from the Washington post
10/18/98


Inside Microsoft: An Edgy, Driven World
By Elizabeth Corcoran
Washington Post Staff Writer
Sunday, October 18, 1998; Page A01

REDMOND, Wash. - Ted Stefanik felt that he was finally riding a winner.

It was the autumn of 1995, the early days of the Internet gold rush.
Stefanik and about a dozen other hard-core computer programmers were
working 80-hour weeks, racing to execute a simple but big idea: software
that would allow anyone to create a site on the World Wide Web.

They knew that if they did it right, they could make their company, Vermeer
Technologies of Cambridge, Mass., a player overnight. Stefanik had worked
at three other start-up companies without hitting the jackpot.

Now he had a shot with FrontPage, the software he and his colleagues had
bled to create. The release hit big: rave reviews, 275 purchases at $695 a
pop. They were gunning for sales of $35 million in three years.

Just three months later, Vermeer had ceased to exist. Ted Stefanik and
two-thirds of his colleagues were packing up to move cross-country.

Microsoft had made an offer for the company. And joining the software
behemoth, the FrontPage team knew, would be better than competing against it.

Within the high-tech industry, Microsoft is widely feared for the brutal
way it uses its wealth and power. But as Stefanik and his colleagues
settled in, they discovered that Microsoft sees itself -- and acts -- more
as a skittish start-up than as the most dominant corporation in the business.

This wary, driven personality is one of the keys to Microsoft's phenomenal
success over the last 25 years. It also is in the background of the
antitrust lawsuit scheduled to open tomorrow in federal court in Washington.

The lawsuit, filed by the U.S. government and attorneys general from 20
states, alleges that Microsoft has tried to protect its monopoly in
personal computer operating systems through a variety of illegal practices,
notably by trying to crush a competitor in the market for Internet browsing
software. Microsoft Chairman Bill Gates has replied the suit attacks
innovation.

The case will examine Microsoft's dealings with some of the best-known
companies in the computing business -- Netscape Communications Corp., Intel
Corp., America Online Inc. It may write the rules for competition in the
Information Age, much as the case against Standard Oil established the
ground rules for Industrial Age capitalism in 1911. A victory for the
government could allow it to force drastic changes in Microsoft's business
practices.

Those practices are a direct reflection of the company's corporate culture.

By any measure, Microsoft is a giant: It has made the personal computer a
mass-market item and changed the living, working and playing habits of
hundreds of millions of people, much as cheap oil did a century ago.
Microsoft now has 27,000 employees. Its stock is valued at $260 billion.
Its Windows operating system, the software that underlies the basic
operations of a personal computer, is in 90 percent of the world's PCs. The
tiniest changes in Microsoft's flagship products can send shock waves
throughout the industry, sometimes wrecking smaller companies' hopes of
finding their niche.

But inside Microsoft, people think of themselves as working for a
constellation of small companies -- companies that need their commitment
and their adrenaline to survive. They have a blistering optimism about what
computers can do for the world, and an almost evangelical faith in their
own roles in that envisioned future. Like most small companies, Microsoft
is driven by nervous energy and the paranoid belief that it is always
vulnerable and must press the advantages it has.

This edginess may be traced straight back to Gates -- a CEO who will not
concede that a 90 percent market share amounts to a monopoly. It is one of
Microsoft's defining traits, the primary force in its corporate culture.

To its competitors and critics, Microsoft's combination of edginess and
power is like a teenager with a machine gun.

"If ever there was a case that raises consumer-welfare issues, this would
seem to be it," Sen. Orrin G. Hatch (R-Utah) said in a statement in
Congress last summer. "Microsoft has a 90 percent share of a world market;
there are reasons to think that share will endure; Microsoft has engaged in
restrictive practices; and many of those practices do not appear to have
any efficiency justifications that would benefit consumers rather than the
company. Where you find a dead body, a bloody knife, fingerprints and a
motive, there may have been a crime."

People imbued in the Microsoft culture, however, see the company as a
classically capitalist institution. "The Microsoft value system is work
very hard, be very smart and be very competitive," said Mike Maples, one of
the company's top three executives until he retired in 1995. "People
believe they're doing the right thing, that they're helping the world.
Sales are a simple indicator of success."

Ted Stefanik, a bear of a man who tops six feet, arrived in Redmond with a
grudging respect for the company. He was one of more than 30 Microsoft
employees or ex-employees who agreed to be interviewed for this article,
which was reported from March to August.

"In late 1991, I hated Microsoft with a passion," Stefanik said. Windows
3.1, an early version of its franchise product, "was such a piece of
trash," he said with a purist's disdain. "The problem is, Microsoft doesn't
stop when it comes out with a bad product. Microsoft focuses."

In the Microsoft universe, FrontPage is a tiny but rising star. It is not
involved in the antitrust litigation. Yet its short history, from
acquisition to development to market dominance, offers a look at how
Microsoft's corporate culture works and how Microsoft competes.


Vying for Vermeer

In 1995, Chris Peters was the only senior executive at Microsoft who had
built his own Web site. It was hard work. Peters, one of Microsoft's first
100 employees, had started as a programmer and risen to a vice presidency,
from which he'd run various Microsoft businesses. He was only 37 and still
dressed like a long-haired college undergraduate.

He was toying with the idea that Microsoft should create a tool to help
people build Web sites when Vermeer released FrontPage. The software,
Peters said, "was way ahead of me." It "was better than perfect. It was
very much designed for the common person." Soon he was on the phone to
Vermeer's founders, Charles Ferguson and Randy Forgaard, in Cambridge.

Marc Andreessen had beaten him by one day. The co-founder of Netscape, whom
Time magazine would put on its cover as the man who was bringing the Web to
the masses, had told Vermeer that he was interested in its product.

Both companies started negotiations with Vermeer, but in the end, it was
Microsoft that clinched its deal. Peters, who wore sneakers and liked to
swap stories about programming, had offered Vermeer a few compelling
advantages.

One, oddly, was that Microsoft was seriously lagging behind Netscape in
building Internet-related software. The Vermeer team worried that their
work might get swallowed up by Netscape's. Microsoft would be virgin
territory.

Another advantage was a pledge from Peters that he would guide them through
the Microsoft bureaucracy. Little would change for them, Peters predicted.
"Today," he told them, "you go to work, press the elevator button and go
into a crummy office" squeezed between a physical therapist and other
non-techies. Microsoft's offices were nicer, but more to the point,
everyone around them would be writing software, working on ideas that they
could borrow. "There's just more stuff to steal," he cracked.

Money played a role, too. Netscape and Microsoft were both offering to pay
in stock, and Vermeer's founders ultimately bet that Microsoft's stock
would appreciate more.

The deal closed in January 1996. Microsoft paid handsomely for Vermeer --
with stock worth an estimated $130 million at the time of the deal. Most of
the start-up's three dozen employees would be millionaires if they stayed
with Microsoft for at least two years.

The Sunday night after the deal closed, Vermeer sent Ted Stefanik out to
Microsoft, like a space probe to a new planet.


A Campus Community

The place where Stefanik landed is only a 20-minute drive east of Seattle,
but it is a community unto itself. Microsoft's 260-acre campus in the
shadow of the Cascades features both handsomely kept lawns and construction
cranes. (One insider's rule: As long as construction crews are building,
keep buying Microsoft stock.) Many of the three dozen buildings are
X-shaped, the better to provide window offices to valued employees. Modern
art dominates the office decor. Outside Building 16, there's a courtyard
paved in flagstones engraved with the name and release date of 340
Microsoft products. Many more flagstones are still blank.

It was in Building 16 that Stefanik set up FrontPage on a computer and
began to discover some of the comforts of his new home. Programmers are the
first citizens in the Microsoft kingdom, and they are treated accordingly.
Did he need more computing power? Someone would deliver it. Did he need any
particular office gear? A coffeepot? As more of his FrontPage colleagues
arrived in the ensuing weeks, the team was assigned an "admin," a energetic
woman whose job was to eliminate hassles and solve problems, so that the
programmers would be free to do one thing: write software.

Plunging into Microsoft, the FrontPage team found that they were relatively
old hands on their new ranch. Stefanik, for instance, was 36. The average
age at Microsoft in fiscal 1996 was 33.8 years; it has inched up to 34.4
today. But the FrontPagers' relative maturity did not stop them from using
the ping-pong table in their lobby or importing the Vermeer print from
their Cambridge offices, an emblem of their outsider origins.

The Vermeer team knew that as Microsoft's fleet of programmers has grown
older, it has also grown richer. The corporate uniform exemplified by Chris
Peters's jeans and T-shirts belies a breathtaking affluence.

Microsoft watchers estimate that the company has created 5,000 millionaires
and three billionaires (Gates; his co-founder Paul Allen, who serves on the
board of directors; and Steven A. Ballmer, the company's president). Many
have used the money to buy exotic cars and baronial houses, not to mention
some totally excellent electronics.

That much money has an interesting repercussion: It bonds the employees to
Microsoft -- and to one another. It's hard to criticize the company that
made you richer than anyone in the history of your family, and it's easier
to swap stories about the cars and the houses and the electronics with
other people who have them.

By virtue of its location and wealth, Microsoft is somewhat isolated from
the rest of the industry. For many people, particularly recent college
graduates, joining the company is an immersion experience. Many of them
grew up as nerds, their intelligence either ridiculed or ignored; at
Microsoft they're surrounded by people just like them. "It's hard to be a
social misfit in Microsoft, because we're filled with social misfits," one
manager quipped.

What's more, the company keeps celebrating their intelligence. They're
hired because they're the "smartest"; they advance because they work
"smart," which in the Microsoft lexicon means not just intelligent, but
also creative, intuitive, disciplined, market-savvy and persistent.

The smartest man on campus is Gates -- a towering but intimate deity, one
often invoked in discussions or referenced in the interoffice e-mail that
is the Microsoft nervous system.

"No one thinks that they're smarter than Bill," Peters said. "Nobody thinks
they could run [Microsoft] better than Bill. It creates order when you
don't think that your boss is an idiot."

What also creates order is Microsoft's sense of mission. "Bill and
Microsoft believe that any problem can be solved by smart people who are
focused and hard-working," Maples said. "People don't mind working 15-hour
days. The rest of your life doesn't count for much. If you're one of them,
it's perfect." Though Maples no longer works full time at Microsoft, he
remains an "ambassador" for the company and counselor to its top executives.

"Money isn't the motivator," said Julie Larson, 36, a FrontPage team
manager who worked her way through school, earning a master's degree in
software engineering. "Instead, it's the desire to succeed, to succeed with
your peers, to do things that change people's lives."

That, plus the gnawing fear that you may not be worthy. "Microsoft plays on
your insecurities," Larson said. "How good are you? You're competing with
others in the industry, competing internally with others. There's a lot of
competition."

Programmers loom large in this competition. It is their skill in "coding,"
in turning strings of numbers into life-altering software, that is
Microsoft's lifeblood. "Programmers are like artists," Peters said. "When
you're writing code you're not thinking in English. . . . It's like a play
-- there's motion, things work, it's not static. You know where you're
going. . . . Things just flow."

Programmers don't waste much time thinking about a program's possible bugs.
They're more prone to envisioning what the program should do, rather than
what it actually does.

On the other hand, they know that the art of writing software involves
making compromises. At Microsoft, particularly, there is a sense of urgency
about getting the product out to customers. You gotta ship the software.
Getting the product into the user's hand is considered an integral part of
the program, equal in importance to any given feature in the software.
"Shipping," in the words of Chris Peters, "is a feature."

The FrontPage team members discovered this from the start: They faced a
tight deadline to produce the next version of their software -- and the
version after that. "On Day One, you're already overwhelmed with work,"
Stefanik said. "You're behind, with a huge list of stuff you've got to get
done. Training comes from making mistakes."

You gotta ship the software. Shipping is a feature.

In April 1996, just three weeks after the full Vermeer group officially
arrived in Redmond, they shipped FrontPage 1.1, with the Microsoft
imprimatur.

And within two months, FrontPage sold 75,000 copies. Two months later, its
sales had doubled. According to the marketing research firm PC Data, that
was more than 30 percent of the retail market for Web publishing tools.


Microsoft's Advantages

In launching FrontPage, Microsoft enjoyed many big-company advantages.

There was the power of its brand name -- an asset Microsoft spends about
$120 million a year to promote. Customers might be wary of investing in
software produced by a start-up, no matter how cool it might be, because
the start-up could go out of business overnight. No one has that concern
about Microsoft.

There was Microsoft's distribution network. Vermeer's customers had to dial
an 800 number to order FrontPage. Now, they could find it at hundreds of
retailers.

There was Microsoft's reach. As FrontPage 1.1 was in development, the
company worked closely with major Internet service providers to ensure that
they could easily "host," or support on the Internet, Web sites built with
the software.

There was Microsoft's pricing. Vermeer had offered FrontPage at $695;
Microsoft sold it for $149 -- and offered rebates to people already using
certain Microsoft products.

Software pricing is an arcane science, or maybe an occult practice:
Manufacturing is so simple -- copy program onto disk; package disk;
shrink-wrap and ship -- that manufacturing costs hardly enter the equation.
(Even easier: Let customers fetch the software from the Web.) Software
companies big and small simply try to pinpoint the maximum that the likely
audience will pay. And oddly enough, start-up companies often charge more
for their software, on the theory that people who take the risk of buying a
start-up's software must really want it.

Vermeer had been selling FrontPage to sophisticated users. Microsoft, with
its pricing, put FrontPage within easy reach of a much bigger segment of
the market -- and it was a growing market.

Microsoft's competitors watched with awe and trepidation. Their sales were
increasing, too, but not at that pace.

>From Microsoft's vantage, the competition was intensifying. Adobe Systems
Inc., a leading maker of desktop publishing software, was a player.
Netscape was working on Web tools. And start-ups were also diving in,
including NetObjects, a company based in Redwood City, Calif., that would
emerge as a player in the market for Web tools (and is now half-owned by
International Business Machines Corp.).

Spurred by its sense of the competition -- and by the opportunity it saw in
the Web -- Microsoft pushed the FrontPage team to churn out new versions.

In fall 1996 -- just six months after the release of FrontPage 1.1 -- the
team pushed out FrontPage97 in six languages. The feat demanded 80-hour
workweeks. By spring 1997, PC Data reported that FrontPage commanded about
half the market for Web publishing software.

In fall 1997, Microsoft rolled out FrontPage98, again in six languages. The
following February, FrontPage could claim 1.5 million users around the
world, and 64 percent of the overall retail market for Web tools. The
software had also accumulated 40 awards for excellence from industry trade
groups.

Last spring, just as the FrontPage team was limbering up to produce
FrontPage 2000, Marketing Manager Pat Kirtland, an energetic 32-year-old,
called a meeting to rally his teammates. "There's nowhere else to go but
down!" he said.

Around the same time, Microsoft executives were mulling over a strategic
question -- whether to marry FrontPage with one of Microsoft's core
products, its Office suite. Office is a package that combines five of
Microsoft's best-selling products -- including word processing, spreadsheet
and e-mail software -- so that they work smoothly together.

At that point, FrontPage had 2 million users. Office had 75 million.


Changing the Product

The FrontPage developers, however, were focused on their product. Whatever
its reputation in the outside world, Microsoft's approach to product design
can be humbling for its engineers.

A little after 11 on a morning in mid-March, three FrontPagers were
slouched in Microsoft's standardissue red-covered chairs in a windowless
conference room, listening to Richard Jacques, who runs "usability tests"
in which Microsoft invites consumers to try out software in a suite of
rooms with one-way windows and loads of recording devices.

"Everybody tried to drag-and-drop, then right-click," he said in his
British accent. "I was surprised by that." What he meant was that to move a
picture, test subjects tried to use a trick that works in other Microsoft
programs -- but didn't work with FrontPage.

"That's easy to add," said one team member clad in sweat pants, sweat socks
and sandals.

"Well, maybe we need to put this feature somewhere where it's more
discoverable?" Jacques said.

This exchange ignited a 45-minute skirmish over where most users would
expect to find the option for moving a picture. The most respected voice in
the debate belonged to 25-year-old manager Mike Angiulo, who suggested that
the FrontPage team take an example from Microsoft's Excel program. Outside
the conference room, the halls were quiet except for the swishing of
sneakers padding down carpeted corridors.

As the weeks went on, another issue compounded matters: The FrontPage crew
had to wrestle with how other Microsoft products worked. How would
FrontPage have to be changed as it was drawn further into the Microsoft
family?

When FrontPage managers met with some counterparts from the Access team in
mid-April, the gathering had the polite chill of a meeting of in-laws.

Access, a database program, relies on a different core technology from
FrontPage; there were, in Julie Larson's opinion, enough subtle differences
between the two programs to confuse customers who used them both. Neither
group wanted to change its approach, but one ultimately might have to: For
customers, consistency counts.

The issue is complicated by the fact that an Access manager received
"billmail," or a short edict from Gates. It said, "Don't use [a particular
technology] in this anywhere," Angiulo said.

How Access will rejigger its code and what it all means for FrontPage isn't
clear. Top executives "will give us the 10,000-foot view," Angiulo said,
then back off, letting the groups hash out the details. It takes time.

In dozens of meetings over the next few weeks, Larson and Angiulo played
through similar scenarios with other groups. FrontPage already had been
changed so that it looked and worked like other Microsoft products.
Sometimes, FrontPage got a boost by taking advantage of such work -- but
sometimes it didn't.

"Sure it would be easier to get FrontPage out the door . . . if we just
focused on FrontPage," Larson said. "But in the long run, it's better."

After 2 1/2 years within Microsoft, the FrontPage group was still a novice
at working with other groups. To Peters, FrontPage seemed to have much of
the old independence that all Microsoft groups once enjoyed. Customers may
appreciate such tight integration, he said, but "it adds complexity."

And if Microsoft were to make some dramatic marketing decision -- say, to
package FrontPage as part of Office -- it would add layers of complexity
the FrontPage team hadn't had time to imagine.


Concerns About Packaging

Office is a powerhouse, almost as integral to Microsoft as Windows. Last
year it brought in even more revenue than Windows -- about 40 percent of
Microsoft's $14.48 billion in revenue, according to analysts at investment
firm BT Alex. Brown Inc.

Packaging FrontPage with Office would give Microsoft advantages beyond
expanding FrontPage's potential market to 75 million users.

For Microsoft's competitors, a more worrisome prospect also loomed: that
Office could become a "platform" -- software so dominant in its field that
every other programmer must take it into account when writing new software.
(Certainly, Windows is a platform.) If you control the platform, you have
enormous influence over all the software written for it, whether your
company writes it or not, because you control all the interfaces between
the platform and other programs.

Microsoft spends a great deal of time and energy informing other software
companies about those interfaces, but its competitors contend that
Microsoft's control of them still gives it an edge.

Concerns about controlling platforms are basic to the antitrust suit
against Microsoft. That case focuses on Internet browsing technology, which
some experts believe could become a platform. What triggered the suit was
Microsoft's decision to "bundle" its browser software into Windows -- to
weave its browser deeply into its operating system. In effect, Microsoft
told computer makers that they had to feature its (effectively free)
browser on their machines.

What the government contends is that from this position, Microsoft has
undue influence in the development -- or lack thereof -- of browser
technology. Microsoft contends that it is creating better products when it
binds new functions into the operating system, and many consumers applaud
those efforts.

The FrontPage scenario that was under consideration early last summer was
fundamentally different: Instead of bundling FrontPage into Office,
Microsoft would merely offer a "premium" version of Office that included
FrontPage. Its customers would still have a choice -- and in any event,
Microsoft wouldn't be including FrontPage for free.

This scenario did little to allay competitors' anxieties about platforms,
but from the vantage of Jon DeVaan, vice president for the Microsoft
division that includes both Office and FrontPage, the questions boiled down
to two.

"Is there a set of customers who would like the convenience" of such a
combination? DeVaan wondered. If consumers were convinced that creating and
managing Web sites would become as common to office work as using a
spreadsheet, then the combination would make sense, he said.

"And can we do it without messing up the FrontPage business model?" DeVaan
wanted to know. That business model had new versions of FrontPage coming
out every nine months or so -- a pace meant to keep up with the fast pace
of change of the Web. Office, on the other hand, was on a cycle about twice
as long -- largely because its base of corporate customers didn't want to
buy new software more often than that.

But there were so many customers. Office remained a tempting thought.


Marketing Efforts

Through the spring, Pat Kirtland ran the FrontPage marketing effort as if
he were spending his own money.

For big products, Microsoft seems to have bottomless marketing coffers. The
rollout of Windows 95, for instance, featured a song by the Rolling Stones,
a performance by Jay Leno and the Microsoft colors beaming from the Empire
State Building. Office had a fleet of 100 marketers.

FrontPage had to make do with four, although Kirtland could "borrow" a few
people from the Office team as the next release date neared.

"My gut tells me we spend too much on banners," or advertisements on the
Web, he told his team at one meeting. Then he started drilling one of his
staff on the results they were getting from such ads.

Kirtland was demanding quantitative results at every step. What promotional
deals were advancing the FrontPage cause? he asked. One team member had
persuaded the Internet Explorer team, the team developing Microsoft's
answer to Netscape's browser, to offer a FrontPage rebate coupon worth $45.
A joint marketing arrangement with American Express Co. was gelling more
slowly.

Few people outside Microsoft see the arm-wrestling that goes on between
in-house groups. And from the outside, Microsoft has long been harshly
criticized for taking advantage of other companies, including some who
thought they were Microsoft's partners. Mike Maples said the Microsoft
ethic was as simple as the law of the jungle.

Particularly a few years ago, "I didn't try to write 'win-win' contracts,"
Maples said. "I didn't care about [the partners'] interests."

Microsoft executives figured that all they needed to do was look out for
Microsoft's interests -- and the other guy would look after his. "In a
perfect world, everybody negotiates what's good for them," Maples said.

"To Bill [Gates] and Steve [Ballmer], it's a competitive game. It's
Microsoft versus everybody else. You protect your own side. I don't have to
worry about your side. My only job is to get the maximum advantage for the
company."

Even when Microsoft was smaller, negotiations didn't always work out so
neatly. "It was a culture where we never did anything illegal or immoral,"
Maples said. "There were instances when a guy wanted to make a deal so bad,
he signed away rights to his products," thinking he would get back the
value through joint marketing with Microsoft. "They thought the [Microsoft]
magic would rub off." In some cases, they found themselves almost out of
business.

About four years ago, Maples said, he began pushing Microsoft executives to
think about their partners -- at the least for Microsoft's own good. "I
made [Microsoft executives] list the three good things for the other side"
before approving a deal, he said. "I was trying to make [Microsoft] aware
that if the other guy didn't profit, it wouldn't be a good, long-term
partnership." His approach to partnerships has taken hold.

After FrontPage's marketing team ran through the deals it had worked out
with partners, Kirtland asked them to quantify the benefits of such
arrangements in the future.

"We should build into [Internet service provider] contracts that they have
to report back to us quarterly" on new business that FrontPage helps
generate for them, Kirtland said. How valuable is it to work closely with a
handful of ISPs? Which ones have the most FrontPage customers? Perhaps, he
added, Microsoft wasn't adequately leveraging that particular asset.


Becoming a Target

In early July, a few weeks after the antitrust suit had been filed, the
FrontPage team suffered one of the rude shocks that a lot of big companies
must endure. A small Canadian Internet service provider named MDI Internet
went public with its complaint that FrontPage seemed to be trying to coerce
users into choosing Microsoft-friendly ISPs.

The offending message popped up when some users tried to publish their
FrontPage-based Web site on MDI Internet. It read: ". . . try selecting
[other Internet provider] from the list of Internet service providers."

In effect, the message was just telling the user to try again, using a
generic link designed to accommodate a broad array of ISPs. But to MDI, it
seemed that the message was telling users to subscribe to a new provider --
one, presumably, moving in lockstep with Microsoft.

MDI's complaint provoked a flurry of headlines in the trade press -- and an
easy target for Microsoft critics. "What better way to force Internet
service providers to adopt Microsoft proprietary technology than through
error messages on the desktop?" Ken Wasch, president of the Software
Publishers Association, told reporters.

To Harley Rosnow, a manager with the FrontPage team, Microsoft was getting
hammered for something it didn't do -- something, in fact, it had gone out
of its way not to do. After the stories broke, "there was a lot of
emotion," Rosnow said. "You say, 'Oh my God, how did that happen?' "

The programmers quickly started rewording the message for future releases
of FrontPage, but the experience jarred Rosnow. "It destroys you," he said
wearily. "My brother calls me up and says, 'Was that you?' My dad gets
worried."

To Julie Larson, the episode seemed like another bewildering sniper attack
on Microsoft, only now it was worse because the Justice Department was on
the company's case. "It kind of makes you unhappy when you're working on
something so hard and people who normally don't have anything to do with
the computer industry, like my mom, ask questions about the DOJ," she said.
"DOJ wasn't even in her vocabulary before."


The Rush to Ship

As July passed, the FrontPage team scrambled to get a prototype version of
FrontPage 2000 ready to share with the hundred or so people who would help
test it. First Larson authorized dinners on Wednesday nights for "bug
bashes," where programmers would try to debug their code. Then she added
bagels in the morning, dinner every night and even a few lunches on weekends.

And then, in August, Microsoft made a low-key announcement that a premium
version of Office 2000, due out next year, would include FrontPage 2000.
Microsoft resolved the discrepancy between the two programs' development
cycles by planning to include alternating versions of FrontPage with Office.

The FrontPage team, already laboring under a tight deadline, knuckled down
to smooth out differences between its software and Office. Because you
gotta ship the software, and FrontPage 2000 was set for release in the
first quarter of 1999.

Once FrontPage 2000 ships, some members of the team might get a handsome
round of stock options. And everyone will get a little gold sticker to add
to the Lucite plaques they received when FrontPage 1.1 went out the door.

On the plaque is an inscription from Bill Gates: "Every time a product
ships, it takes us one step closer to the vision: a computer on every desk
and in every home. Thanks for the lasting contribution you have made to
Microsoft history."

Microsoft in Profile


Business: The world's number one software company.

Based: Redmond, Wash.

Founded: 1975 by Bill Gates (now chairman and chief executive) and Paul Allen.

Number of employees: 27,000

1997 sales: $14.5 billion (27.5 percent increase since 1996)

1997 profit: $4.5 billion (30 percent increase since 1996)

Market capitalization: $261 billion


FrontPage in Profile

What it is: Microsoft's software for creating and managing
professional-quality Web sites or intranet sites.

Initially released:

October 1995 (by Vermeer)

Bought by Microsoft: January 1996 for stock worth an estimated $130 million

Number of users:

About 2 million

Price: $149 ($40 mail-in rebate for Microsoft Office customers)

Number of Microsoft employees assigned to FrontPage: About 60

Release date for FrontPage 2000: First quarter of 1999



SOURCES: Microsoft, Hoover's, Bloomberg News


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