Defending Goliath? Microsoft's Leader Takes Shots at Foes

By Abrahms, Doug | The Washington Times (Washington, DC), November 4, 1997 | Go to article overview

Defending Goliath? Microsoft's Leader Takes Shots at Foes


Abrahms, Doug, The Washington Times (Washington, DC)


Microsoft Corp. accounts for only 4 percent of the revenue in the software industry, so fears that the company monopolizes the industry are overblown, said Robert Herbold, Microsoft's chief operating officer.

The company is good at writing software and should not be punished by antitrust investigations, Mr. Herbold said in a luncheon interview with editors and reporters at The Washington Times yesterday. The computer industry brings about falling prices, rapid innovation and new services, he said.

"Does that feel like an industry that needs a lot of regulation?" Mr. Herbold asked.

His comments were part of the company's offensive against competitors and the Justice Department, which is seeking a record $1 million-a-day fine against the software manufacturer. Last month, the Justice Department asked a federal district court to stop Microsoft from extending its operating-system monopoly to software that connects consumers to the Internet.

"Microsoft is unlawfully taking advantage of its Windows monopoly to protect and extend that monopoly," Attorney General Janet Reno said at the time.

A phalanx of Microsoft bashers have lined up behind the Justice Department, including consumer watchdog Ralph Nader, industry groups such as the Computer & Communications Industry Association and Sen. Orrin Hatch, Utah Republican and chairman of the Judiciary Committee. That committee is holding a hearing today about competition in the computer era.

"What we're talking about is making them the only real way to get access to the Internet and making the world standard their standard," said Ed Black, president of the Computer & Communications association. "The remedy, down the road, could be to treat Microsoft as a huge AT&T."

The public-relations style of the Redmond, Wash., software giant can be jolting to other industries. Microsoft has startled businesses outside the computer field, most notably banks, by aggressively pursuing electronic commerce that could change the way their business is done.

In 1994, Microsoft Chief Executive Bill Gates called banks "dinosaurs" for not moving fast enough into Internet banking. In retrospect, Mr. Herbold said Microsoft should not have made that statement.

"What we tell banks day after day after day is that we have no intention of becoming a bank," he said.

But the banks took note, and moved faster into electronic banking, said Matt Lawlor, president of Online Resources & Communications. The McLean company provides Internet and telephone banking services for 170 financial institutions, including Riggs Bank.

"Microsoft are not bad guys, they're just good businessmen," Mr. Lawlor said. "But it's in the interest of the banking community that there be lots of competition."

Microsoft also has moved into many new fields recently with large investments. It bought a $1 billion stake in cable company Comcast Corp. in June, purchased WebTV Networks Inc. for $425 million in April and even purchased a $150 million nonvoting stake in Apple Computer Co.

Microsoft is positioning itself to control all the gateways to the Internet, from desktop computers to cable connections, said William Randle, vice president for Huntington Bancshares. Microsoft could bundle elements into its operating software to control electronic bill paying and other banking functions, he said.

"What happens if you fail to sign up with Microsoft? …

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