This is on the front page of today's Los Angeles Times
Friday, April 10, 1998
Microsoft Plans Stealth Media Blitz
Publicity: Campaign to conjure image of public support called just a
proposal by firm.
By GREG MILLER, LESLIE HELM, Times Staff Writers
S tung by the public relations fallout from antitrust investigations
of its business practices, Microsoft Corp. has secretly been planning
a massive media campaign designed to influence state investigators by
creating the appearance of a groundswell of public support for the
company.
The elaborate plan, outlined in confidential documents obtained
by The Times, hinges on a number of unusual--and some say
unethical--tactics, including the planting of articles, letters to the
editor and opinion pieces to be commissioned by Microsoft's top media
handlers but presented by local firms as spontaneous testimonials.
The stated targets of the campaign are attorneys general and
politicians in California and 11 other states that may be considering
antitrust action against Microsoft, which is already battling a suit
filed last year by the Department of Justice.
When asked about the campaign Thursday afternoon, Microsoft
spokesman Greg Shaw initially said he was unaware of such a plan.
"I'm not sure what it is," said Shaw, whose name appears
throughout confidential documents--some of them labeled as draft
copies--that are part of a large binder of materials distributed under
Microsoft's name to the campaign's regional coordinators.
Later in the day, Shaw amended his remarks, acknowledging the
plan exists but saying it is merely a proposal and "not something we
are moving on." He acknowledged attending a meeting in Chicago on
Monday during which the plan was scheduled to be discussed in detail.
Shaw's characterization of the campaign was also contradicted by
knowledgeable sources who said it was presented to regional PR firms
as "a done deal" and that the firms were expected to come to the
Chicago meeting with detailed plans for their states.
Even if Microsoft has now decided to abort the plan, the
documents and the activities they describe reveal a great deal about
how serious the company considers its plight and the measures it is
willing to consider to protect its dominance of the software industry.
The entire effort is "geared to generating leveragable tools for
the company's state-based lobbyists," positive press clippings that
"state political consultants can use to bolster the case," according
to documents.
In fact, the Redmond, Wash.-based company has taken the unusual
step of arranging for one of its top media agencies to recruit a dozen
public relations firms known for their strong political connections in
targeted states.
A printed list of regional coordinators includes Jeff Eller,
former director of media affairs for President Clinton, a firm in
Michigan run by the former head of the state's Democratic Party and an
Illinois company that has played a central role in gubernatorial
campaigns.
Other states targeted are Arizona, Florida, New York,
Pennsylvania, North Carolina, Ohio, Texas, Virginia and Wisconsin.
When told of the planned campaign, state officials said such an
effort would succeed only in aggravating investigators.
"I've been battling this type of PR gimmickry for a long time,
and I can smell it 40 yards away," said Michigan Atty. Gen. Frank J.
Kelley. "It represents arrogance, and it's personally demeaning to me.
[Microsoft Chairman] Bill Gates would have been better off if he or
one of his representatives had picked up the phone and called me."
Even in the modern world of corporate spin control, the proposed
plan is unusual in its scope, tactics and targets.
The campaign is being choreographed by Edelman Public Relations,
a giant PR firm with close ties to Microsoft. But sources said it is
designed to appear not as a major thrust by Microsoft or Edelman, but
as an eruption of grass-roots support.
"They're trying to plant stories about how wonderful it is to do
business with Microsoft," one source said. "I just find it outright
wrong that Microsoft and Edelman are trying to hide their involvement
in this."
According to the documents, local PR agencies are scheduled to
begin submitting opinion pieces to the media next week, followed in
the coming months by waves of other materials, including glowing
accounts from Microsoft partners, consumer surveys and studies
designed to show the company's impact on each region's economy.
Letters to the editor are to be solicited from regional business
leaders. Opinion pieces are to be written by freelance writers and
perhaps a "national economist," according to one document. The
writers' fees would be "billed to Microsoft as an out-of-pocket
expense."
The campaign, which could cost millions of dollars, is designed
to generate positive stories at critical junctures in Microsoft's
legal battles. One round of stories, a document says, "will coincide
with April 21 oral arguments before U.S. Circuit Court of Appeals on
Microsoft motion to disqualify Lawrence Lessig as special master in
Microsoft antitrust case."
Microsoft is not the only company working behind the scenes to
influence these antitrust matters. Rivals, including Netscape
Communications Corp., have cooperated extensively with investigators,
supplying documents and technology demonstrations designed to show
that Microsoft is abusing its monopoly position.
The various investigations center on Microsoft's attempts to
extend its monopoly in computer operating systems to Internet-browsing
software. The Justice Department accuses Microsoft of illegally trying
to bundle the two products, while Microsoft claims it has the right to
integrate the browser into the operating system as a new feature.
Sources close to Microsoft said the proposed campaign is an
outgrowth of the company's growing fears that it is being outgunned in
the media by rivals and perhaps even hostile state officials.
One stated goal of the campaign is to counter "negative, reactive
coverage that is driven by state attorneys general."
Media experts said many elements of the campaign seem clumsy,
adding to a perception that for all of Microsoft's prowess in
software, the company has little skill with public relations.
"Companies like Microsoft are run by engineering types who don't
understand the public," said Ian Mitroff, director of the USC Center
for Crisis Management, who added that base attempts to manipulate the
media and shape public opinion often fail.
"It's cynical," Mitroff said. "It assumes we're dumb."
This wouldn't be Microsoft's first public relations misstep. The
company was forced to try to soften its image in January after
suggesting Department of Justice lawyers were incompetent. Microsoft
also appeared to be thumbing its nose at the court by insisting it
couldn't carry out an order to separate its browser from its Windows
operating system.
As part of a subsequent publicity tour, Gates was unusually
candid about his family life and stressed Microsoft's contributions to
schools in interviews with Barbara Walters and other journalists.
On Thursday, the company began placing ads in a handful of
newspapers around the country, stating its case against regulators.
"At Microsoft," the ads read, "the freedom to innovate for our
customers is more than a goal, it is a principle worth standing up
for."
The proposed multistate campaign represents another component of
this broad media blitz.
The campaign appears to have been crafted by Rory Davenport,
Edelman's director of "grass-roots and political programs" in
Washington. Davenport is listed as an author of confidential
documents, but in a brief telephone interview Thursday, he would say
only that "there is no agreement for a campaign like that."
Another Edelman official whose name appears on the memos, Neal
Flieger, also responded to questions about the campaign by saying,
"I'm not prepared to amplify on that at all."
The Chicago meeting, attended by many, if not all, of the
regional coordinators, focused on the campaign. An agenda for the
meeting indicates that Shaw and Flieger were to be key speakers and
refers to the "Microsoft multistate plan."
Both men acknowledged they were in Chicago on Monday, although
Flieger said it was merely to visit family. Other participants said
the meeting went forward as scheduled and that regional coordinators
flew in from around the country.
Shaw said elements of the plan may ultimately be pursued, but the
company has no intention of targeting attorneys general or states.
A number of state investigators, who are reportedly considering
filing within a month a suit against Microsoft for anti-competitive
practices, said they are prepared anyway.
"When it comes to knowledge of computer technology, I take my hat
off to Mr. Gates," said one attorney general. "But if he wants to
enter the field of political intrigue, I say welcome to my world, Mr.
Gates, I'm ready to do battle."
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