October 2, 1997
Mr. William H. Gates
Chairman and Chief Executive Officer
1 Microsoft Way
Redmond, WA 98052
Dear Mr. Gates:
The customary executive mind receiving a letter such as this would be inclined toward
prejudgment and denial, instead of anticipation and affirmation. But as a dominant corporate
architect and philosopher of the information highway--note your expressed desire in your book,
The Road Ahead, to open the dialogue about how society should shape its future in an age of
tremendous technological change--you should be willing to include in that dialogue--Appraising
Microsoft and Its Global Strategy.
That, as it happens, is the title of a conference in Washington, D.C. on November 13 and 14,
which Essential Information and I are sponsoring and to which you are invited to make a
presentation. Let me describe briefly what has led to this unique event.
As you may know, our various groups work in the consumer safety and environmental protection
areas with a dual focus on both corporate and government accountability. We also have been
pioneers in advancing freedom of information standards in government and widening the access to
justice by all citizens. Concentration of economic power, along with its abuses, has long been a
concern of ours and we have worked with many people of conscience inside companies, some of
whom became effective whistle-blowers. Recently, people in many different kinds of businesses
have been expressing fear and criticism about your company's business practices and strategies.
At first, we were prone to dismissing such complaints as reflecting envy toward the dominant
company. But as the private criticism became more diverse--flowing from downstream commerce
well beyond software and hardware companies and from more disinterested scholars,
commentators, writers, public officials and customers, it became an incentive toward further
Even this accumulated criticism did not suffice to warrant a gathering to explicitly explore the
many forays and practices of your company's business strategies, which you must agree, have a
range of ambitions and ongoing initiatives in more industrial and commercial directions locally to
globally than possibly any business entity in modern history. What tipped the scale was the fear of
speaking out by thoughtful people in the business world who otherwise have the position, energy
and the resources to do so. Self-censorship brought on by the detailed fear of Microsoft
retaliation--itself seen as a many pronged cluster--is not healthy in any economy. Especially when
this fear is not imagined but rooted in past and current actions which are described and attributed
to your company's high velocity momentum.
On the other hand, you and your associates are described as so fearful of becoming another
Digital Equipment or IBM missing a "big bend in the road", as you put it, that you are moving to
position yourself as the "new middleman" on every lane of the information highway possible. To
some observers, Microsoft playing the insecure and challenged role, as depicted in an article you
may have relished on the cover of Barron's (September 15, 1997), assumes an irony of King
Kong proportions. Seasoned executives are quaking before the relentless Microsoft wave in such
lines of commerce as banking, real estate, insurance, car dealers, travel services, cable television,
newspaper media and entertainment. The June 5, 1997 issue of the Wall Street Journal reported
a detailed Microsoft strategy memorandum, deepened by interviews with your executives, that
foreshadowed the "first a partner then a competitor" approach. Your critics assert that using a
bundling strategy, together with tactical free offerings, made possible by monopolistically
garnered profits, and a punitive "stick" response to your challengers makes Microsoft a leading
candidate for antitrust action if only the enforcement agencies had the up-to-date knowledge,
willpower and resources to apply these necessary laws for a free, fair and competitive economy.
The conference participants are among the few who are still willing to speak openly of their
concerns, findings and recommendations. Many plead for an open, not closed, architecture, for a
digital future that is a patrimony, a commonwealth within which the best and the most consumer-sensitive will have an opportunity to prevail. They seek an information highway that is ungated
where they see such a highway increasingly become gated.
You, Steve Ballmer and Nathan Myhrvold have what you believe to be formidable responses to
these declarations. Responses that are both specific and that rise to the level of national public
policy regarding the information infrastructure in the economy. Focusing on the "Big Kid on the
Block"--Microsoft--addresses the core concern directly and avoids the nuanced generalities and
abstractions that have no operational realities attached to them.
The agenda for the conference is being completed and includes the enclosed topics with the
speakers who have confirmed their presence. Other presenters will be added in the coming days.
In the interest of joining the issues, your presentation should come near the completion of the
conference on November 14. We intend to have a serious, coherent and consequential conference
that will lead to greater public understanding of the trends and the issues that will affect business
and the general public as you wrote about in The Road Ahead. Your industry is thrusting toward
increasing arcane language, acronyms and specializations that are narrowing the public or lay
audience which, ever enlarging, is critical in making this technology serve the broadest of human
interest and well-being.
We are inviting Vice President Albert Gore, your friend and information highway colleague, to
participate in the conference. Being an open gathering and near his office, his presence would
neither entail the cost, time and closed-door nature of his earlier visit to your 100 executives
meeting near Seattle. This should increase the likelihood of his acceptance, one might hope.
Should you wish to discuss this invitation further, please call me or John Richard of Essential
Information at (202)387-8034. Of course, you may wish to have other Microsoft executives
attend the conference and they are welcome to come and absorb the many currents of information
and activity, both in the formal sessions and in the informal corridor and coffee break discussions
that are often so valuable. While there is a conference fee, there is no outside funding or
sponsorship to inhibit or compromise the integrity of the proceedings.