60 Execs Rally in Support of Windows Launch

Sixty computer-industry executives joined Microsoft Chairman Bill Gates in New York on Tuesday to proclaim that delaying the release of Microsoft’s latest product would threaten their companies, the economy and, indeed, the march of human progress.

The unusual news-conference-cum-rally was staged as part of Microsoft’s campaign to stymie a potential move by federal and state antitrust officials to seek a court injunction blocking the release of Microsoft’s Windows 98 operating system.

Few in the industry--even at Microsoft--consider Windows 98 a major improvement over the popular Windows 95 program it supersedes. But with sales in a cyclical slump, computer retailers, manufacturers and software developers are counting on the new version to generate some excitement.

“The entire PC industry has a huge stake in the introduction of Windows 98,” said Eckhard Pfeiffer, president and chief executive of Compaq Computer Corp., a major Microsoft customer.

Harvard economist N. Gregory Mankiw pronounced it “deeply troubling” that the government has been quick to seize on untested, new economic theories to justify hobbling Microsoft. Such restraints, he said, “throw sand into the gears of human progress.”

Microsoft’s competitors, who accuse the software giant of using its huge market power to crush rivals and smother innovation, replied that Gates’ ability to summon a phalanx of industry bigwigs to aid his lobbying campaign only proves his company’s dominance.

The tightly scripted news conference--held in a Midtown skyscraper in a 50th-floor conference room that was a little too small for the crowd of 150--included a demonstration of a “beta”--or test--version of the new software.

Unlike an embarrassing recent incident in Chicago, in which the system crashed during a demo by Gates, everything seemed to work properly.

The demonstration computer was loaded with programs from Microsoft rivals Netscape Communications Corp. and Intuit Inc. to show that competitors’ programs run on Windows 98, too.

Netscape, maker of the leading Internet browser, has accused Microsoft of seeking unfair marketing advantages for its own browser from computer makers who depend on Microsoft operating systems.

The Justice Department filed suit last fall charging Microsoft with violating a 1995 consent decree meant to encourage software competition. Now Justice and the attorneys general of 13 states are close to deciding whether to pursue a broader antitrust suit.

Gates said during the news conference that the new initiative is being pushed “at the behest of a small handful of [Microsoft rivals] who want government help to sell their products.”

Regulators hope to make a decision before the middle of this month, when Microsoft expects to ship Windows 98 to manufacturers for loading onto new computers. After that date, the cost of halting shipments would rise significantly.

But many antitrust experts believe regulators have already waited too long to make a move. In deciding whether to grant an injunction stopping sales of Windows 98, the courts must weigh the certain costs to businesses of such a delay against the less certain danger to consumers of letting Microsoft proceed with the launch.

“The horse is out of the barn,” said Jim Halpin, chief executive of CompUSA, one of the nation’s leading computer retailers. He said his company has “already spent millions” to promote the Windows 98 launch.

Ken Wasch, president of the Software Publishers Assn., a trade group of 1,200 firms, including Microsoft, said the temporary relief of an injunction may be the only hope for Microsoft’s competitors. In the years it would take to bring a big antitrust suit to trial, they will have been flattened by the Microsoft steamroller, he said.

Times staff writer Leslie Helm in Seattle contributed to this report.