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Microsoft employees are business as usual

Thursday's appeals court decision, which spared the company a breakup but said it illegally maintained a monopoly, seems to have landed with a dull thud in Redmond.

Thursday's appeals court decision, which spared Microsoft a breakup but said it illegally maintained an operating systems monopoly, seems to have landed with a dull thud on the company's Redmond, Wash., campus.

While Microsoft employees contacted over the weekend voiced relief that the appeals court threw out a lower court's decision to split Microsoft in two, most said they are more concerned with the business of building the software giant's new products than the immediate affects of the ruling.

Microsoft's victory special coverage So indifferent were some Microsoft employees to the court's decision that few of those contacted said they followed Thursday's news coverage of the court's decision or read the 125-page court ruling. All of the Microsoft employees quoted in this story requested anonymity.

Several of the employees contacted skipped a companywide meeting Friday with Microsoft Chairman Bill Gates, CEO Steve Ballmer and Deborah Willingham, who heads up human resources for the company's more than 43,000 employees worldwide. Ballmer had cut short a vacation to brief employees--about 30,000 of them in the United States--on the ruling and its implications.

One employee described Friday's meeting as guarded and low-key, but nothing out of the ordinary. "We have meetings like this whenever something big happens, such as the introduction of .Net," said the employee, who focuses on sales to small businesses and state and local governments. "It's an opportunity to interact with senior management on important events."

Although Gates and Ballmer were guardedly upbeat, "it's clear the purpose was to clarify that while the ruling on the breakup was positive, there are still other issues that are in play here," the employee said. Employees also were given the opportunity to ask questions about the ruling.

"I certainly didn't have time to go the meeting," said a tester in one of Microsoft's certification programs, who emphasized that work comes first. "There's a replay I might watch if I have time on Monday."

Another employee, who works on the Xbox gaming console, said he couldn't spare the time or energy to look into the appeals ruling. "Let the lawyers do their jobs, and we will continue to do ours," he said.

Many employees were just arriving to work Thursday morning when the court issued its ruling on Microsoft's appeal. That decision vacated a federal judge's order the company be broken in two, but left largely intact the central claim: that Microsoft violated Section 2 of the 1890 Sherman Act by illegally maintaining its monopoly in Intel-based operating systems.

Not much buzz at all
One software programmer at Microsoft said she saw CNN's coverage of the ruling playing on a conference room television as she headed to her office. "But I wouldn't say there was a crowd hovering over the TV or anything," she said. "There was not much buzz in the office at all."

When asked about reactions to the ruling, none of the employees contacted spoke of hushed gatherings in the hall or frantic e-mail and instant message alerts. Two employees said that an earthquake in Seattle at the end of February caused considerably more rumbling at Microsoft than did the appeals court ruling.

"It's not like there was this cloud hanging over us--contrary to popular belief, I might add," said the certification tester. "Even the earthquake: We live in an earthquake zone, but you don't worry about it until happens."

Still, some employees expressed relief the Court of Appeals had thrown out the breakup order.

"I would characterize the mood as cautiously optimistic, because we're not going to be broken up," said the Xbox developer. "Then again, everybody I know expected that."

Another Microsoft worker, who builds software components that will be part of Microsoft's upcoming Windows XP operating system, said: "For me, this breakup thing was a huge headache, because I didn't--or couldn't--guess what that would do to projects I have on the burner."

The certification tester gave this as the prevailing attitude toward the case among Microsoft employees: "It's not the kind of thing that affects what you're doing because you can't let it affect you. There's simply too much to do."

Still, many employees acknowledge that the trauma of 2000 lingers even as it recedes. Hammered by a federal judge's ruling that Microsoft violated antitrust laws and his subsequent breakup order, by staff losses because of the dot-com boom and by a plummeting stock price, Microsoft faced a crisis around the middle of last year as morale collapsed, employees said.

A lighter mood in Redmond
But late last year, as dot-coms started falling like dominos and Microsoft's stock started a steady rebound, the mood lightened in Redmond.

If anything, said several employees, the stock plunge and partial recovery may have influenced morale more than did the trial. Several expressed surprise Microsoft's stock barely moved after the appeals court ruling--it ended Friday at $73 a share, up only 26 cents.

"Clearly, people are very happy when our stock goes up by as much as 30 points in a few months," explained the Xbox developer. "Still, a lot of people would like it to be better--like the stock was before. The biggest grumblings are from people who have been here the longest and were thinking about retiring."

After dropping to about $40 a share around in December, Microsoft's stock has gradually closed on the $80 or so share price of a year ago.

"The presidential election helped morale, too," said one employee who works on Windows software for embedded devices. "I don't think much of the media ripping into (Microsoft) over the court case, but I believed them when they said George W. Bush's administration would be better for us."

Microsoft's string of product announcements in 2001, however, may have had the biggest effect on morale. "We're cranking again, and you can see it everywhere on campus," one employee said. "I know I'm too busy to worry about anything else, and that includes the trial."

Last year, Microsoft released only one major new product, Windows 2000, whereas, the company has cued up some heavy hitters for late 2001, including Windows XP and Xbox.

Privately, employees give credit to Ballmer for a no-nonsense management style in driving the product blitz and to President Rick Belluzzo for building a strong consumer organization. Ballmer took the CEO's chair from Gates in January 2000, and Belluzzo took over as president and chief operating officer in February 2001.

But Ballmer's hard-driving style has come at a price, with rivals and trustbusters attacking recent Microsoft strategies that they insist are anti-competitive. The forthcoming HailStorm, for instance, part of Microsoft's .Net software-as-a-services strategy, will be integrated into Windows XP. That action could give the company an unfair advantage in the nascent market of software services, some trade groups and Microsoft competitors argue.

This characterization, and other attacks against Microsoft, frustrate the company's employees, according to the certification tester.

"Everyone wants you to succeed, but if you do, you become a target and everyone wants to pull you down," he said. "It's a strange phenomenon in American culture to attack anyone who is successful."