Microsoft rallies shareholders to fight proposed split

The Redmond, Wash.-based software giant has been sending shareholders a letter signed by chairman Bill Gates urging them to contact government officials to express their presumed displeasure with the antitrust case brought by the Department of Justice. The company also advises shareholders who contact the company on different actions they can take to help keep the company together.

"Just as corporations listen to their customers, so do government officials listen to their constituents," the letter reads. Government officials need to know that Americans "do not support the government's efforts to reshape highly competitive industries through litigation."

The letter to shareholders, along with a massive TV and print ad campaign, are the latest steps in an escalating public relations crusade waged by Microsoft to rally political and public support. The effort may pay off, too. Although most court cases are immune to public opinion, the outcome of antitrust cases, which by their nature are supposed to benefit consumers, are often molded by the political winds, legal analysts have said.

The publicity campaign in some respects is likely to grow in importance. On Friday, the Justice Department and several states asked a federal judge to divide the software company into two businesses to prevent what it termed further abuse of its monopoly in computer operating systems. Earlier, the government had indicated it was less inclined to seek a division of the company.

Microsoft has already taken the battle to the court of public opinion by running newspaper ads and TV commercials defending the company's business practices and emphasizing the benefits it has brought to consumers. Television ads featuring Gates and CEO Steve Ballmer have aired on major networks.

Harnessing shareholders' displeasure is a logical extension of the company's battle, a Microsoft spokesman said.

"We have gotten a number of calls from people and parties who are enraged at this overreaching regulatory proposal by the government," said Microsoft spokesman Jim Cullinan. "We are not suggesting they do anything; we are just giving them options about how they can help."

The letter also informs shareholders about the Freedom to Innovate Network (FIN), a site created by Microsoft that provides resources to easily contact local and national political figures and elected officials.

"Even if you do not contact your government official directly, you can join tens of thousands of consumers who have registered their opinions" by using FIN, Gates wrote.

Although the mailing began last month, many of the company's more than 1 million shareholders are just receiving the letters now, company representatives said.

Microsoft has until May 10 to file its objections to the government's remedy proposal, but it has asked for more time to study the government plan.