly benefited from the existence of these products.

Scott Gordon, Chairman
James J. McNulty, President & CEO
Chicago Mercantile Exchange
Chicago

Microsoft's Crafty PR Counterattack

Microsoft Corp. has shown great skill in rising to dominance of the software industry--if not by producing the best product then by manipulation of the market. That cunning has led to escapades such as the botched attempt to influence the Administration's antitrust budget increase (''Microsoft's all-out counterattack,'' Government, May 15).

Now Microsoft may be heading for an even more devastating public-relations setback by spreading a blizzard of money to its apologists and withholding any reward from critics. Even those who believe the government has no case to break up the company risk being labeled as paid apologists, and a critic will be recognized as an independent thinker, but poorer.

L. David Minsk
Hanover, N.H.


Your chilling analysis of Microsoft's subterranean assault on the Justice Dept. creeped me out like nothing since learning of Ronald Reagan subcontracting foreign policy to Oliver North. Lest history repeat itself, the upcoming Presidential election may well offer us a choice between the Innovation candidate and the Monopoly candidate.

Ian Keay
Palo Alto, Calif.

Breakup Will Make Some Problems Worse

One difficulty with breaking up Microsoft is that it moves the developers of the software away from those who upgrade and add features (''A win-win-win breakup?'' Technology & You, May 15). With more than 4 million lines of code, only a handful of programmers knows where all the ''skeletons'' are. Disclosure won't solve that problem. The ability to integrate applications into the operating system is a subtle, difficult task. Even Microsoft is having problems with this--breakup would make the problem worse.

The real villain in Microsoft's hold on the market is the noncompetitive pricing of its products. Microsoft Office 2000 is now priced at $539.95 at discount. The predatory pricing bears no relationship to the actual cost of research and development, production, and delivery. The only place Microsoft can really be effectively contained is in the pricing.

James M. Ryan
Plano, Tex.

Janus Is Still a Sound Investment

I was appalled at the ingratitude, corporate greed, and lack of appreciation that Kansas City Southern Industries Inc. has shown toward Janus Capital Corp. (''If Janus ain't broke...,'' Finance, May 15). As a small investor, I have been delighted with this group of talented managers, who have consistently shown the level of smarts that investing in this new economy requires.

At my age (71) I have learned the hard way never to underestimate corporate greed, poor judgment, and lack of consideration for the ordinary investors who have made billions for KCSI. If their machinations cause a huge loss of Janus' management talent, I plan to vote with my feet by seeking other investments quickly.

Joan Schaeffer
Anacortes, Wash.

The Truth about Free Trade

Your title asks: ''Did NAFTA backers bamboozle America?'' (Books, May 8). From my vantage point, the answer is that of course they did. Having been deeply involved in trade matters at the time that the North American Free Trade Agreement negotiations were moving toward a finish, I was a member of one of the many private-sector advisory boards the government creates from time to time.

I remember sitting opposite one of the chief negotiators of the agreement whom I have known for over 20 years. I posed a question. ''Do you really believe that NAFTA will create jobs in the U.S. net of the losses of jobs that will occur?'' He thought for a moment and then looked at me and said, ''Hopefully, it will slow down illegal immigration.''

Free trade is fundamentally good, but not all free trade is good. The losers in this battle have been the blue-collar noncollege graduates who have seen their middle-class jobs disappear to Mexico and other developing nations around the world.

Richard P. Simmons
Chairman
Allegheny Technologies
Pittsburgh

''Shakeout e-tailers'' (e.biz, May 15, 2000)

''Shakeout e-tailers'' (e.biz, May 15) should have said that each of HomeGrocer.com's distribution centers is expected to break even 12 or 15 months after launch.

''On the Web--but with a broker on standby'' (BusinessWeek Investor, May 22, 2000)

''On the Web--but with a broker on standby'' (BusinessWeek Investor, May 22) should have said that the Prudential Securities Advisor account charges $24.95 per trade, not $29.95. This is in addition to the account's asset-based fee.

''Novell bets the farm'' (Information Technology, May 29, 2000)

''Novell bets the farm'' (Information Technology, May 29) contained incomplete or erroneous information about Novell Inc. The company's market share for network-operating systems dwindled from 44% to 19% between 1993 and 1999, while Microsoft Corp.'s has risen from 2% to 38%, according to International Data Corp. The story also should have said that Novell's bundle of software was to be launched at the end of May.