MAIL-IT REQUESTED: DECEMBER 14, 1999                        1002JA

        CLIENT: MCY015
       LIBRARY: NEWS
          FILE: CURNWS

YOUR SEARCH REQUEST AT THE TIME THIS MAIL-IT WAS REQUESTED:
 (STEVE PRE/2 BALLMER) AND ATL3(BODY(BALLMER)) AND DATE AFT 6/99

NUMBER OF STORIES FOUND WITH YOUR REQUEST THROUGH:
      LEVEL   1...     327

LEVEL    1 PRINTED

THE SELECTED  STORY NUMBERS:
1,8,14,16,35,65,77,174,279,285

DISPLAY FORMAT: FULL

SEND TO: CROWLEY, SHEILA
         MCKINSEY & CO., INC.
         555 CALIFORNIA ST STE 4800
         SAN FRANCISCO CALIFORNIA 94104-1713

**********************************03209**********************************

Copyright 1999 CMP Media Inc.    
Computer Reseller News

December 13, 1999

LENGTH: 523 words  

HEADLINE: Rumors, Truth & Innuendo -- ShadowRam  

BODY: 

   Steve Ballmer shocked the world last week. While the Microsoft president was speaking at a Microsoft-Ericsson press conference in Stockholm, Sweden, Ballmer actually agreed with something Oracle Chief Larry Ellison said. Ellison had stated the United States is dead last in the world in adopting wireless technology. "I think he's right," Ballmer said. "We don't agree on much, but on that, we would agree." 

     Another bulletin from Scandinavia: Nokia, the world's biggest mobile-phone maker, leapfrogged oil giant BP Amoco last week to become Europe's biggest company in terms of market capitalization. Not bad for a company founded in 1865 by Finnish mining engineer Fredrik Idestam as a paper-making, wood-pulp mill in southern Finland. Idestam named the company he fathered after a small town. Two years ago, Nokia became Europe's 33rd biggest publicly listed company by market cap; last year it climbed to No. 17.  

   Despite denials and "no comments," I hear Compaq and Inacom talked seriously about a deal involving Inacom's distribution business. Apparently an offer was on the table, but the two couldn't agree on a price.  

   Cisco is sending editors bubbling brook fountains for the holidays. All the better to soothe the savage writer. The water's nice, but I think Microsoft has a better handle on what makes the press tick. A few years back, the software giant sent scribes coffee.  

   WebEx, the Web meeting company, last week said it secured $25 million in financing, made up of investments from international venture capital firms including New Enterprise Associates, Walden International Group, Summit Partners Accelerator Fund and International Capital Partners, as well as major corporations like Deutsche Telekom.  

   So what is WebEx going to do with all that cash? The company promptly signed RuPaul, described, in the company's words, as "the world's most famous drag queen." I guess that gives new meaning to the word "spokesperson."  

   Sun leader Scott McNealy did his usual "Top 10" routine during the Java show in New York last week. While Microsoft was the punch line for most of the "Off, Off-Broadway Shows," he couldn't resist a shot at Hewlett-Packard and its chief, Carly Fiorina: "Death of a Salesman: Carly's New Strategy." In keeping with the DOJ vs. Microsoft theme, other McNealy show titles included " Les Miserables: Microsoft's Legal Team," and "The Nutcracker, with a guest appearance by Janet Reno."  

   I wish the Big Five accounting firms would figure out how their consulting and auditing businesses will work together. My vote is for all of them to spin off the units. As it stands now, to list the title of any executive who works for the consulting arm, it takes an essay complete with footnotes to describe the executive's position and the nuances of the person's relationship to the parent firm. I know some of you think it's just me who's slow in figuring this out. But even people who work for the Big Five need crib sheets to get their titles straight.  

   Keep me straight by calling in your tips to (800) 521-DIME or E-mailing me at shadowram£cmp.com.  

   Copyright 1999 CMP Media Inc.  

LANGUAGE: ENGLISH  

LOAD-DATE: December 11, 1999 

Copyright 1999 Gannett Company, Inc.    
USA TODAY

December 8, 1999, Wednesday,  FINAL EDITION

SECTION: MONEY; 

 Pg. 3B  

LENGTH: 965 words  

HEADLINE: Life without Bill Gates and Microsoft not so wonderful  

BYLINE: Kevin Maney  

BODY: 

   And now, back to that holiday classic It's A Gatesian Life.
     So far, we've watched the film's hero, Bill Gates, build a successful
 and happy life and business until disaster strikes in the form
 of an antitrust trial. Gates blames himself as the situation spins
 out of control.
     We find him and his guardian angel, Clarence, huddled in the toll
 office on a bridge, trying to get warm. Gates had planned to commit
 suicide, but Clarence saved him by jumping in first. Gates dove
 in and rescued Clarence. It's snowing, and it's nearly Christmas.
     In this scene, Gates says he wishes he'd never been born. Clarence
 grants his wish. They walk into town and come across a place Gates
 has been hundreds of times before. They go in and sit down, but
 the place is almost unrecognizable -- now a hard-drinking bar.
     Gates (to the man behind the counter): Oh, hello,
 Nick. What happened to all the Starbucks signs?
     Nick: What's a Starbucks?
     Gates: Starbucks. You know, Seattle coffee. I'd like a
 double decaf latte with extra foam.
     Nick: Seattle coffee? Foam? Look, mister, we serve hard
 drinks in here for men who want to get drunk fast.
     A man staggers into the bar -- long hair, unkempt, wearing
 ratty tie-dyed clothes.
     Nick: Didn't I tell you never to come around here?
     Gates: Paul! Paul Allen! I'm Bill Gates! Don't you know
 me?
     Allen: No. No!
     Gates: Hey, Nick, isn't this the guy who owns the Seahawks?
    Nick: That bum? Twenty years ago, he left his job in computers
 to become a guitarist for Toto. Hasn't gotten a gig since the
 '80s. (To his bouncers) Show these gentlemen the door!
 (Gates and Clarence get thrown out.)
     Clarence (on the street): See, Bill, you weren't
 there to talk Paul into starting a company with you.
     Gates bolts toward downtown Seattle. But he passes a sign that
 says, "Welcome to Appleville." He passes strip joints and closed
 storefronts. The town is a wreck. He stops at a sleazy nightclub
 where police are tackling a man.
     Gates: Hey! This used to be a satellite office for Intel.
 Where'd Intel move?
     Cop: Intel went outta business years ago.
     Clarence (suddenly at Gates' side): You see, IBM
 and other companies started making PCs, but they all had competing
 operating systems, and they self-destructed. Apple won. It has
 90% of the PC market, a Mac costs $5,000, and computers have only
 gotten into 20% of homes. Steve Jobs is the richest person in
 the world, and his main philanthropic thrust is to support minimalist
 modern art. Motorola is the biggest chipmaker. Intel had to stick
 to DRAM chips and got crushed by the Japanese.
     Gates (spotting the man being hauled off by police):
 Hey, I know him. That's Michael Dell!
     Clarence: No, it's not. Michael Dell owns an upscale stereo
 store in Austin.
     Gates hails a cab and demands to go to Microsoft. The driver
 has no idea what Gates is talking about. Gates gives an address.
 When they arrive, it's a broken-down district of empty offices.
 Gates gets out and stumbles around.
     He spots a light on in one office and peers in the window.
 Programmers sit writing code. They are dressed in dark turtlenecks
 and designer slacks. New Age music plays as some employees take
 a yoga break.
     Clarence (again at Gates' side): You weren't there
 to be the beacon for geek culture. They all want to be like Jobs.
     Gates (grabbing Clarence by the lapels): This is
 way too random! What's going on? What happened to my business
 partner, Steve Ballmer?
     Clarence: Well, since there was no Microsoft, he stayed
 at Procter & Gamble. But he had all that energy and drive,
 and when they kept making him market Pampers, his head just exploded.
 Pop!
    Gates (yelling): Where's Melinda? Tell me where
 my wife is! You have to tell me!
     Clarence: She never married. She's CEO of a merged giant
 that dominates the PC software industry. It's called Lotus/WordStar.
     Gates: Oh, no. Anything but that. Clarence, I want to live
 again. Please, God, let me live again!
     Gates falls to his knees, sobbing, head bowed. A police car
 pulls up. A cop gets out.
     Cop: Mr. Gates? You OK?
     Gates: Huh? You know who I am? (He jumps up exuberantly.)
 What do you know about that! Merry Christmas!
     He hugs the cop. Gates runs down the street yelling "Merry
 Christmas" to people, to Intel, to the Microsoft offices. He
 runs past a local Sun Microsystems office and sees CEO Scott McNealy,
 his rival, in the window.
     Gates: Merry Christmas, Scott!
     McNealy: Happy New Year to you -- in court! Go on home,
 they're waiting for you.
     Gates runs into his house. The antitrust judge, Thomas Penfield
 Jackson, is standing there along with a knot of lawyers and several
 reporters.
     Gates: Well, hello, Mr. Judge. I bet you're going to break
 up my company. Isn't it wonderful? Merry Christmas!
     Gates' two kids come down the stairs. He hugs them. His wife
 comes in.
     Melinda: You have no idea what happened. Come on. They're
 on the way.
     A crowd piles in, all smiles and cheer.
     Melinda: They're shareholders of Microsoft, Intel, Dell,
 Compaq and other companies -- millions of people you've helped
 make wealthy.
     Gates: They've come to give me their life savings?
     Melinda: Not exactly. They want to buy more shares of Microsoft.
 They said, "If Bill has to split up Microsoft, count me in to
 buy more shares. The separate pieces are going to go through the
 roof!"
     Ballmer enters. The noise stops. He raises a wine glass.
    Ballmer: A toast -- to my virtual brother, Bill. The richest
 man in town.
     Gates: Well, duh.
     Everyone cheers and sings Auld Lang Syne.
     The end.
      E-mail kmaney£usatoday.com
  GRAPHIC: GRAPHIC, B/W, Jerry Mosemak, USA TODAY  

LANGUAGE: ENGLISH  

LOAD-DATE: December 08, 1999 

Copyright 1999 Time Inc.    
Fortune

December 6, 1999

SECTION: FIRST: MICROBOOSTER; Pg. 51  

LENGTH: 1385 words  

HEADLINE: He Made You Rich. Now Cut The Guy Some Slack  

BYLINE: David Kirkpatrick  

BODY: 

   The word is in: The company that for years has led the boom in stocks and technology--in the entire economy--is not only a monopolist but a threat to consumers. Now the question becomes, Are we crazy here, or what? Is this some form of national neurosis, subverting ourselves at our most successful? Are we going out of our way to burst the very bubble we've ridden so happily and profitably for so long? How can Microsoft have hurt consumers by tying its Windows operating system to a Web browser, the PC software we use most? And how can we say that Microsoft has stifled innovation, as Judge Thomas Penfield Jackson claims? Could we handle any more than we've got now?  

   Managers at Microsoft don't seem to be reveling in any sense of monopolistic impregnability. If anything, they see the Web-ward shift as just one of a series of immense challenges afoot in the technology landscape. During a recent round of interviews at the company's offices in Redmond, Wash., executives weren't talking at all about government intervention. (The conversations took place before Judge Jackson's ruling.) Instead, they were obsessed with the ongoing upheaval in the software industry. The biggest challenge, said President Steve Ballmer, is that "the industry will undergo a transformation over the next several years, in which software increasingly becomes a service rather than a packaged product. The distinction between application and service won't be meaningful." 

     Delivering software in the form of a service means big change for Microsoft--and meant as much even before Judge Jackson's "findings of fact." The Web allows applications to be accessed by a browser and delivered in a Web page, with processing and storage taking place mostly on a high-powered, Net-connected server that can be located anywhere. But this way of doing things makes PC operating systems like Microsoft's increasingly irrelevant. Any device with any operating system that runs a Web browser can be your platform for highly productive computing. Says Jim Moore of GeoPartners Research, an Internet investment company: "Microsoft is threatened by the services boom because it makes the PC less central."  

   Microsoft is plunging into the services fray nonetheless. Executives insist that they have no choice--evidence, they say, that their monopoly doesn't exist. "Software as service" is the mantra heard across the company's campus right now. Microsoft already has one successful software service in its Hotmail free e-mail, now used by 50 million. And only days after the judge issued his finding, the company introduced Microsoft Office Online, a radical break from the way the company has made money up until now. In the past customers had to purchase a single Office license for each user (Office accounted for 33% of company revenue last year, calculates Mary Meeker of Morgan Stanley Dean Witter), but now people can rent the software's capabilities on a monthly basis from service providers, including British Telecom and Qwest. Says Paul Maritz, who oversees Microsoft's relations with software developers: "You can view software-as-a-service as a huge threat to our existing business, because that's not the business model we operate on today. Or you can view it as upside. Frankly, I don't know."  

   That kind of uncertainty would have been hard to find at Microsoft even a few years ago. CEO Bill Gates calls the service trend one of his "key strategic concerns" but, ever the upbeat technomarketer, he sees it ultimately as good news for the company. In an e-mail to FORTUNE, he writes, "Microsoft is in an incredibly strong position to build the best software service business--managing, updating, maintaining, and backing up your platform, network, apps, file sharing, etc; building connected apps that will make knowledge workers more efficient, [and] offering consumer services such as content and calendaring."  

   Microsoft is also furiously trying to accommodate the related movement away from PCs toward a proliferating array of special-purpose, "smart" devices. Craig Mundie, the company's consumer strategist, says soon we will be dealing with six different "computing platform families." He says these families will include the PC; television and audio-visual; telephone; kitchen and laundry; home automation, security, and health; and the car. Some of the company's enemies would like to split it up into separate companies for Windows and applications. But many of these new devices will have but a single function. The operating system and application will be indivisible. Why should Microsoft be prevented from participating in what will probably be the next big phase of computing, a phase some smaller companies are already better prepared for than Microsoft itself? It would be silly and reckless to take a PC-centric approach to regulating Microsoft just as the PC is becoming less and less important. Microsoft's ability to stay on top is by no means assured.  

   It may be that, at one level, Judge Jackson's findings will prove to be a direct boon to consumers. Many in Redmond think that until recently the company didn't show enough sensitivity to what customers really wanted; that Microsoft is thinking this way now is probably a direct consequence of the trial, though nobody there would admit it. Earlier this year Ballmer made a major change in Microsoft's structure, organizing its four divisions not around the products they make but the markets they serve--knowledge workers, IT professionals, software developers, and consumers. There is endless verbiage at the company these days about listening carefully to customers. Says Ballmer: "The only way you get to have a good business is by serving the customer well. Our people understand that. There's no magic    Consumers will pick the products and services that do a good job for them." Writes Gates: "Steve is on a customer-satisfaction jihad."  

   So, on balance, has there been consumer harm? Experts disagree. Gene DeRose, who runs Internet research firm Jupiter Communications, thinks Microsoft pressure has deterred PC companies from offering cutting-edge Internet appliances for consumers. He also thinks consumers were hurt when non-Internet companies hesitated to enter Internet businesses out of fear that Microsoft might try to take a toll on every transaction. But that problem diminished, he says, in the past three years as Microsoft was "rendered less bold and voracious" in reaction to growing government scrutiny. 

   GeoPartners' Moore, on the other hand, is adamant that there has been no overall consumer harm. "The challenge for consumers is having software that's easy to use, easy to integrate, and inexpensive," he says. "Microsoft has done tremendous things integrating the software. It's gotten vastly less expensive over time on a per feature basis. The one place Microsoft hasn't evolved quickly is in ease of use." Jim Allchin, the man who oversees Windows, pleads guilty to this last complaint. He insists that Windows' complexity stems from making it compatible with many different kinds of hardware and applications, but adds, "And along with that compatibility has come, frankly, a core flaw, dealing with robustness and reliability." He frequently gets lessons on how difficult Windows is from his 77-year-old mother: "I'm humbled when she asks, 'Why do I have to go to Start to stop the machine?' And how can I respond to that? It's idiotic." But Allchin says that such idiocies (and there are many in Windows) will soon change. "We make sure people here experience the pain," he says, "so they want this product to get improved." He's almost fanatically upbeat about the fruit of his most recent labors, Windows 2000, the much delayed revision of Windows NT, now due in February.  

   Microsoft's tactics have often been heavy-handed, maybe even on occasion illegal. Chances are, most of the facts are more or less as Judge Jackson suggests. But there may be larger facts he didn't consider. For example, without Microsoft's evangelism, vision, and tenacity, the PC revolution would not have been nearly so rapid. And how could we have had a Web revolution--and all the social and economic benefits thereof--without all those PCs in place? Does it really help consumers to knock down a company like this one?  

GRAPHIC: COLOR PHOTO: FERGUS GREER, Ballmer's making Microsoft nice. Says Gates: "He's on a customer-satisfaction jihad."  

LANGUAGE: ENGLISH  

LOAD-DATE: November 17, 1999 

Copyright 1999 PR Newswire Association, Inc.    
PR Newswire

December 3, 1999, Friday

SECTION: FINANCIAL NEWS  

DISTRIBUTION: TO BUSINESS AND TECHNOLOGY EDITORS  

LENGTH: 1564 words  

HEADLINE: Microsoft Announces Strengthened Executive Management Teams;
 Company Creates Consumer Group  

DATELINE: REDMOND, Wash., Dec. 3  

BODY: 

   Microsoft Corp. President Steve Ballmer today announced a series of company-wide executive promotions and moves designed to strengthen the management teams of each product group and accelerate the company's vision for creating great products and services that can be accessed any time and from any device. 
     Heading the list of promotions, Jim Allchin and Bob Muglia have been promoted to group vice presidents for the Platforms Group and the Business Productivity Group, respectively. 
     Allchin has overall responsibility for the Microsoft(R) Windows(R) family of operating systems, streaming media and all associated marketing. He joined Microsoft in 1990 with the initial charter of driving the company's networking product strategy. Since then he has led the development and marketing efforts for Microsoft's high-end systems software, including Windows 2000. 
     Muglia has overall responsibility for managing the development of Microsoft Office, the Microsoft BackOffice(R) family and software for productivity appliances (e.g., Palm-size PCs, eBooks, Tablets). He joined Microsoft in 1988 and has served in a variety of positions, including senior vice president for Microsoft's former Applications and Tools Group. In that capacity, he was responsible for managing the development of the Microsoft Office and BackOffice suites as well as developer tools. 
     Ballmer also announced that the Consumer and Commerce Group headed by Group Vice President Rick Belluzzo has been renamed and realigned as the Consumer Group. 
     "Today's moves build upon and accelerate the reinvention of Microsoft announced earlier this year by deepening our bench of management talent with strong leadership teams focused on creating the very best products and services -- accessible any time and from any device -- for our customers," Ballmer said. 

"These promotions are a formal affirmation of each one of these individual's dedication and long-term contribution to Microsoft in a leadership capacity. Each and every one of them has consistently demonstrated accountability, the ability to think strategically on a global scale, and is respected by both peers and customers. These are well-deserved promotions that reflect the ever-increasing level of their business responsibilities and capabilities."  

    Consumer Group 
     As part of the realignment, Belluzzo announced the creation of a Consumer Services Division (CSD) within the Consumer Group (CG). The CSD will be headed by David Cole, who has been promoted to senior vice president. Its mission is to provide an intuitive and empowering consumer experience, world-class communication and collaboration services, and high-quality Internet access that consumers need to access the Everyday Web any time, anywhere, and on any device. 
     Cole was previously vice president of Consumer Windows Division. He joined Microsoft in 1986 and has served in a variety of positions, including vice president of the Web Client and Consumer Experience Division, where he was responsible for developing Web client technology in Windows. Before that, he held positions in product support and product development, with key responsibilities related to Windows 3.1 and managing development of Windows 95. 
     Belluzzo also announced that Microsoft's Home and Retail Division, headed by Vice President Robbie Bach will join CG, as will the Consumer Strategy and Partnerships division, headed by Vice President Hank Vigil. The Home and Retail Division will continue to develop leading consumer software and hardware products such as the Microsoft Mouse, the Encarta(R) multimedia encyclopedia, Flight Simulator and Works, and is also responsible for retail sales for all Microsoft's products, including Microsoft Office and Windows. 
     The Consumer Group will consist of seven divisions reporting to Belluzo. The new management team will include Robbie Bach, vice president of the Home and Retail Division; Brad Chase, senior vice president, MSN.com(TM); David Cole, senior vice president, Consumer Services Division; Jon DeVaan, senior vice president, TV Service and Platform Business; Lewis Levin, vice president, TransPoint; Moshe Lichtman, vice president, CG International; and Hank Vigil, vice president of Consumer Strategy and Partnerships.  

    Platforms Group 
     Allchin also announced that the previously separate Consumer Windows Division and Business and Enterprise Division have been combined to form the Windows Division, which will be led by Brian Valentine. Valentine has been promoted to senior vice president. He joined Microsoft in 1987 and served in a variety of positions, including management of Windows 2000 and the Exchange and BackOffice product units. He also worked on Microsoft Mail and Microsoft Exchange Server. Before that, he was an engineering manager in the LAN Manager Group. Vice President Deborah Willingham is now responsible for all Windows marketing and will continue to report to Allchin. 
     Anthony Bay has been promoted to vice president of the Streaming Media Division. He is responsible for Windows Media(TM) technologies, Microsoft's digital media platform business. Windows Media has wide-ranging applications that include Internet audio and video, digital music downloads, and corporate training and communications. Previously, Bay was general manager of Microsoft's Commercial Systems Division, responsible for Site Server and Microsoft Commercial Internet System. He joined Microsoft as part of the MSN management team in 1994.  

    Business Productivity Group 
     Bob Muglia announced the creation of a Small Business Division. This division will allow Microsoft to bring together a cohesive set of electronic-commerce and knowledge worker services specifically designed to meet the needs of small and growing companies. bCentral, a Web-based business portal managed by Satya Nadella, will become a part of the Small Business Division. 
     Muglia also announced the promotions of Steven Sinofsky to senior vice president, Microsoft Office; Paul Gross to senior vice president, Server Applications; and Brian MacDonald, vice president, New Application Technologies. Sinofsky is responsible for the Microsoft Office business, including the Microsoft Office desktop productivity applications and the new Office Online Service. He joined Microsoft in 1989 and has served in a variety of positions, including general manager of Microsoft Office where he oversaw the development of Microsoft Office 2000. Before that, he served in various program management capacities on Microsoft Office and as a software design engineer in development tools. 
     Gross is responsible for the Microsoft Exchange and BackOffice businesses as well newly emerging wireless services including Microsoft ICSA, a wireless e-mail system that became part of Microsoft through the acquisition of Sendit. Gross joined Microsoft in 1996 as vice president of Developer Tools. Before joining Microsoft, he was senior vice president of research and development at Borland International Inc. 
     MacDonald leads a group focused on new application development. He joined Microsoft in 1989 as a development manager for Microsoft Project, which became the industry's leading project management solution. He later started and led the team creating the Microsoft Outlook(R) messaging and collaboration client.  

    Developer Group 
     Developer Group Vice President Paul Maritz announced the promotions of David Vaskevitch to senior vice president for the Developer Group and Paul Flessner to vice president for SQL Server(TM). 
     Vaskevitch drives the developer mission and helped constitute the Developer Group when it was formed earlier this year. He also is responsible for key areas of programming tools and infrastructure and data access. He joined Microsoft in 1986 and served in a variety of positions, including general manager of Enterprise Computing, where he developed the initial vision of ubiquitous servers, highly distributed computing and component-driven development. Previously, he helped found Microsoft Consulting Services (MCS) and served as its chief technologist. 
     Flessner is responsible for the development and engineering of Microsoft's database business and products. He joined Microsoft in 1994. Microsoft SQL Server is a full-featured object-relational database management system scaling from handheld devices through enterprise servers. 
     Founded in 1975, Microsoft is the worldwide leader in software for personal and business computing. The company offers a wide range of products and services designed to empower people through great software -- any time, any place and on any device. 
     NOTE:  Microsoft, Windows, BackOffice, Encarta, MSN.com, Windows Media and Outlook are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries/regions. Other product and company names herein may be trademarks of their respective owners.  

   SOURCE Microsoft Corp.  

    CONTACT: press only, Melissa Havel, 503-443-7000, or melissah£wagged.com, or Rapid Response Team, 503-443-7000, or rrt£wagged.com, both of Waggener Edstrom, for Microsoft Corp.; or Tom Pilla of Microsoft Corp., 425-936-0756, or tpilla£microsoft.com 

    URL: http://www.prnewswire.com  

LANGUAGE: ENGLISH  

LOAD-DATE: December 4, 1999 

Copyright 1999 CMP Media Inc.    
Computer Reseller News

November 15, 1999

LENGTH: 614 words  

HEADLINE: No. 9: The Monopolists? -- The dynamic duo of the PC industry, Steve Ballmer and Craig Barrett, had a rough year as their companies both fought antitrust charges and faced new market forces. But the Wintel platform still maintains its dominance.  

BYLINE: Marcia Savage  

BODY: 

   Each enjoys the lion's share of his market. Together, they are the dynamic duo of the PC industry, known as Wintel.  

   Driving the success of these two giants, Microsoft Corp. and Intel Corp., are two men who tackle their tasks with nearly superhuman energy: Steve Ballmer, Microsoft president, and Craig Barrett, Intel president and chief executive.  

     Ballmer, 43, is renowned for an incredible energy and drive that has garnered him nicknames such as "the General Patton of Software." He is largely credited with creating most of the branding and pricing strategies that have made Microsoft a giant in software.  

   Ballmer's energy is inspiring at company meetings, says Jeff Raikes, Microsoft group vice president of worldwide sales and support. "Prior to the speech, he is like a tiger in a cage, pacing back and forth, thinking at the speed of light," Raikes says. "He runs onto the stage and often out into the audience high-fiving people all along the way. He somehow maintains the energy throughout the speech. . . . Coming out of the session, we're all ready to climb mountains."  

   Barrett, 60, is equally energetic. That energy is evident in his leisure activities as well as his legendary nonstop business schedule. A 22-mile hike through one of Arizona's slot canyons was a red-eye affair, according to a hiking companion, Lattie Coor, president of Arizona State University. Barrett arrived late at night, was up at 4 a.m., hiked until 9 p.m., and then caught the first flight out the next morning, Coor says.  

   Some industry observers say the energy these leaders display is born of paranoia. After all, the market is theirs to lose. "The monopolists can only grow as fast as the market and only lose business to competitors," says Jeffrey Tarter, editor of SoftLetter, a Watertown, Mass.-based newsletter. " It's the classic zero-sum game. Everybody is your enemy, even your allies."  

   And this last year has been rough for both companies as they fought antitrust charges. Intel skirted the scrutiny of a public trial into its business practices. A day before the Federal Trade Commission's case against the company was to go to trial, the FTC and Intel reached a settlement. Microsoft, on the other hand, went through a lengthy, contentious trial as it vigorously fought antitrust charges from the U.S. Department of Justice. 

   Ballmer was absent throughout most of the turmoil and charges of unethical practices. "Steve is not sneaky," Tarter says. "He's certainly about as aggressive as they come in terms of sales and business development. But somehow he's never involved in the dirty business."  

   Both companies were also caught flat-footed by new market forces. Intel scrambled to catch up with the cheap-PC tide as American Micro Devices Inc. snatched market share with low-priced chips. Microsoft faces a new competitor in Linux, which gained surprising strength.  

   And both companies are worrying about network appliances and other developments that threaten the dominance of the Wintel PC. "Microsoft's big problem is appliances," says Kimball Brown, an analyst at Dataquest, San Jose, Calif. "For the set-top box, the Web server, Excel is irrelevant."  

   So where does the Wintel machine stand now?  

   Intel garnered 82 percent of the worldwide microprocessor market and Microsoft claimed 93.5 percent of the operating system market in 1998, according to Dataquest. Intel earned $6.1 billion on $26.3 billion in revenue last year, while Microsoft earned $7.8 billion on sales of $19.75 billion for its fiscal year ended in July.  

   If Ballmer and Barrett are running scared, it's only because they have so much to lose.  

   Copyright 1999 CMP Media Inc.  

LANGUAGE: ENGLISH  

LOAD-DATE: November 13, 1999 

Copyright 1999 Time Inc.    
Fortune

October 25, 1999

SECTION: FEATURES/GATES & BALLMER; Pg. 155  

LENGTH: 3132 words  

HEADLINE: The $100 Billion Friendship;
 In a frank chat with FORTUNE's Brent Schlender, Bill Gates and Steve Ballmer talk about their partnership and how it will shape Microsoft in the 21st century.  

BYLINE: Brent Schlender; Steve Ballmer; Bill Gates  

BODY: 

   You can often learn as much about how business partners work together by simply watching and listening to them as by asking direct questions. Case in point: the following conversation with Bill Gates and Steve Ballmer, perhaps the preeminent buddy act in American business.  

   Although they've been friends since college, the two have different styles: The characteristics these 43-year-olds do share are their commitment to Microsoft, their competitiveness, and their astounding wealth. (Gates' fortune has been bouncing around the $100 billion mark in recent months, while Ballmer, who owns 4.8% of Microsoft, is worth more than $11 billion.)  

   Chairman and CEO Gates, the scion of an elite Seattle family, grew up in a world of country clubs, private schools, and speedboats and summer cottages. Ballmer, Microsoft's president since late last year, is the son of an immigrant father who worked his way up into middle management at Ford Motor. Gates famously dropped out of Harvard; Ballmer stayed on and got his degree. Gates was always a little on the quiet and shy side, while Ballmer, a social animal, can be downright bombastic.  

     Listen to them talk and you begin to see how complementary their skills and personalities are, especially when it comes to running Microsoft. Bill is the infotech industry's consummate business strategist and a pretty fair visionary to boot, while Steve's the real detail guy who knows how to get things done.  

   The give-and-take that follows is the hallmark of two guys who have been competing alongside and against each other for as long as they've been friends. We learn how much Gates has relied on Ballmer to get him out of jams over the years, and we may end up wondering why it took the Microsoft founder nearly 20 years to make his pal president. Reading between the lines, we can also see how the impetus for much of the change at Microsoft doesn't come just from Bill, but from Ballmer too. And now it's not just Bill who's listening to Steve: On Sept. 23, when Ballmer publicly ripped overvalued tech stocks, the Nasdaq index tumbled 108 points, or 3.8%.  

   FORTUNE: You're old friends; how has that friendship evolved over the years? 

   Ballmer: We've known each other 25 years.  

   Gates: Hasn't it been longer than that?  

   Ballmer: No, it was the year Richard Nixon resigned, and this is the 25th anniversary of Nixon's resignation, which happened right at the start of sophomore year at Harvard [fall 1974].  

   Gates: We both were living in Currier House. A lot of people living there were into math and science. I was actually a fairly normal resident in the sense of being hard-core in my subject. Steve was unusual in that he was part of the mainstream campus social activities. We were introduced by this guy, a really nice guy...  

   Ballmer: Jeff Clark.  

   Gates: Exactly. [Laughs.] Steve remembers his name, just like he remembers everybody's name    Anyway, Jeff thought we were both pretty interesting and said we should get to know each other.  

   Ballmer: This must have been in the fall, because I remember that year shutting down your room for Christmas break. You'd gone to Seattle but left your door wide open, and somebody had to lock it.  

   Gates: We got to be good friends, even though we had pretty different views of the world. I was fascinated by what Steve was doing because it was a lot more like how my parents went to college--you know, participating in clubs and activities and knowing people. My whole thing was to sign up for classes and then not show up, because I didn't want to look like I was trying too hard.  

   Steve and I would talk about what to do with our lives. One thing Steve mentioned was that he might like to go into government. We thought the leverage of a smart guy in government would be superhigh.  

   Ballmer: Bill, on the other hand, knew he was going back to Seattle, which I thought was just bizarre, for three reasons: (A) I'd never been there; (B) it was a long way away; and (C) when you go to Harvard, there's a culture that says, "The East Coast and the Power Corridor blah, blah, blah." But Bill always said he loved his family and the Northwest.  

   Gates: One of the galvanizing things for our friendship was when we took a graduate-level economics course together. The teacher was Michael Spence, who more recently headed the Stanford Graduate School of Business. Steve had signed up to do so many social things that he couldn't go to class. And neither of us had taken the prerequisites.  

   There were two ways to get your grade: You could take the two midterm exams and hand in homework, and then the final counts only 30% or 40%; or you could bet it all on the final. Well, like I said, we hadn't even shown up for those other things, so it all rode on the final.  

   Ballmer: We camped out in this conference room at the dorm for four days reviewing the midterm exam questions. 

   Gates: And we couldn't answer them at all. Then we would look at the answer and say, "Yeah, I guess that's obvious."  

   Ballmer: Unlike you, I had actually tried to do the reading.  

   Gates: So anyway, we went to this final. It was an open-book test, so everyone was lugging in all these books and looking up and marking stuff. I went in with two pencils and that's it. When they handed out the test and it was just one page, well, we knew we were golden--because one page meant the test was about theory.  

   Ballmer: It was basically a math test.  

   Gates: There was this question about a refrigerator that had a certain probability of failing, and you had to figure out the value of the refrigerator. That's an integration problem. So there were six questions, including one for extra credit, in this three-hour exam, and halfway through, I'm done. I handed in my paper, and as I left I looked at Steve, implying, Hey, how come you're not done? We got two of the best scores in the class.  

   Ballmer: You got a 98, and I got a 99.  

   So you guys talked about working in government, but did you ever talk about future careers in business?  

   Ballmer: Only after Bill started Microsoft. One night we went to a Howard Johnson's out near where Paul Allen [Microsoft's co-founder with Gates] lived. Those were the early days of Microsoft, and Bill and Paul were going back and forth between Cambridge and Albuquerque. I was on a jihad with you that night because you didn't have a real gal Friday around the Albuquerque office, so you guys had to buy filing cabinets and supplies yourselves. That struck me as being kind of random. You hired an office manager soon after that, if I recall.  

   Gates: Even though Paul and I came up with the idea for Microsoft in the spring of sophomore year, I was still a student. The summer after that, I wrote [the computer language] BASIC for the MITS Altair, and then I missed the first half of junior year while we set up Microsoft in Albuquerque. I came back to Harvard for the spring of junior year while Paul stayed in New Mexico.  

   Ballmer: After that you were gone.  

   Gates: And you went on and graduated and then went to Procter & Gamble. I remember coming back for a dinner during senior year and telling you how somebody from Long Island had offered to buy Microsoft for seven or eight million dollars--I mean, nothing.  

   Ballmer: That wasn't nothing at the time!  

   Gates: No, it was flattering as hell.  

   Ballmer: After that dinner we walked from the Plaza Hotel down to Battery Park and back, talking about business the whole way.  

   Gates: Steve once came by Albuquerque when he was working for P&G. 

   Ballmer: We were test-marketing Cold Snap frozen desserts in Denver and Dallas, so I came by on one of my trips.  

   Gates: The key thing happened after we moved Microsoft back to Seattle. I invited Steve to come visit for a week in 1979, before he started on his MBA at Stanford. Steve came back to visit again the summer after his first year. I had it in my mind that I really needed help running Microsoft and that he was exactly the kind of help I needed.  

   The company had about 30 people then. We had so many customers who wanted our stuff, but we weren't really sure how to hire the right people, how to price our software, and things like that. I had overloaded myself with negotiating deals, taking care of the books, managing, and writing code. I hadn't created a structure. It was wonderful, but it was a bit of a mess.  

   It's a weird thing to try to get someone to drop out of a prestigious business school like Stanford. My line to Steve was: "Do you know anybody who is as good as you are? Do you have a twin you haven't told me about? That's what I need." There was always the fairly clear hint, however, of "Come on, man, help me out. You can get some practical experience and then go back to a FORTUNE 500 company later if you have to, but I need you now."  

   Ballmer: I was trying to decide what to do for the summer after my first year at Stanford, so I went to Los Angeles to talk to Booz-Allen and McKinsey and some others, but I also agreed to go up to Seattle and talk to Bill. I came up on a Friday, and we went out to dinner that night with Bill's parents, during which Bill says, "I'm on a redeye flight at midnight. Can you drop me off at the airport? I have to go on vacation down in the Caribbean, so please forgive me." I dropped Bill off and took his car home for him. Then I needed a ride to the airport the next day, so Paul Allen took me. As it turned out, that was part of the sales pitch, because Paul and I had never spent much time together.  

   Gates: So there I am in the Caribbean, with a bunch of Microsoft people on this boat--the Doo-Wah Doo-Wah--recruiting Steve over the radiophone. We had this notion that, based on success, he'd get between 4% and 10% of the company. But we hadn't settled on a salary. So we had this negotiation of whether to pay him $40,000 or $50,000, and my cohorts, who had all had too many drinks, said, "Hey, you look really uptight. Pay him whatever he wants! Let him take more vacations!" I finally gave in and gave him $56,000, or was it $60,000?  

   Ballmer: I thought it was $40,000. It wasn't $56,000.  

   Gates: I'm pretty sure it was $50,000. So anyway, Steve comes to work, and then a month into it, there gets to be friction between the strong personalities. Some people didn't know what to think of Steve.  

   Ballmer: Some did not like me coming because they had seen my offer letter.  

   Gates: Yeah, somebody left it on the Wang word-processing system, and one of the guys printed it out for everyone in the company to see. Paul and I had tried to be open with everybody, explaining how we would pay everyone very well but Microsoft was a partnership owned by Paul and myself. So when they found out we were sharing ownership with Steve... 

   The key was getting Steve to leave Stanford Business School. Of course, his parents' expectations were not along those lines.  

   Ballmer: My dad never went to college. He was an immigrant and he worked at Ford. There, if you wanted to get ahead in life, you went to business school.  

   Gates: Your first title was assistant to the president. Around Microsoft he was known as the "A to the P." So a month into it, Steve comes to me and says, "We have to hire 40 more people."  

   Ballmer: We only had 30 at this time.  

   Gates: But I had this very conservative view because we'd seen a lot of customers go bankrupt. So I liked a lot of cash in the bank, relative to our payroll needs.  

   Ballmer: Bill had these yellow pieces of paper all over his house that had written on them the amount of cash we had in the bank, contract payments due, and the name and salary of everybody in the company, and you could see how many months of salary he had in the bank. So we had a big row about his conservatism. And Bill says to me, "I didn't have you quit business school to come up here and bankrupt us."  

   Gates: Finally we agreed that we would be really picky about who we hired, so it wouldn't be too easy to hire that many people that quickly. In the end, the growth came faster than we expected, so that donnybrook went away.  

   Ballmer: By 1984 I started running the operating-system platform-development operations. The reason I took over platforms despite not being a programmer was that I was managing the IBM relationship. Those two things--DOS and IBM--were pretty closely coupled.  

   Gates: Yeah, that broke the unspoken rule that everybody you work for at Microsoft should be able to write code better than you did. In the early days, the engineers ruled. That was always a big thing.  

   In the year since Steve was named president, it's been anything but business as usual at Microsoft. There are a lot of new faces and new roles. You're even rewriting the company's mission statement.  

   Gates: The heart of it has to do with inventions that are creating opportunities for us and that the market is demanding. People talk about, to use our terms, the Web lifestyle and the Web workstyle, where the way we define information will be very different.  

   So the company had a real need to step back and make big technological bets that involved reinventing the company and the Windows computing platform. I was getting pretty overloaded by trying to be the intersection point for the product side of the business and the marketing-and-sales side. So I asked Steve to step up.  

   Ballmer: A year ago, two things were true: No. 1, the technology to make the Internet and user-interface innovations happen just wasn't getting enough of Bill's attention. Not that we don't have great technical people. But the whole's got to be greater than the sum of the parts. The only way that works is if there is a chief architect, and Bill was doing it only part-time. No. 2, we've had to tell our people to start looking at our business differently. Either they say, "Everything is like it always has been, and we just try to sell more," or they can be in an even more dangerous mode, when they say, "We've met the new opportunity head-on, we turned the ship around, and we've won."  

   Well, neither is true. We did turn the ship around some, and we should feel good about that; and sure, we've got to sell more of that old stuff. But there really is [claps his hands loudly for emphasis] a new opportunity here. We're not at the end of a process; we're at the beginning of the next phase.  

   Gates: Our success comes from some big technology bets. We made a big bet on the graphical user interface (Windows); we made a big bet on Windows NT; and there will be a new way for developing software applications for the Web that will start with Windows 2000, and that's a big bet too.  

   And what kind of networked, digital device are you going to have in your living room? We're betting it will be something that evolves out of WebTV. People also know we're investing heavily in Microsoft Research, but they haven't seen how that work coalesces into the next generation of software. A big part of my job, then, is to galvanize across product boundaries what these big technology bets are, and to get momentum behind them.  

   Ballmer: We really don't want to have happen here what's happened at other high-tech companies, which is to miss those seminal big bets. Otherwise, we'll be another also-ran. We've got plenty of people who used to work at DEC, and they're happy to remind us DEC's No. 1 problem was not building the right stuff. I can help with a lot of the other problems: Do we have the right people, the right teams, and are we focused in on the money and the accountability? But are we building the right stuff? We've got to have Bill and the rest of the senior technical leadership behind that.  

   Judging from your actions since taking over as president, it seems you foresee problems with execution, marketing, and other traditional business issues.  

   Ballmer: How do you prepare for the fact that our business model is going to change fundamentally over the next five years? That's just the nature of what's going to happen with the Internet. So we ask ourselves, Do we have our people focused the right way to contend with that? Are our people able to see that there are unifying architectural principles in our platform, and are they able to explain those to our customers? Our people are actually pretty customer-focused, but they've got to be able to translate from "Aha!" to actual business benefit.  

   What about the notion that there will be a profusion of platforms and devices on the network--specialized devices that are optimized for particular tasks? Have you accepted the fact that not all of them will need Microsoft software?  

   Gates: Sure, the notion of a platform is changing. It's changing in the sense that you often think now of writing a piece of code that you can "serve up" to a variety of clients--to a phone with simple voice input and output, or to a small-screen hand-held PDA, or to a big screen like a TV without much data storage or processor intelligence, or of course to a PC, which is the ultimate client. 

   The PC is unique because sometimes you might want to take the application off the network and run at least part of it on your own machine. So you'll want a symmetric architecture between what goes on at the server and what goes on at the PC. With that, a salesperson could download part of an application and its data onto his PC and use it anywhere.  

   That's a unique feature of our technology--it empowers the individual. Our competitors who are doing server-based applications are sort of anti-empowerment--they take away that portable computing and move it to the center of the network. We're trying to take advantage of the empowerment that the PC industry has given to users rather than take it away. We also believe our approach is a strong counterpoint to those who use the single-point-of-failure model, where if the server goes down, you can't do anything.  

   Windows is a very different computing platform than we started with. But people can use the same development tools they've always used and run the same code, and they don't have to write all their programs in some religious new language.  

   Ballmer: The thing that makes the Windows computing platform today a little harder to talk about than, say, the DOS of 1985 or Windows of the early '90s is that back then the operating system was a discrete piece of software on a single machine. What we're talking about now is just harder to describe. There's a big opportunity for us to be more crisp in describing this new platform.  

   Gates: Yeah, but one reason it's so hard to describe is that the technology pieces are still falling into place. The part of my job that is probably most important in this era is to make our message clear and get software developers excited. I have to make sure people see us not only for our old success but also for the breathtaking new things that we're taking on.  

GRAPHIC: TWO COLOR PHOTOS: GEORGE LANGE (2)  

LANGUAGE: ENGLISH  

LOAD-DATE: October 6, 1999 

Copyright 1999 CMP Media Inc.    
VARBusiness

October 18, 1999

LENGTH: 540 words  

HEADLINE: BALLMER'S BOLD VISION -- Microsoft Eyes ASP Business  

BYLINE: T.C. Doyle  

BODY: 

   ORLANDO, FLA.-Microsoft Corp., which dominates the world's software industry today, will operate in a much different way in a matter of years, as it transforms its core offering from a product to a service, says Steve Ballmer, president of the Redmond, Wash.-based software giant.  

     Speaking here at Gartner Group Inc.'s Symposium ITxpo 99 conference, Ballmer described a new software service initiative that he and other senior- level execs are studying. The goal: provide customers with a better way to engage Microsoft without always having to buy new upgrades or products.  

   The new thinking means more direct interaction with enterprise customers and signals Microsoft's interest in becoming an application service provider (ASP), says Tom Austin, vice president and research fellow at Gartner Group, Stamford, Conn.  

   "If you look at where the market is going to be three, maybe four years from now, you'll see the emergence of the 'Web top.' And many companies are fighting to define and own what they will be," says Austin. "This is the beginning of Microsoft's mission there."  

   Fast forward seven or so years. Microsoft and other ISVs will have to remake themselves as software services companies, says Ballmer. They won't bill customers by the hour, the way professional services companies do, but they'll transform their software from something that is published, pressed onto a CD and then shipped worldwide into something that's more fluid.  

   "This has profound implications on our platform, on the products that we offer, on the development approach and on the scaling approach," says Ballmer. "Absolutely everything has to change, evolve and enhance that vision."  

   Ballmer  

   explains that such a shift won't mean transforming its fast-growing consulting arm or its equally fast-growing support operation into a for- profit center. Instead, it will mean playing a role in reaching out and directly interacting with customer systems. It will mean delivering an enterprise line of business applications. And it will also mean playing the role of an ASP where appropriate.  

   Ballmer envisions a day when he can offer customers the "knowledge worker service." 

   "We'll take care of it for you," he says. "The file sharing. The e-mail. We'll update the software. We'll worry about what hardware you have. Our software has to get to where we can make that kind of commitment."  

   Microsoft is nowhere near that point today. The first step will be to build software that customers themselves can run as a service as delivered by IT organizations and complementary partners. Rather than buy software, customers will purchase it like other services and pay monthly fees.  

   As for developing an ASP business, Ballmer says Microsoft won't run servers or facilities per se. Nor will it pull together software as a service from multiple vendors with one integrated offering. What it will do is write an application that lives as a service.  

   "We will be an ASP ourselves for products like Exchange Office. If someone wants to buy the 'knowledge worker service,' we may have partners who can resell and add value," he says.  

   For more news coverage from the ITxpo, check out www.varbusiness.com  

   Copyright 1999 CMP Media Inc.  

LANGUAGE: ENGLISH  

LOAD-DATE: October 16, 1999 

Copyright 1999 Financial Post DataGroup,
A division of The National Post Company
All rights reserved.    
National Post
(formerly The Financial Post)

September 24, 1999 Friday  NATIONAL EDITIONS

SECTION: FINANCIAL POST INVESTING; 

 Pg. D01 / Front, 

 Market Eye  

LENGTH: 686 words  

HEADLINE: What's that again, Steve?: The Street is well and truly 'Ballmered'  

BYLINE: William Hanley;E-mail William Hanley at whanley£nationalpost.com  

BODY: 

   We can now introduce a new term into the Wall Street lexicon: 'Ballmered' -- as in the stock market was Ballmered yesterday by a negative comment out of the blue by Steve Ballmer, president of Microsoft Corp.  

   Mr. Ballmer, who has a reputation for trying to talk down Microsoft's prospects at earnings time, talked down the entire stock market in late trading, personally wiping more than $200-billion (US) off the U.S. market capitalization with his comment to journalists that high-technology stock valuations were 'absurd.'  

   Now, some people didn't need Mr. Ballmer to tell them some stock valuations were crazy. But the way the market -- especially the Nasdaq -- reacted in the closing hour of trade made it clear this market is incredibly short of conviction.  

     After being well and truly Ballmered, the markets might rally today, especially if Mr. Ballmer recants in some fashion.  

   The pattern in the past has been for bargain-hunters to buy the dips.  

   ---  

   Prophet of doom: This could be tempting fate, what with Ed 'the end is kind of almost nigh' Y-2K-ardeni topping the bill. But with a punitively early deadline, we're only able to report a record crowd was set to gather last night at the Toronto Society of Financial Analysts' forecast dinner at the Sheraton Centre in Toronto.  

   Mr. Yardeni, chief economist at Deutsche Banc Alex.Brown and Wall Street's most famous prophet of Y2K doom, was to be joined on the podium by Jeremy Burge, managing director of institutional equities at TD Securities Inc., and Byron Wien, Morgan Stanley & Co. strategist.  

   Though the markets were quaking in the wake of Mr. Ballmer's bombshell, the situation a year ago was particularly dire when Abby Joseph Cohen of Goldman, Sachs & Co. told the assemblage that everything was OK, that though the markets were down, they were coming back. She was right on with her call for the Dow to be at 9300 by year's end, and that's why we've said it's not over till the Sachs lady sings.  

   ---  

   Net basket: Tired of buying a few shares of Amazon.com Inc. here, a board lot of America Online Inc. there and a small holding of a dot-com or two somewhere else?  

   Yesterday, Merrill Lynch & Co. made it easier and cheaper for investors to own -- and short-sellers to short -- the Internet group by launching a security based on a basket of 20 Net stocks. Trading on the American Stock Exchange under the ticker HHH, Internet Holdrs Trust opened at $108 1/4 (US) and closed at $101 5/8. Merrill sold the 3.77 million shares through its broker network for more than $400-million (US).  

   The most heavily weighted company in the basket is AOL, the number one Internet service provider, accounting for about 20%. At Home Corp., Yahoo Inc. and ETrade Group Inc. together represent 40%. Among other big-name stocks are Amazon and eBay Inc.  

   ---  

   'Hisper' update: These are very early days, but we've had a sneak preview of how First Call Corp.'s 'hisper' estimate of corporate earnings is working. Hisper, unveiled on Sept. 14 by First Call research director Chuck Hill, is an acronym for HIStorical SurPrise-based EaRnings and is an attempt to match the Street's 'whisper' estimates that often exceed analysts' official average estimates as published by First Call (Market Eye, Sept. 15).  

   On Wednesday after the close, stockbroker Lehman Brothers Holdings Inc.'s third-quarter earnings handily beat both the analysts' estimate of $1.99 (US) a share and the hisper estimate of $2.09, coming in at $2.20. The Street was largely unimpressed, marking the shares (LEH/NYSE) down $1 7/8 to $53 3/8 (US).  

   Yesterday, homebuilder Kaufman & Broad Home Corp. (KBH/NYSE) also easily beat both estimates before special items, yet investors only bid up the price 1/4 to $18 3/8 (US).  

   The third early bird hisper stock, homebuilder Lennar Corp. (LEN/NYSE), failed to live up to the hisper estimate, only meeting First Call's the analysts' average estimate. The market punished the stock, which Wednesday dropped $1 1/2 to a 52-week closing low of $16 1/2.  

   As we said, these are early days for hisper.  

LANGUAGE: ENGLISH  

LOAD-DATE: September 24, 1999 

The Associated Press State & Local Wire

The materials in the AP file were compiled by The Associated Press. These materials may not be republished without the express written consent of The Associated Press.  

August 24, 1999, Tuesday, PM cycle

SECTION: State and Regional  

LENGTH: 609 words  

HEADLINE: Microsoft president Ballmer is largest UW donor  

DATELINE: SEATTLE  

BODY: 

    Microsoft Corp. president Steve Ballmer was the most generous donor to the University of Washington in the school's richest year for donations.  

   Ballmer gave nearly $10 million in the fiscal year that ended June 30, while gifts from three foundations endowed by Microsoft Chairman Bill Gates - the William H. Gates Foundation, the Gates Learning Foundation and the Gates Library Foundation - were the second largest, totaling $7.18 million.  

   The smallest donation was a nickel, sent by a student indignant that he had received a funding request before he had even graduated.  

     Donations for the fiscal year totaled more than $103 million. That was an increase of more than 20 percent over the previous year's $84.9 million. Donations included cash, stocks, houses, art, computers and other items. Many gifts were earmarked for endowments, which are funds invested by the university to pay for scholarships, professorships and research.  

   Besides Ballmer's and Gates' software-generated millions, the University received millions more from Microsoft Corp. itself and computer chip maker Intel.  

   "The state, the region, this institution all are fortunate to have in this community this remarkable industry," said Marilyn Dunn, UW vice president for development.  

   About 90 percent of Intel's $2.28 million in donations, the third-highest total, was in the form of computer gear and chip-manufacturing equipment. Likewise, some 40 percent of fourth-place Microsoft's $2.24 million in donations was in software and other non-cash items. Microsoft also donated $205,000 to the school's office of minority affairs for recruitment and other efforts.  

   Microsoft benefits from its donations, said Christopher Jones, senior program manager of community affairs for the Redmond-based software manufacturer.  

   "We do a lot of research there. We recruit there, they are good marketplaces," he said. 

   The company also has made significant gifts to the University of California, Los Angeles, Massachusetts Institute of Technology and the universities of Michigan and Texas.  

   Gifts to the UW School of Medicine and the department of intercollegiate athletics made up 43 percent of all money raised in 1998-99. Medicine took in $28.8 million, including most of Ballmer's gift, aimed specifically at supporting endowed research professorships in lung cancer and cancer biology. Athletics received $15.8 million.  

   The Gates foundation donations went mostly to construction of Mary Gates Hall and to support the Daniel J. Evans School of Public Affairs.  

   Bill Gates contributed only $8,000 directly, and that went to the School of Music Instrument Fund. His father, UW regent William Gates Jr., donated $307,596 to the university.  

   The university has been aggressively pursuing donations, Dunn said.  

   "If we waited for donations to come in, we'd have a smaller staff and the dollars would be smaller," she said.  

   Smaller individual gifts, however, are welcome. The average annual gift was $1,853, and the median - the midpoint in the size of all individual donations - was $100. There were 110,742 donations in all, and gifts of less than $100 totaled $1.28 million.  

   The smallest was Edward DiPippo's nickel. DiPippo, a senior who took his last final exam on Friday and is graduating in anthropology, said he already had received an invitation in the mail to donate to the university. However, he felt he had given enough in the form of tuition, so he placed a nickel in the envelope and mailed it back.  

   "It was a little peasant resistance," he said. "It was almost like a prank."  

   DiPippo received a thank-you note and a UW window sticker for his gift.  

LANGUAGE: ENGLISH  

LOAD-DATE: August 24, 1999 

Copyright 1999 Investor's Business Daily, Inc.    
Investor's Business Daily

August 16, 1999

SECTION: Computers & Technology; Pg. A6  

LENGTH: 594 words  

HEADLINE: Words From Ballmer  

BODY: 

   Steve Ballmer stood ready for questions.  

   The president of Microsoft Corp. had just ended a speech to the Los Angeles Chapter of the Internet Professionals Network. Now came the unscripted part.  

      A man in the audience asked how unhappy customers can get relief from e-commerce sites. ''You can't just take them to small-claims court,'' said the man. ''Have you come up with any sort of Internet judicial system?''  

    The longtime Microsoft executive flashed a grin. ''Well, we're very well- connected in the judicial system,'' he quipped, winning a big laugh and some applause from the crowd.  

   That was the only allusion during the 90-minute talk to Microsoft's ongoing antitrust battle.  

   Ballmer spent most of his time hammering home the idea that his company is driven to diversify its business.  

   He personalized this mission by explaining that 85% of his time is dedicated to Internet efforts, compared with nearly zero just 18 months ago.  

   ''I used to be insulated, just keeping my head down and selling that packaged software,'' he said.  

   After criticism in the mid-1990s that its software focus made it miss the Internet boat, Microsoft has fought to restore its reputation as a threat in the online world.  

   As proof, Ballmer hailed the rise of non-PC devices such as Microsoft's WebTV, which lets people get connected to the Web via their TV screens. He said figures show that of the service's 1.5 million users, 71% don't own a PC and 58% had never before been online.  

    Beyond drawing in new users with consumer-oriented products, a lot of Internet talk has focused on the business-to-business market. But Ballmer sees another key niche: ''business to business to customer.''  

   He cited Microsoft's recent investment in Healtheon Corp., an online consolidator of health-care data. It's seeking to unite insurers, doctors, drug companies and patients in a single online loop. 

   ''The power and the forcing factor comes when you bring the customers in,'' Ballmer said.  ''It's the business-to-business-to-customer stuff that could make business to business that much more effective and powerful.''  

   - Dade Hayes No Wireless War  

   If subscriber growth slows, analysts believe it could lead to a price war among providers of cellular phone service.  

    But any price war is unlikely, says Andy Sukawaty, chief executive of Sprint Corp.'s wireless unit.  

   ''Prices haven't come down significantly over the last six months,'' he said. ''Some of the market leaders like ourselves are basically stabilized where we are in pricing.''  

    Still, he says some wireless firms may engage in aggressive holiday promotions later this year in some markets. ''But nothing that would fall in the category of what I'd call a price war,'' he said.  

   That opinion should comfort other carriers.  

   ''When Sprint comes to town, the prices generally drop,'' said Yankee Group analyst Adam Zawel. ''They lead the way. They may be hoping nobody else will do it to them.''  

   Heavy users of cell- phone services pay the equivalent of 10 cents a minute if they sign up for ''big bucket'' monthly rate plans. These plans, such as AT&T Corp.'s Digital One, leave out roaming and long-distance charges.  

   Wireless rates have fallen 40% in the U.S. since 1996, says the Yankee Group. The Boston-based market researcher says the average price per minute in the U.S. is 32 cents.  

   Zawel says competition may soon heat up in such markets as Dallas, St. Louis and Pittsburgh.  

   - Reinhardt Krause  

LANGUAGE: ENGLISH  

LOAD-DATE: August 17, 1999 

****------------------------------------------------------------------------****

*      30 PAGES              1097 LINES             JOB  57249   1002JA        *
*   7:23 P.M. STARTED     7:24 P.M. ENDED               12/14/99               *
****------------------------------------------------------------------------****
****------------------------------------------------------------------------****
*                         EEEEE      N   N      DDDD                           *
*                         E          N   N      D   D                          *
*                         E          NN  N      D   D                          *
*                         EEE        N N N      D   D                          *
*                         E          N  NN      D   D                          *
*                         E          N   N      D   D                          *
*                         EEEEE      N   N      DDDD                           *

****------------------------------------------------------------------------****

****------------------------------------------------------------------------****

SEND TO: CROWLEY, SHEILA               
         MCKINSEY & CO., INC.                    
         555 CALIFORNIA ST STE 4800              
         SAN FRANCISCO, CALIFORNIA 94104-1713