Gates' Ego Blamed for Guilty Verdict

LOS ANGELES -- Is it time for Bill Gates to grow up?

Many Microsoft investors, analysts and adversaries blame the giant software company's implacable chairman and co-founder for the collapse of settlement talks in its antitrust battle with the U.S. government, resulting in Monday's ruling that Microsoft violated federal and state antitrust laws.

It is Gates, say sources in and out of the company, who set the Redmond, Washington, company's courtroom strategy of conceding nothing on the charges that it competed unfairly with rivals in several software markets. And it is Gates, they add, who set the terms of possible settlements.

"It's still a one-man outfit as far as some important decisions go,'' said Steven Houck, a former New York assistant attorney general who led the courtroom fight on behalf of 19 states that had joined the federal government's lawsuit.

"Gates is very combative, he's not used to losing and he lives in a world of his own up there in Redmond.''

Observers say Gates, as Microsoft's dominant shareholder and executive, could have settled the case long ago for far less than is now threatened.

The problem, people involved in the talks said, was that it was impossible for Gates to give up anything truly meaningful because he has never been willing to concede that either he or his company violated the law.

Gates' views also are shaped by a broader conviction that the government should have virtually no role in the Darwinian process by which high-tech companies develop their products and battle with rivals in the marketplace.

He deeply believes his company benefits the world in general and everyone who uses its products in particular.

And Gates has long expressed the view that Microsoft derives its financial success from giving consumers what they desire and that any government interference would only hamper the company's ability to improve its products.

Yet it is far from universally accepted that Microsoft's domination of the market for personal computer operating systems - its ubiquitous Windows - has inevitably produced the best products without stifling competition.

Windows is widely decried as bug-prone, for example.

Jackson further ruled Monday that Microsoft's implacable competitiveness had undermined, perhaps even permanently, the potential of software such as Sun Microsystems' Java to increase the utility of desktop computers.

Microsoft's close identification with the personality of its co-founder and chairman has been beneficial in that it has infused the company with Gates' youthful self-confidence and combative nature - both virtues when its future was insecure and its main rivals were industrial behemoths such as IBM.

But it also might have allowed Gates, 44, to become isolated in his conviction that the company should fight the government's lawsuit to the bitter end.

"Microsoft is a corporate culture based on four premises," Gartenberg said: "You work very hard; Bill is always right; it's us vs. them; and Bill is always right."