Overdrive, page 8
Bingaman said she intended to argue an occasional case in court herself, an unusual practice for someone in her position. No assistant attorney general for antitrust had appeared in court to argue a case since the late 1970s. Given her background as a litigator, however, her desire to be in the courtroom where the action was came as no surprise to those who knew her. Roger Marzulla, one of her colleagues at the law firm where she worked before coming to Justice, described Bingaman to the National Journal as a “bulldog.” “Once she gets her teeth into something, she never lets go. The biggest temptation Anne will face is to go out and try these antitrust division cases herself.”
Like her hero Teddy Roosevelt, Bingaman soon was talking tough about enforcing the nation s antitrust laws. Only a couple of months after taking office, in August, in her first major speech delivered to the antitrust section of the American Bar Association, she said: “Let me say at the outset that I am an unabashed and enthusiastic supporter of vigorous antitrust enforcement”
It was clear to those who knew Bingaman that if she were not serious about the possibility of bringing a lawsuit against Microsoft, she would never have asked for the case in the first place. So it did not bode well for Gates when Bingaman’s troops began poring over the many boxes of files on the Microsoft investigation that it had received from the FTC’s Bureau of Competition. If the Justice Department decided to take action against Microsoft, it would be the first monopolization suit by the government in over a decade. What Bingaman and her staff had to avoid at all cost, though, was another disaster like the IBM investigation, which had lasted 12 years and had left the division badly demoralized. Yale law professor Robert Bork called the lawsuit against IBM the “Antitrust Division’s Vietnam.” Bingaman’s new team in the Antitrust Division didn’t want to go into an antitrust war with Microsoft unless it was going to win decisively.
“It [the division] cannot afford to make the same mistake twice,” said Braden, who had urged Bingaman to take the Microsoft case. “The division cannot afford to get involved in another debacle like they did with IBM. You can’t litigate a case like that. There is no money for it. Courts don’t have the stomach for it. You burn up staff. It’s a loser.” Braden knew something about the IBM debacle, because she had joined the Antitrust Division right out of law school and had immediately been assigned to do legwork in the field. She had spent more than a year running around with a team of lawyers taking depositions in the IBM case.
Braden and others had suggested to Bingaman that she focus on something Microsoft had done that didn’t comply with antitrust laws and file a narrow lawsuit, then nail Microsoft as quickly as possible. If Gates was a big boy, the reasoning went, he’d come in to the Justice Department, say “mea culpa, mea culpa,” and sign a consent degree and get on about his business.
But no one who understood the deep competitive fires that drove Bill Gates expected him to make it easy for Bingaman to get a win, however small. In the end, Gates did not lose, neither in business nor in the courtroom. He and Bingaman were like two very powerful locomotives speeding toward each other on the same track, and neither was going to move to a side track and let the other pass.
The Internet 101
The traffic jam on Interstate 4 a few miles north of Orlando, Florida, engulfed the rental car with total indifference to the Very Important Person inside. Rivers of automobiles flowed or congested in disregard of social standing and without consideration for wealth or power, so not even Bill Gates was above this simple law of highway dynamics. Like many others on the highway, the chairman of the greatest computer company in the known universe was stuck in traffic, already late for a speaking engagement at the Sheraton Hotel in Maitland, a suburb of Orlando about 25 miles north of Walt Disney World.
Tardiness had become a fashionable habit for Gates. He was giving a lot more speeches nowadays, and more often than not, he was arriving late. Gates had even been late for his talk at the Comdex trade show in Las Vegas the year before, in November 1992. Showgoers and fans had lined up hours in advance to hear him talk, only to wait even longer for the computer industry’s biggest name to take center stage.
On this Florida evening in March 1993, Gates was already more than 30 minutes late for his talk at the Sheraton. And he was going to be even later. Traffic was stalled as far as the eye could see in both directions along the interstate from the hotel. The pace was exasperating for Gates, who still loved to take his Porsche or his red Ferrari 348 out late at night and race at breakneck speed into the Cascade foothills east of Redmond. Now, his rental car inched haltingly toward the hotel as if consuming its last fumes of gas, bumper to bumper with other trapped motorists.
Usually, highway dynamics are influenced by random events like heavy rain and accidents. But on this evening, it was Gates himself who had created the traffic jam. All around him were kindred spirits, men and women who loved the PC, worked in the business, or did a little programming at home in their spare time. They subscribed to computer networks and computer magazines, and stayed up late too many nights, mouse in hand, wiggling a cursor across a green screen, and this night they were all on the road for the same reason, headed for the same destination. One of the pioneers of their industry was going to give a speech at the Sheraton. They were going to see their hero, Bill Gates.
Up the interstate in Maitland, the small security staff at the hotel already had been overwhelmed by the crush of fans who had come from all over central Florida to hear Gates. The Sheraton staff was accustomed to celebrity visits. Former President George Bush had stayed at the hotel. Vice President Dan Quayle had spoken there the previous year, in 1992, at a small Chamber of Commerce luncheon. Tommy Lasorda, the potbellied, legendary manager of the Los Angeles Dodgers baseball team had spoken there, too, and had even been able to fill a small meeting hall. But this was something totally different. The attention surrounding the visit by Gates rivaled that of a rock star. His appearance at the six-story, 400-room, salmon- colored hotel was hosted by the Central Florida Computer Society. Ever since the local paper had run a small item mentioning his scheduled appearance a few days earlier, the phones at the Sheraton had been ringing relentlessly, because his talk was open not just to those in the computer club, but to the public, who had come to the hotel by the hundreds, mostly out of curiosity, for a glimpse of the man who had more money than any other person in America.
To members of the computer club, though, Gates was one of their own. He shared their vision. He spoke their language. He was a rumpled, hyperkinetic nerd with oversize glasses who had become fascinated with computers as a seventh-grader in private school in Seattle, but now stood at the pinnacle of the industry, casting a giant shadow over even once-mighty IBM. He was the computer industry’s grand master of chess, always looking ahead, plotting tens of moves in advance. And he had come to Orlando to share his vision of the future—a future that was unfolding right there in Orlando with the nation’s most ambitious interactive television project under development by Time Warner.
When he wasn’t spending valuable brain time on Microsoft’s antitrust problems, much of Gates’s attention had been focused on the role Microsoft would play when the cable and entertainment industries took advantage of interactive television and other cutting-edge technology to deliver information on demand into millions of homes across the land. It promised to be a dazzling multimedia future, and Gates was already positioning Microsoft to set up toll booths on the information highway. He wanted to move Microsoft beyond the desktop, exploiting the company’s hegemony to shape the future that he had come to Orlando to talk about. So jazzed was Gates about the potential of the information highway to transform the industry, as the personal computer had, that he wanted to write the book on it—literally. Early in 1993, Gates and Microsoft’s technology guru, Nathan Myhrvold, the driving force behind the company’s push to develop interactive software, had started mapping out a book proposal about the information highway. (Their book, The Road Ahead, would not be published until late 1995. Like much of Microsoft’s software, the book would he late.)
For many years, Gates had refused to even own a television, preferring instead to spend his time reading books and magazines. Now he saw in the future a marriage between television and the personal computer, a crossover between computer and consumer electronics. The television, he believed, would become the general-purpose entertainment and information device—a newspaper, a TV guide, a phone book, and a textbook for the kids.
Several months before his trip to Orlando, Gates had met secretly with Michael Ovitz, then chief of Creative Artists Agency and the most powerful man in Hollywood, to talk about interactive computing. Ovitz, a Hollywood power broker, had helped put together the purchase of MCA, the parent company of Universal Studios, by Matsushita. Apple’s John Sculley had already talked with Ovitz. Apple had deals with Sony, the new owner of Columbia Pictures.
Before meeting with Ovitz, Gates read several articles about him, including a lengthy piece in the New Yorker. Gates liked to know everything he could about a competitor or a friend. When it came to business, he looked for every advantage. Gates and Ovitz had been brought together by Microsoft’s Executive Vice President Steve Ballmer and CAA staffer Sandy Climan, who had been classmates at Harvard.
When word leaked out about the secret talks, there was rampant speculation in Tinseltown that perhaps Gates was getting into the movie-making business, that he would take over bankrupt Orion Pictures, the studio that brought The Silence of the Lambs to the silver screen. There was even talk that Gates was going to build his own movie studio in Seattle. Such speculation was ridiculous. Gates was just planning ahead, for that eventual marriage of the computer and the entertainment business. And most people in that business lived in Hollywood. “Were interested in getting together with anyone who might have thoughts about how technology will come together with content,” Gates would say later in an interview with Forbes. “A lot of those people happen to be in Hollywood.”
Gates had also been holding secret, face-to-face talks with John Malone, chairman of cable giant Tele-Communications Inc. (TCI), and with Gerald Levin, chief executive of Time Warner, the entertainment conglomerate, about experimental television services that could run flashy multimedia technology on Microsoft’s Windows system. Gates was especially interested in Time Warner’s pilot project to bring interactive television to approximately 5,000 Orlando homes sometime in 1994. That project was well under way when Gates flew to Orlando to speak to the computer club.
Gates was scheduled to speak at 8:00 P.M., and the line to enter the hotel’s banquet hall had started to form two hours before. By 7:00 P.M., cars blocked Interstate 4 for two miles in both directions leading to the hotel. Maitland police were summoned to untangle a car accident outside the hotel and to keep the cars moving through the 500-space parking lot, which had filled quickly and was now clogged with motorists desperate for an empty place. Near pandemonium reigned in the hotel lobby, because although the hotel banquet hall could seat 800 people, four times that number were waiting to get in. Two Maitland fire marshals arrived after a guest complained. They ordered the lobby area outside the hall to be emptied. The hotel’s beleaguered security staff enlisted the help of catering personnel to form a human Maginot Line to keep the software king’s fans at bay. Shoving matches broke out among the pocket-protector crowd, some of whom had driven more than a hundred miles to hear Gates talk, only to be turned away. One woman in the crowd offered a security guard a sexual favor if he would let her boyfriend, who worked for a computer company, into the hall. Others, trying to bribe or bluff their way in, offered cash or flashed phony press credentials. “I’ve never seen so many nerdy-looking people in my life," said Jasmine Richards, the hotel’s manager.
“In the 15 years I’ve been in the hotel business,” said Steve Kleinberger, director of catering for the hotel, “I’ve never seen that kind of response to one person. It was remarkable. It was like we were dealing with some kind of rock star. There was enough of a surge of people that if it had gotten a little more hostile, we could have had some real serious problems on our hands.”
When Gates finally appeared in the banquet hall, around 9:00 p.m., an hour late, he apologized to those he had kept waiting, and to the hundreds more who had waited in line but couldn’t get in.
Gates talked for nearly two hours in his high-pitched, boyish voice. He talked about a coming mass market for information and about how communications technology would liberate computers from the desktop. Digital information, Gates said, would be available anywhere, anytime, beamed to devices that hardly resembled computers anymore. People would soon be able to talk back to their televisions, ending the era of passive entertainment. He predicted that a pocket-size computer would make the leather wallet obsolete. Microsoft, Gates told the packed banquet hall at the Sheraton, was working on software that would allow the holder of such a device to carry digitized credit cards, receive and transmit messages, and record appointments. It would be able to hold thousands of computerized photos and display maps that showed the owner’s exact location. These pocket-size computers would be on the market within two years, Gates predicted, and cost about $500 each.
As Gates talked about the future that night, his attentive audience hung on every prophetic word. But not once in his two-hour talk did he ever discuss the Internet. Internet-sawy computer users around the country—perhaps some of them listening to Gates that night at the Sheraton—were by now discovering the wonders of the World Wide Web through the simplicity of the Mosaic browser. In homes and businesses, and especially on college campuses around the country, they were surfing the Net by the thousands, their numbers growing daily, techno-hip riders of a great wave of innovation that was about to wash across the land and transform the industry. Gates, meanwhile, was cruising along the information highway, focused on the promise of interactive television and other goodies. The Internet was still not much more than another blip on the clutter of his radar screen—little more than a curiosity, if that.
Fortunately for Microsoft, some very bright people who worked for Gates had started to take notice and were wide awake to the possibility that the Internet just might set the course of the industry for a long time to come. It was becoming apparent to them that the Internet, not the boob tube with set-top boxes running Microsoft software, would bring the information highway into the homes of millions of Americans.
The Internet flashed onto Rob Glaser’s computer screen about the same time that Gates was attacking Novell and its chief executive Ray Noorda during his annual meeting with Wall Street analysts and reporters, accusing Noorda of launching a vendetta that spurred the antitrust suit. Glaser had dialed into the Net after downloading an early version of Mosaic for Windows from the National Center for Supercomputing Applications (NCSA) at the University of Illinois at Urbana-Champaign, where some six months or so earlier Marc Andreessen and his band of programmers had developed the software that would unlock the potential of the global Internet.
“It was amazing! Absolutely amazing!” remembered Glaser of the first time he used Mosaic, sounding like a teenager retelling the story of his first sexual experience. With Mosaic’s point-and-click ease of exploring the Internet, Glaser realized just how powerful this new medium could he, "All the light- bulbs went on for me. 1 honestly thought, ‘This is the future!’ That was my epiphany, if you will.”
A month or so later, in mid-September 1993, Gates called Glaser, who at the time was on a leave of absence, and arranged a meeting at which he asked Glaser to prepare an analysis of how the Internet might affect the Marvel project, Microsoft’s fledgling effort headed by Russ Siegelman to develop an online service. Siegelman had recommended to Gates that the company build its own proprietary system like America Online, Prodigy, and CompuServe. It would prove to be the wrong strategy—and a strategy that Glaser recommended against—that would end up costing Microsoft millions of dollars, as well as time it could not afford to lose.
Glaser was the perfect guy to review the relationship between the Internet and Marvel. In a company staffed by smart people, he was one of the truly heavy thinkers. He had arrived at Microsoft in 1983, at age 21, when the company had fewer than 300 employees and annual sales of a paltry $50 million or so. He quickly became one of the key people in the organization who advised Gates, and was eventually named vice president of Microsoft’s multimedia group, launched in 1985 to develop CD-ROM titles like Encarta. It was Glaser who pioneered Microsoft’s push into multimedia and oversaw Microsoft’s transformation from a software company focused primarily on Windows and DOS to one where content became increasingly important.
“One of my jobs at Microsoft was to be something of an advance scout,” said Glaser. “And one of the reasons that I had so much fun at Microsoft was [that] there was a valuable role to play for being, not the only person, but one of the people who looked at the future and then figured out how to get there from here.”
But after a decade at Microsoft, Glaser began to look at his own future and decided it might be time to do something else, so he took his millions in stock options and, despite repeated attempts by Gates to convince him to stay, walked away in the spring of 1993. “I really just wanted to put my periscope up and think very broadly about what the next chapter of my life would be like. So I figured the best thing for me to do was to just really disconnect, and I did it formally as a leave of absence.”
He spent a couple of months traveling abroad, and when he got back, he decided to get involved in various civic and nonprofit projects. A year earlier, Glaser had felt a similar sense of civic duty when he dipped into those stock options to buy a multimillion-dollar percentage of the Mariners baseball team to keep it in Seattle under local ownership. After returning from his trip abroad, Glaser hooked up with the Electronic Frontier Foundation (EFF), a group focused on computer- related civil liberties issues. The EFF was begun by Mitch Kapor, founder of Lotus Development Corporation. The initial funding came from Kapor and Stephen Wozniak, co-founder of Apple Computer. Early on, the EFF came to the defense of hackers whose rights were under attack from the government. Given Glaser’s leftist politics, it was not surprising that he would be drawn to the liberal foundation.
Like her hero Teddy Roosevelt, Bingaman soon was talking tough about enforcing the nation s antitrust laws. Only a couple of months after taking office, in August, in her first major speech delivered to the antitrust section of the American Bar Association, she said: “Let me say at the outset that I am an unabashed and enthusiastic supporter of vigorous antitrust enforcement”
It was clear to those who knew Bingaman that if she were not serious about the possibility of bringing a lawsuit against Microsoft, she would never have asked for the case in the first place. So it did not bode well for Gates when Bingaman’s troops began poring over the many boxes of files on the Microsoft investigation that it had received from the FTC’s Bureau of Competition. If the Justice Department decided to take action against Microsoft, it would be the first monopolization suit by the government in over a decade. What Bingaman and her staff had to avoid at all cost, though, was another disaster like the IBM investigation, which had lasted 12 years and had left the division badly demoralized. Yale law professor Robert Bork called the lawsuit against IBM the “Antitrust Division’s Vietnam.” Bingaman’s new team in the Antitrust Division didn’t want to go into an antitrust war with Microsoft unless it was going to win decisively.
“It [the division] cannot afford to make the same mistake twice,” said Braden, who had urged Bingaman to take the Microsoft case. “The division cannot afford to get involved in another debacle like they did with IBM. You can’t litigate a case like that. There is no money for it. Courts don’t have the stomach for it. You burn up staff. It’s a loser.” Braden knew something about the IBM debacle, because she had joined the Antitrust Division right out of law school and had immediately been assigned to do legwork in the field. She had spent more than a year running around with a team of lawyers taking depositions in the IBM case.
Braden and others had suggested to Bingaman that she focus on something Microsoft had done that didn’t comply with antitrust laws and file a narrow lawsuit, then nail Microsoft as quickly as possible. If Gates was a big boy, the reasoning went, he’d come in to the Justice Department, say “mea culpa, mea culpa,” and sign a consent degree and get on about his business.
But no one who understood the deep competitive fires that drove Bill Gates expected him to make it easy for Bingaman to get a win, however small. In the end, Gates did not lose, neither in business nor in the courtroom. He and Bingaman were like two very powerful locomotives speeding toward each other on the same track, and neither was going to move to a side track and let the other pass.
The Internet 101
The traffic jam on Interstate 4 a few miles north of Orlando, Florida, engulfed the rental car with total indifference to the Very Important Person inside. Rivers of automobiles flowed or congested in disregard of social standing and without consideration for wealth or power, so not even Bill Gates was above this simple law of highway dynamics. Like many others on the highway, the chairman of the greatest computer company in the known universe was stuck in traffic, already late for a speaking engagement at the Sheraton Hotel in Maitland, a suburb of Orlando about 25 miles north of Walt Disney World.
Tardiness had become a fashionable habit for Gates. He was giving a lot more speeches nowadays, and more often than not, he was arriving late. Gates had even been late for his talk at the Comdex trade show in Las Vegas the year before, in November 1992. Showgoers and fans had lined up hours in advance to hear him talk, only to wait even longer for the computer industry’s biggest name to take center stage.
On this Florida evening in March 1993, Gates was already more than 30 minutes late for his talk at the Sheraton. And he was going to be even later. Traffic was stalled as far as the eye could see in both directions along the interstate from the hotel. The pace was exasperating for Gates, who still loved to take his Porsche or his red Ferrari 348 out late at night and race at breakneck speed into the Cascade foothills east of Redmond. Now, his rental car inched haltingly toward the hotel as if consuming its last fumes of gas, bumper to bumper with other trapped motorists.
Usually, highway dynamics are influenced by random events like heavy rain and accidents. But on this evening, it was Gates himself who had created the traffic jam. All around him were kindred spirits, men and women who loved the PC, worked in the business, or did a little programming at home in their spare time. They subscribed to computer networks and computer magazines, and stayed up late too many nights, mouse in hand, wiggling a cursor across a green screen, and this night they were all on the road for the same reason, headed for the same destination. One of the pioneers of their industry was going to give a speech at the Sheraton. They were going to see their hero, Bill Gates.
Up the interstate in Maitland, the small security staff at the hotel already had been overwhelmed by the crush of fans who had come from all over central Florida to hear Gates. The Sheraton staff was accustomed to celebrity visits. Former President George Bush had stayed at the hotel. Vice President Dan Quayle had spoken there the previous year, in 1992, at a small Chamber of Commerce luncheon. Tommy Lasorda, the potbellied, legendary manager of the Los Angeles Dodgers baseball team had spoken there, too, and had even been able to fill a small meeting hall. But this was something totally different. The attention surrounding the visit by Gates rivaled that of a rock star. His appearance at the six-story, 400-room, salmon- colored hotel was hosted by the Central Florida Computer Society. Ever since the local paper had run a small item mentioning his scheduled appearance a few days earlier, the phones at the Sheraton had been ringing relentlessly, because his talk was open not just to those in the computer club, but to the public, who had come to the hotel by the hundreds, mostly out of curiosity, for a glimpse of the man who had more money than any other person in America.
To members of the computer club, though, Gates was one of their own. He shared their vision. He spoke their language. He was a rumpled, hyperkinetic nerd with oversize glasses who had become fascinated with computers as a seventh-grader in private school in Seattle, but now stood at the pinnacle of the industry, casting a giant shadow over even once-mighty IBM. He was the computer industry’s grand master of chess, always looking ahead, plotting tens of moves in advance. And he had come to Orlando to share his vision of the future—a future that was unfolding right there in Orlando with the nation’s most ambitious interactive television project under development by Time Warner.
When he wasn’t spending valuable brain time on Microsoft’s antitrust problems, much of Gates’s attention had been focused on the role Microsoft would play when the cable and entertainment industries took advantage of interactive television and other cutting-edge technology to deliver information on demand into millions of homes across the land. It promised to be a dazzling multimedia future, and Gates was already positioning Microsoft to set up toll booths on the information highway. He wanted to move Microsoft beyond the desktop, exploiting the company’s hegemony to shape the future that he had come to Orlando to talk about. So jazzed was Gates about the potential of the information highway to transform the industry, as the personal computer had, that he wanted to write the book on it—literally. Early in 1993, Gates and Microsoft’s technology guru, Nathan Myhrvold, the driving force behind the company’s push to develop interactive software, had started mapping out a book proposal about the information highway. (Their book, The Road Ahead, would not be published until late 1995. Like much of Microsoft’s software, the book would he late.)
For many years, Gates had refused to even own a television, preferring instead to spend his time reading books and magazines. Now he saw in the future a marriage between television and the personal computer, a crossover between computer and consumer electronics. The television, he believed, would become the general-purpose entertainment and information device—a newspaper, a TV guide, a phone book, and a textbook for the kids.
Several months before his trip to Orlando, Gates had met secretly with Michael Ovitz, then chief of Creative Artists Agency and the most powerful man in Hollywood, to talk about interactive computing. Ovitz, a Hollywood power broker, had helped put together the purchase of MCA, the parent company of Universal Studios, by Matsushita. Apple’s John Sculley had already talked with Ovitz. Apple had deals with Sony, the new owner of Columbia Pictures.
Before meeting with Ovitz, Gates read several articles about him, including a lengthy piece in the New Yorker. Gates liked to know everything he could about a competitor or a friend. When it came to business, he looked for every advantage. Gates and Ovitz had been brought together by Microsoft’s Executive Vice President Steve Ballmer and CAA staffer Sandy Climan, who had been classmates at Harvard.
When word leaked out about the secret talks, there was rampant speculation in Tinseltown that perhaps Gates was getting into the movie-making business, that he would take over bankrupt Orion Pictures, the studio that brought The Silence of the Lambs to the silver screen. There was even talk that Gates was going to build his own movie studio in Seattle. Such speculation was ridiculous. Gates was just planning ahead, for that eventual marriage of the computer and the entertainment business. And most people in that business lived in Hollywood. “Were interested in getting together with anyone who might have thoughts about how technology will come together with content,” Gates would say later in an interview with Forbes. “A lot of those people happen to be in Hollywood.”
Gates had also been holding secret, face-to-face talks with John Malone, chairman of cable giant Tele-Communications Inc. (TCI), and with Gerald Levin, chief executive of Time Warner, the entertainment conglomerate, about experimental television services that could run flashy multimedia technology on Microsoft’s Windows system. Gates was especially interested in Time Warner’s pilot project to bring interactive television to approximately 5,000 Orlando homes sometime in 1994. That project was well under way when Gates flew to Orlando to speak to the computer club.
Gates was scheduled to speak at 8:00 P.M., and the line to enter the hotel’s banquet hall had started to form two hours before. By 7:00 P.M., cars blocked Interstate 4 for two miles in both directions leading to the hotel. Maitland police were summoned to untangle a car accident outside the hotel and to keep the cars moving through the 500-space parking lot, which had filled quickly and was now clogged with motorists desperate for an empty place. Near pandemonium reigned in the hotel lobby, because although the hotel banquet hall could seat 800 people, four times that number were waiting to get in. Two Maitland fire marshals arrived after a guest complained. They ordered the lobby area outside the hall to be emptied. The hotel’s beleaguered security staff enlisted the help of catering personnel to form a human Maginot Line to keep the software king’s fans at bay. Shoving matches broke out among the pocket-protector crowd, some of whom had driven more than a hundred miles to hear Gates talk, only to be turned away. One woman in the crowd offered a security guard a sexual favor if he would let her boyfriend, who worked for a computer company, into the hall. Others, trying to bribe or bluff their way in, offered cash or flashed phony press credentials. “I’ve never seen so many nerdy-looking people in my life," said Jasmine Richards, the hotel’s manager.
“In the 15 years I’ve been in the hotel business,” said Steve Kleinberger, director of catering for the hotel, “I’ve never seen that kind of response to one person. It was remarkable. It was like we were dealing with some kind of rock star. There was enough of a surge of people that if it had gotten a little more hostile, we could have had some real serious problems on our hands.”
When Gates finally appeared in the banquet hall, around 9:00 p.m., an hour late, he apologized to those he had kept waiting, and to the hundreds more who had waited in line but couldn’t get in.
Gates talked for nearly two hours in his high-pitched, boyish voice. He talked about a coming mass market for information and about how communications technology would liberate computers from the desktop. Digital information, Gates said, would be available anywhere, anytime, beamed to devices that hardly resembled computers anymore. People would soon be able to talk back to their televisions, ending the era of passive entertainment. He predicted that a pocket-size computer would make the leather wallet obsolete. Microsoft, Gates told the packed banquet hall at the Sheraton, was working on software that would allow the holder of such a device to carry digitized credit cards, receive and transmit messages, and record appointments. It would be able to hold thousands of computerized photos and display maps that showed the owner’s exact location. These pocket-size computers would be on the market within two years, Gates predicted, and cost about $500 each.
As Gates talked about the future that night, his attentive audience hung on every prophetic word. But not once in his two-hour talk did he ever discuss the Internet. Internet-sawy computer users around the country—perhaps some of them listening to Gates that night at the Sheraton—were by now discovering the wonders of the World Wide Web through the simplicity of the Mosaic browser. In homes and businesses, and especially on college campuses around the country, they were surfing the Net by the thousands, their numbers growing daily, techno-hip riders of a great wave of innovation that was about to wash across the land and transform the industry. Gates, meanwhile, was cruising along the information highway, focused on the promise of interactive television and other goodies. The Internet was still not much more than another blip on the clutter of his radar screen—little more than a curiosity, if that.
Fortunately for Microsoft, some very bright people who worked for Gates had started to take notice and were wide awake to the possibility that the Internet just might set the course of the industry for a long time to come. It was becoming apparent to them that the Internet, not the boob tube with set-top boxes running Microsoft software, would bring the information highway into the homes of millions of Americans.
The Internet flashed onto Rob Glaser’s computer screen about the same time that Gates was attacking Novell and its chief executive Ray Noorda during his annual meeting with Wall Street analysts and reporters, accusing Noorda of launching a vendetta that spurred the antitrust suit. Glaser had dialed into the Net after downloading an early version of Mosaic for Windows from the National Center for Supercomputing Applications (NCSA) at the University of Illinois at Urbana-Champaign, where some six months or so earlier Marc Andreessen and his band of programmers had developed the software that would unlock the potential of the global Internet.
“It was amazing! Absolutely amazing!” remembered Glaser of the first time he used Mosaic, sounding like a teenager retelling the story of his first sexual experience. With Mosaic’s point-and-click ease of exploring the Internet, Glaser realized just how powerful this new medium could he, "All the light- bulbs went on for me. 1 honestly thought, ‘This is the future!’ That was my epiphany, if you will.”
A month or so later, in mid-September 1993, Gates called Glaser, who at the time was on a leave of absence, and arranged a meeting at which he asked Glaser to prepare an analysis of how the Internet might affect the Marvel project, Microsoft’s fledgling effort headed by Russ Siegelman to develop an online service. Siegelman had recommended to Gates that the company build its own proprietary system like America Online, Prodigy, and CompuServe. It would prove to be the wrong strategy—and a strategy that Glaser recommended against—that would end up costing Microsoft millions of dollars, as well as time it could not afford to lose.
Glaser was the perfect guy to review the relationship between the Internet and Marvel. In a company staffed by smart people, he was one of the truly heavy thinkers. He had arrived at Microsoft in 1983, at age 21, when the company had fewer than 300 employees and annual sales of a paltry $50 million or so. He quickly became one of the key people in the organization who advised Gates, and was eventually named vice president of Microsoft’s multimedia group, launched in 1985 to develop CD-ROM titles like Encarta. It was Glaser who pioneered Microsoft’s push into multimedia and oversaw Microsoft’s transformation from a software company focused primarily on Windows and DOS to one where content became increasingly important.
“One of my jobs at Microsoft was to be something of an advance scout,” said Glaser. “And one of the reasons that I had so much fun at Microsoft was [that] there was a valuable role to play for being, not the only person, but one of the people who looked at the future and then figured out how to get there from here.”
But after a decade at Microsoft, Glaser began to look at his own future and decided it might be time to do something else, so he took his millions in stock options and, despite repeated attempts by Gates to convince him to stay, walked away in the spring of 1993. “I really just wanted to put my periscope up and think very broadly about what the next chapter of my life would be like. So I figured the best thing for me to do was to just really disconnect, and I did it formally as a leave of absence.”
He spent a couple of months traveling abroad, and when he got back, he decided to get involved in various civic and nonprofit projects. A year earlier, Glaser had felt a similar sense of civic duty when he dipped into those stock options to buy a multimillion-dollar percentage of the Mariners baseball team to keep it in Seattle under local ownership. After returning from his trip abroad, Glaser hooked up with the Electronic Frontier Foundation (EFF), a group focused on computer- related civil liberties issues. The EFF was begun by Mitch Kapor, founder of Lotus Development Corporation. The initial funding came from Kapor and Stephen Wozniak, co-founder of Apple Computer. Early on, the EFF came to the defense of hackers whose rights were under attack from the government. Given Glaser’s leftist politics, it was not surprising that he would be drawn to the liberal foundation.
