Press Release

Microsoft’s Secret ‘Screw Google’ Meetings In D.C.


Fri, Aug 28, 2009 at 11:08 am

    Microsoft’s chief Washington lobbyist has been convening regular meetings attended by the company’s outside consultants that have become known by some beltway insiders as "screw Google" meetings, DailyFinance has learned.

    The meetings are part of an ongoing campaign by Microsoft, other Google opponents, and hired third parties to discredit the Web search leader, according to multiple sources with knowledge of the matter.

    "Microsoft is at the center of a group of companies who see Google as a threat to them in some combination of business and policy," said a source familiar with the matter, who requested anonymity to avoid retribution. "The effort is designed make Google look like the big high-tech bad guy here."

    The meetings have occurred as frequently as once a week, sources with knowledge of the meetings say.

    Microsoft employs several D.C.-based public relations firms, including Law Media Group, a secretive outfit founded by former Democratic operative Julian Epstein, and the Glover Park Group, which the software giant retains for issues related to "public policy and governmental affairs," according to Microsoft’s website. LMG declined to discuss its work for Microsoft; GPG says it had never been involved with any "screw Google" meetings.

    Nevertheless, one source familiar with the meetings says, "Law Media Group has several people who work full-time on Google-bashing. Everybody knows Microsoft is trying to throw roadblocks at Google and knock them off their game. Microsoft is trying to harm Google in the regulatory, legal, and litigation arenas because they’re having problems with Google in the competitive marketplace."

    "This is textbook Microsoft," the source adds. "Microsoft has got some of the best, highest-priced lobbyists that money can buy in Washington."

    The meetings have been led by Fred Humphries, Microsoft’s chief lobbyist in D.C. Ginny Terzano, Microsoft’s Washington spokesperson, acknowledged that Google has come up in Microsoft meetings with "lawmakers, regulators, and our own consultants." But of Humphries’s alleged "screw Google" meetings, she says, "This is absurd. While Google is a healthy competitor, Fred is focused on advancing policies that benefit our partners and consumers, and not running meetings of the type you describe. Your sources are badly misinformed, and your information is wrong."

    "As you would expect, Microsoft and Fred are working to educate policymakers and regulators about the benefits of the Microsoft/Yahoo deal," Terzano says. "When you talk about the Microsoft/Yahoo deal, of course Google is going to come up."

    A source with knowledge of the matter called Terzano’s statement a "non-denial denial," saying, "This is an attempt to obfuscate the fact that they are indeed having ‘screw Google’ meetings."

    Microsoft is working to allay Justice Department antitrust concerns over its proposed 10-year web search tie-up with Yahoo, which would unite the No. 2 and 3 competitors in the space.

    The new details about Microsoft’s D.C.-based efforts to undermine Google shine a light on the role of third-party firms, funded by tech giants, that engage in activities such as astroturfing, corporate propaganda, and misinformation. Media reports have hinted at a "whisper campaign" undertaken by entities acting at Microsoft’s behest to undermine Google, both with policymakers and the public.

    In recent months, two heavily detailed, annotated versions of confidential Google slide presentations — one dealing with competition issues, the other with behavioral targeting — have been published by a Santa Monica–based group called Consumer Watchdog. The annotations are highly critical of Google and seek to rebut the search giant’s arguments. Consumer Watchdog has thus far declined to reveal the source of the documents.

    "We consulted with someone outside our organization who did the mark-ups. We published them because we thought they were right on the issue," says John M. Simpson, who leads coverage of issues related to Google at Consumer Watchdog. Microsoft and its PR firms LMG and GPG deny any involvement in producing the annotated Google presentations.

    Simpson says the news of the "screw Google" meetings comes as "no surprise whatsoever." "I suspect that such meetings are happening at Microsoft, and I would suspect that Google has had similar meetings," Simpson says. "It’s obvious that Microsoft is engaged in some sort of organized campaign to undermine Google."

    That there is no love lost between the two companies is well-documented. Microsoft chieftain Steve Ballmer once famously hurled a chair across his office during an anti-Google tirade in which he raged, "I’m going to f*cking kill Google." The incident was revealed in court documents related to Google’s poaching of Microsoft’s former point man in China, Li Kai-Fu. Google lured Li to head its effort there, leading to a lawsuit from Microsoft, which Google won.

    Of course, just as Microsoft holds Washington meetings to discuss its Google strategy, Google does the same. The two companies compete on multiple fronts, and each seeks to enhance its own position while undermining its rival.

    "Of course we keep an eye on what’s happening in the industry," Google spokesman Adam Kovacevich says, "but the focus of our Washington advocacy has always been advancing good public policy for the Internet and our users."

    In less than a decade, Google has become nearly as dominant in the Internet search market as Microsoft is in desktop software. Microsoft recently launched a high-profile foray into the search market with a new search engine, Bing, and it seeks to partner with Yahoo to mount a stronger challenge. But Google, with nearly 70 percent of the search ad market, has little to fear from Bing or the planned joint partnership, and that dominance remains an immense source of Microsoft’s frustration.

    Microsoft and Google are also gearing up for an intense showdown over the very future of the PC operating system. Google recently said it plans to introduce a new web-based operating system based on its Chrome browser (though to date, Chrome has barely dented Microsoft Internet Explorer’s lead in the browser market). Google’s fundamental strategy to shift the locus of computing onto in the Internet, and into "the cloud," represents an ambitious assault on Microsoft’s dominance of the desktop-based operating system market.

    With billions of dollars at stake, the sophisticated D.C. operations and message machines are an inevitable result of Google and Microsoft’s epic struggle for dominance. With the Obama administration perceived as "Google-friendly," despite ongoing federal inquests into Google on antitrust grounds, Microsoft has little choice but to ensure that its voice is heard amid the cacophony of Capitol Hill lobbying.

    And if secret "screw Google" meetings are any indication, this could get very ugly — and very entertaining.

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