MICROSOFT PLAYS HARDBALL IN NEWSPAPER ADS

By: Ken Liebeskind Company Calls Justice Dept. Plan 'A Major Setback'



The U.S. Justice Department wants to break the Microsoft Corp. into two
separate companies, and Microsoft has responded in two different ways:
with newspaper and TV ads that explained its position.



The strongest response came in the form of the newspaper campaign that
broke last Monday in a variety of papers. The full-page ad, appearing
as a letter from company Chairman Bill Gates and President and CEO
Steve Ballmer, argued that the government's actions would be a 'major
setback for consumers, the high-technology industry, and the American
economy.'



On the same day the newspaper ads appeared, a TV spot narrated by
Ballmer made its debut. The spot, positioning Microsoft as an
innovative company that benefits consumers, 'was not directed
specifically at trial-related issues,' said Dean Katz, group public-

relations manager at Microsoft. 'It's intended to address a different
level and audience on issues that are relevant to trial concepts.'



The harder-hitting newspaper ad appeared in The Wall Street Journal,
USA Today, The Seattle Times, the Seattle Post-

Intelligencer, the San Francisco Chronicle, The New York Times,
The Miami Herald, the Los Angeles Times, The Detroit News,
the Detroit Free Press, The Boston Globe, and the Austin
(Texas) American-Statesman.



Microsoft has run similar ads 'four or five times at key points in the
trial process over the past few years,' Katz said, including a few
weeks ago after Judge Thomas Penfield Jackson ruled that Microsoft had
violated antitrust laws. 'We publish them because we feel strongly that
people need to know directly from us what our view is. We feel they're
an effective vehicle for communicating with the public.'



Katz admitted he doesn't know whether the ads work, explaining,
'They're not like TV, where you test different approaches.' But he
said, 'Our goal isn't to guarantee they work, but to communicate with
the public, shareholders, and partners to make sure our point of view
is being clearly communicated.'



Katz said Microsoft created the ad itself, using its advertising
agency, BSMG Worldwide, a division of True North Communications, to
design and place the ad.



Katz is unsure whether Microsoft will run additional newspaper ads as
the case progresses. The company is due to respond May 10 to the
government's proposed remedy, which would break the company apart.



'We're still formulating various aspects of our response to the case,'
he said. 'Print advertising continues to be an important component of
it, but there are no plans yet.'



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