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Microsoft could even have difficulties in desktop computing -- a business that Gates helped nurture from a hobbyist's amusement into a $100 billion industry and that is running out of room for growth. Windows 95, a product Gates is counting on to lead his charge into online services and electronic commerce, has run into one delay after another. And now, less than three months before the program is scheduled to hit the stores, just when Gates was supposed to ride the tide of industry support behind what could very well be the next personal-computer software standard, he finds himself under attack on all sides:
-- From users, who complain that some of Microsoft's mainstay products, like the latest version of Word for the Mac, have become bloated and sluggish, and that the company's first attempt to create a more "social" kind of software (the much ballyhooed Bob) was too condescending.
-- From the computer press, which has long acted as Gates' head cheerleader (even more so since he became rich and famous) but now seems to delight in reporting Microsoft's every delay, every bug and every legal setback.
-- From newly emboldened competitors, who have quietly complained for years about Microsoft's strong-arm business tactics and only in the past few months have begun putting those complaints on the record.
-- From government officials, who are concerned that Microsoft has developed a choke hold on a critical industry and who view with alarm the prospect of Microsoft's moving into banking, telecommunications, publishing and entertainment.
These issues came to a head in February, when the antitrust settlement Gates reached last July with Assistant Attorney General Anne Bingaman ran into a roadblock in the person of federal judge Stanley Sporkin. In a widely quoted decision, Judge Sporkin rejected the deal, agreeing with most observers, who believe it was too favorable to Microsoft. "It is clear to this court," he wrote, "that if it signs the decree presented to it, the message will be that Microsoft is so powerful that neither the market nor the government is capable of dealing with all of its monopolistic practices."
After Sporkin's ruling, things seemed to turn sour for Microsoft. In late April the Justice Department's antitrust division sued to prevent the company from consummating the merger with Intuit, a deal that would have been the biggest acquisition in software history. Microsoft was scheduled to fight the suit in court on June 26, but two weeks ago, the company announced that it was dropping the merger, perhaps hoping it would get the government off its back. It may be too late for that. Bingaman says her department has become a kind of "Microsoft complaint center," and her staff says it doesn't have the resources to pursue the leads it is getting. In one closely watched investigation, the Justice Department is reported to have assigned a team to look into Gates' plan to bundle software for Microsoft Network in every copy of Windows 95-a brilliant marketing ploy that could instantly make the company a key player, if not the key player, on the information highway.