Shareholders cheer Gates, ask settlement questions

Shareholders of Microsoft Corporation greeted CEO Bill Gates with a standing ovation Wednesday as the company's annual shareholders meeting got underway in Bellevue Washington. But the meeting was unusually tense for a company that has experienced insane growth over the past twelve months, mostly because of the release of the findings of fact in the Microsoft antitrust case, in which Judge Thomas Penfield Jackson took a decidedly pro-government stance.

Most telling were comments by Gates that the company would do everything in its power to reach a settlement with the government, which sued the company for violating U.S. antitrust laws. However, Gates said that he would not allow the government to prevent Microsoft from integrating Internet features into Windows.

"A lot of people have said to me that, as somebody who is quite pragmatic, and very interested in retaining 100 percent of the focus of the company on building great software, why is it that you can't just settle this case?" Gates said. "Well, throughout the case, we've welcomed any opportunity to resolve the case. That's very important to us, and we've put a lot of energy into that. Resolving the case would be good for Microsoft, and it could also be good for consumers, the industry, and the economy as a whole."

"We're willing to go a long way to address the government's concerns, but if we can't add Internet support, we can't add any new features, if we can't define the user experience of Windows so that all Windows machines operate the same way, then the Windows brand becomes absolutely meaningless. No company should accept these kinds of limitations on their ability to innovate. And that's what's at the heart of this case."

One shareholder even asked Microsoft executives how the company would be split up if that were the final decision of the court. COO Bob Herbold answered that it's too early to speculate on such a thing.

Microsoft shareholders are probably the one group most opposed to the judge's findings: Many of these people have gotten rich off of Microsoft stock, which has increased in value 60% this year alone. Fiscal 1999 was Microsoft's 24th consecutive year of record revenue and profits. Going forward, the company expects to see big gains from Windows 2000, which will be released early next year.

"Windows 2000 \[is\] the most important product for us for a lot of reasons," said Microsoft president Steve Ballmer. "It's the most important product because it will transform the PC, helping to restore its image of reliability and manageability, but it's also the platform that will allow many software developers to transform their business from packaged business to a service business, because it includes many of the core facilities, it and the products that go around it, which are essential for software becoming a service. Frankly, \[we need to\] really make sure that we get Windows 2000 off to a great start. And if we do that, I'm pretty sure we'll all agree, we'll have an excellent next 12 months.

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