Stealth Blitz

[Mitch Stone <mstone@vc.net>]

The complete text of the "Stealth Blitz" article is included below. It is 
well worth reading in its entirety, and will disappear from the Times 
website by tomorrow. I nearly snorted a cup of tea through my nose when I 
opened my morning paper -- it ran on the front page, above the fold. 
Kudos to the Times for breaking this story, and giving it such prominent 
placement.

I've been following Microsoft issues for over a year and a half now, but 
nothing prepared me for the depth of cynicism revealed in this mawkish 
plan to manipulate public opinion, and indirectly, the courts. It's a 
sorry enough situation that Microsoft has a ring planted in most of our 
noses, but they now feel privileged to give it a firm yank whenever we 
happen to stray from the path.

The good news, of course, is that Gates and Co. have to be wiping powder 
burns from their faces this morning. The denials simply won't do. They've 
been caught with their hands in the deepest of all cookie jars, and it 
will be difficult for anyone, even their most sincere apologists, to 
muster a positive word in their defense.

================

http://www.latimes.com/HOME/NEWS/BUSINESS/UPDATES/lat_microsoft0410.htm

Microsoft Plans Stealth Blitz to Mend Its Image

Public relations: Times finds media strategy meant to give look of public 
support. Firm says it's only a proposal. 

By GREG MILLER and LESLIE HELM, Times Staff Writers  

 Stung by the public relations fallout from antitrust investigations of 
its business practices, Microsoft Corp. has secretly been planning a 
massive media campaign designed to influence state investigators by 
creating the appearance of a groundswell of public support for the 
company.

 The elaborate plan, outlined in confidential documents obtained by The 
Times, hinges on a number of unusual‹and some say unethical‹tactics, 
including the planting of articles, letters to the editor and opinion 
pieces to be commissioned by Microsoft's top media handlers but presented 
by local firms as spontaneous testimonials.

 The stated targets of the campaign are attorneys general and politicians 
in California and 11 other states that may be considering antitrust 
action against Microsoft, which is already battling a suit filed last 
year by the Department of Justice.

 When asked about the campaign Thursday afternoon, Microsoft spokesman 
Greg Shaw initially said he was unaware of such a plan.

 "I'm not sure what it is," said Shaw, whose name appears throughout 
confidential documents‹some of them labeled as draft copies‹that are part 
of a large binder of materials distributed under Microsoft's name to the 
campaign's regional coordinators.

 Later in the day, Shaw amended his remarks, acknowledging the plan 
exists but saying it is merely a proposal and "not something we are 
moving on." He acknowledged attending a meeting in Chicago on Monday 
during which the plan was scheduled to be discussed in detail.

 Shaw's characterization of the campaign was also contradicted by 
knowledgeable sources who said it was presented to regional PR firms as 
"a done deal" and that the firms were expected to come to the Chicago 
meeting with detailed plans for their states.

 Even if Microsoft has now decided to abort the plan, the documents and 
the activities they describe reveal a great deal about how serious the 
company considers its plight and the measures it is willing to consider 
to protect its dominance of the software industry.

 The entire effort is "geared to generating leveragable tools for the 
company's state-based lobbyists," positive press clippings that "state 
political consultants can use to bolster the case," according to 
documents. In fact, the Redmond, Wash.-based company has taken the 
unusual step of arranging for one of its top media agencies to recruit a 
dozen public relations firms known for their strong political connections 
in targeted states.

 A printed list of regional coordinators includes Jeff Eller, former 
director of media affairs for President Clinton, a firm in Michigan run 
by the former head of the state's Democratic Party and an Illinois 
company that has played a central role in gubernatorial campaigns. Other 
states targeted are Arizona, Florida, New York, Pennsylvania, North 
Carolina, Ohio, Texas, Virginia and Wisconsin.

 When told of the planned campaign, state officials said such an effort 
would succeed only in aggravating investigators. "I've been battling this 
type of PR gimmickry for a long time, and I can smell it 40 yards away," 
said Michigan Atty. Gen. Frank J. Kelley.

 "It represents arrogance, and it's personally demeaning to me. 
[Microsoft Chairman] Bill Gates would have been better off if he or one 
of his representatives had picked up the phone and called me." Even in 
the modern world of corporate spin control, the proposed plan is unusual 
in its scope, tactics and targets.

 The campaign is being choreographed by Edelman Public Relations, a giant 
PR firm with close ties to Microsoft. But sources said it is designed to 
appear not as a major thrust by Microsoft or Edelman, but as an eruption 
of grass-roots support.

 "They're trying to plant stories about how wonderful it is to do 
business with Microsoft," one source said. "I just find it outright wrong 
that Microsoft and Edelman are trying to hide their involvement in this."

 According to the documents, local PR agencies are scheduled to begin 
submitting opinion pieces to the media next week, followed in the coming 
months by waves of other materials including glowing accounts from 
Microsoft partners, consumer surveys and studies designed to show the 
company's impact on each region's economy.

 Letters to the editor are to be solicited from regional business 
leaders. Opinion pieces are to be written by freelance writers, and 
perhaps a "national economist," according to one document. The writers 
would be paid with costs "billed to Microsoft as an out-of-pocket 
expense." The campaign, which could cost millions of dollars, is designed 
to generate positive stories at critical junctures in Microsoft's legal 
battles.

 One round of stories, a document says, "will coincide with April 21 oral 
arguments before U.S. Circuit Court of Appeals on Microsoft motion to 
disqualify Lawrence Lessig as special master in Microsoft antitrust 
case." Microsoft is not the only company working behind the scenes to 
influence these antitrust matters. Rivals including Netscape 
Communications Corp. have cooperated extensively with investigators, 
supplying documents and technology demonstrations designed to show that 
Microsoft is abusing its monopoly position.

 The various investigations center on Microsoft's attempts to extend its 
monopoly in computer operating systems to Internet-browsing software. The 
Justice Department accuses Microsoft of illegally trying to bundle the 
two products, while Microsoft claims it has the right to integrate the 
browser into the operating system as a new feature.

 Sources close to Microsoft said the proposed campaign is an outgrowth of 
the company's growing fears that it is being outgunned in the media by 
rivals and perhaps even hostile state officials.

 One stated goal of the campaign is to counter "negative, reactive 
coverage that is driven by state attorneys general."

 Media experts said many elements of the campaign seem clumsy, adding to 
a perception that for all of Microsoft's prowess in software, the company 
has little skill with public relations.

 "Companies like Microsoft are run by engineering types who don't 
understand the public," said Ian Mitroff, director of the USC Center for 
Crisis Management, who added that base attempts to manipulate the media 
and shape public opinion often fail.

 "It's cynical," Mitroff said. "It assumes we're dumb."

 This wouldn't be Microsoft's first public relations misstep. The company 
was forced to try to soften its image in January after suggesting 
Department of Justice lawyers were incompetent. Microsoft also appeared 
to be thumbing its nose at the court by insisting it couldn't carry out 
an order to separate its browser from its Windows operating system.

 As part of a subsequent publicity tour, Gates was unusually candid about 
his family life and stressed Microsoft's contributions to schools in 
interviews with Barbara Walters and other journalists. On Thursday, the 
company began placing ads in a handful of newspapers around the country, 
stating its case against regulators. "At Microsoft," the ads read, "the 
freedom to innovate for our customers is more than a goal, it is a 
principle worth standing up for."

 The proposed multi-state campaign represents another component of this 
broad media blitz. The campaign appears to have been crafted by Rory 
Davenport, Edelman's director of "grass-roots and political programs" in 
Washington. Davenport is listed as an author of confidential documents, 
but in a brief telephone interview Thursday, he would say only that 
"there is no agreement for a campaign like that."

 Another Edelman official whose name appears on the memos, Neal Flieger, 
also responded to questions about the campaign by saying, "I'm not 
prepared to amplify on that at all."

 The Chicago meeting, attended by many, if not all, of the regional 
coordinators, focused on the campaign. An agenda for the meeting 
indicates that Shaw and Flieger were to be key speakers and refers to the 
"Microsoft multi-state plan."

 Both men acknowledged they were in Chicago on Monday, although Flieger 
said it was merely to visit family. Other participants said the meeting 
went forward as scheduled, and that regional coordinators flew in from 
around the country to attend. Shaw said elements of the plan may 
ultimately be pursued, but the company has no intention of targeting 
attorneys general or states.

 A number of state investigators, who are reportedly considering filing 
within a month a suit against Microsoft for anti-competitive practices, 
said they are prepared anyway.

 "When it comes to knowledge of computer technology, I take my hat off to 
Mr. Gates," said one attorney general. "But if he wants to enter the 
field of political intrigue, I say welcome to my world, Mr. Gates, I'm 
ready to do battle." 

Copyright Los Angeles Times  

   Mitch Stone
   Editor, Boycott Microsoft
   http://www.vcnet.com/bms 
 +---
   If you don't see it Microsoft's way, then you just don't 
   have enough information. --- Silicon Valley Saying