Gates upbeat about antitrust case as shareholders' meeting begins

Posted: Thursday, November 08, 2001

SEATTLE -- Microsoft Corp. officials lauded the proposed settlement of the landmark antitrust case Wednesday, telling shareholders they can now focus on other aspects of the software giant's business.

''For many years I've hoped to be able to get up and say what I can say this morning, which is that we have come to a settlement with the Department of Justice in the antitrust case,'' Chairman Bill Gates said to applause from shareholders gathered at the state convention center in downtown Seattle for the company's annual meeting.

Gates quickly cautioned that the company still has an ongoing battle with the state attorneys general who did not agree to the settlement. But he and other executives appeared much more cheerful than last week, when the settlement with the Department of Justice was first announced.

Steve Ballmer, Microsoft's chief executive officer, shrugged off the historic antitrust case as among problems that include ''lawsuits and blah, blah, blah.'' He said Microsoft's real challenge is in taking on competitors such as AOL Time Warner Inc.'s unit America Online, Palm Inc. and International Business Machines.

Each company represents areas Microsoft is seeking to dominate -- Internet service, handheld computers and server software. Ballmer said they all have strong competitive offerings, but Microsoft has the benefit of its dominance in other areas.

''We're starting from what I call a very, very enviable position,'' he said.

Microsoft will ''face up to the challenges we see, with the economy, with increasingly competition, with the Department of Justice case,'' President Rick Belluzzo said.

Nine states, including New York and Wisconsin, announced a settlement Tuesday with Microsoft and the government after the company agreed to new provisions aimed at ensuring that competitors can build software products that work seamlessly with the monopoly Windows operating system.

As many as nine other states said they will press forward in the antitrust case and begin collecting evidence soon to decide the most appropriate penalties for Microsoft. A federal judge already has determined the software maker illegally used its influence in the technology industry to undermine rivals.

Shareholders seemed less interested in Microsoft's legal troubles than in pushing the company to be more socially responsible.

Executives were twice grilled on why there aren't more women on the board of directors or in upper management -- a perennial question. Asked why the company had not increased the number of women on the board after pledging to do so five years ago, Belluzzo said, ''it's a complicated set of factors'' but that the company was working hard on it.

Microsoft currently has one woman on its eight-member board of directors. Deborah Willingham, Microsoft's senior vice president in charge of human resources, is the highest-ranking woman in the company.

Microsoft again faced a shareholder proposal to provide better human and labor rights to its Chinese workers, but the measure received less than 9 percent of shareholders' votes.

Shares of Microsoft were off 53 cents to $64.25 in trading on the Nasdaq stock market.

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