(8 of 9)
Will Microsoft succeed? There are no guarantees. The company faces stiff competition in each of its target markets, and even some hostility. Gates, who used to brag that Microsoft "doesn't talk to users," is now trying to make it in the ultimate user's market-the home. There the company must contend not only with some pretty savvy computer-software companies, such as Electronic Arts (John Madden Football) and Broderbund (Carmen Sandiego), but eventually with the real heavyweights of home-software marketing, Sega and Nintendo, as well.
When it ventures outside the computer industry, Microsoft could find itself competing with some very big players. When the Intuit deal was announced, banking and credit-card firms began shoring up their positions in the financial-transaction business; just last week Citibank announced it would eliminate almost all charges for banking by computer in the New York City area. In telecommunications, Microsoft is up against the Baby Bells and giants like AT&T, which is developing its own online service.
Meanwhile, on the computer networks themselves, especially on the rough-and-tumble Internet, Microsoft is not exactly adored. In Usenet newsgroups like alt.destroy.microsoft, the company is routinely excoriated as the great Satan of software. "Microsoft is about to become a climax ecosystem," says John Perry Barlow, co-founder of the Electronic Frontier Foundation, expressing the conventional wisdom of the digerati. "Neither the company nor its software can grow any larger without collapse."
That may be wishful thinking. Microsoft is a formidable competitor, and in computer networking in particular it is playing from a position of considerable strength. By bundling Microsoft Network with Windows 95, Gates will get instant access to tens of millions of potential online customers. Although such bundling is standard practice for online-service providers, competitors like America Online's Steve Case are crying foul. "Windows is the dial tone of the digital age. They shouldn't be allowed to do this," says Case. If the Justice Department's antitrust division doesn't sue to force Microsoft to separate msn software from Windows 95, America Online may take legal action on its own.
They may have to stand in line. A lot of folks, it seems, want to see Microsoft in court. According to the chairman, there are dozens of suits pending against the company. Most are minor disputes. The biggest-the original antitrust case-could be resolved in the next few weeks, when a federal appeals court rules on whether Judge Sporkin was out of line when he rejected the controversial settlement.
Microsoft could still prevail, in court and in the market, but it will not escape unscathed. The business climate in which the company operates has changed. The Sporkin ruling and the Intuit setback have emboldened its competitors. Its business partners are warier, and the customers in the new lines of business Microsoft is pursuing could be equally skittish. "The last person I want to have looking into my checking account is Bill Gates," wrote Ravi Krishna Swamy, a student from North Carolina State University, in a message posted on the Internet.