Oracle confirms hiring detectives to investigate Microsoft's allies

[William Knowles <wk () C4I ORG>]

http://www.techserver.com/noframes/story/0,2294,500221878-500317245-501782605-0,00.html

By MICHAEL LIEDTKE, Associated Press

REDWOOD SHORES, Calif. (June 28, 2000 1:31 p.m. EDT
http://www.nandotimes.com) - Oracle Corp. has confirmed that it hired
a detective agency to investigate allies of rival Microsoft Corp. The
company said the work showed that Microsoft paid the trade and policy
groups to "influence" public opinion during its federal antitrust
trial.

The work by Investigative Group International Inc. allegedly included
a $1,200 offer to janitors to get a peek at the trash of the
Association for Competitive Technology, a trade group.

While Oracle did not take specific responsibility for the probe of
ACT, the company said it was necessary to hire IGI to investigate the
Independent Institute of Oakland, Calif., and the National Taxpayers
Union of Arlington, Va., to expose Microsoft's actions.

The groups "were misrepresenting themselves as independent advocacy
groups, when in fact their work was funded by Microsoft for the
express purpose of influencing public opinion in favor of Microsoft
during its antitrust trial," Oracle said Tuesday.

One analyst called it a Watergate-style dirty tricks campaign. But
another called it standard procedure in Silicon Valley, where many
companies engage in corporate espionage.

Oracle declined to comment beyond the statement early Wednesday. But
Oracle CEO Larry Ellison, whose personal rivalry against Microsoft
Chairman Bill Gates is well-known, may address the issue later
Wednesday at a previously scheduled news conference to unveil a new
product.

The Oracle statement and details of the incident involving the rival
software giants were reported Wednesday in The Wall Street Journal and
The New York Times. Oracle said it told the detective agency nothing
illegal was to be done during the investigation.

"This is a sad day," Mark Murray, a Microsoft spokesman, told The
Associated Press. "(Oracle is) basically trying to justify these
inappropriate actions and it's unfortunate that Oracle won't admit
that it's wrong."

Oracle said it retained the detective agency a year ago to investigate
the Oakland free-market policy institute after it placed full-page ads
defending Microsoft in national newspapers. The Times has reported
that Microsoft paid for the ad.

The taxpayers' union at one point issued a study blaming the antitrust
case - which Microsoft lost and has appealed - for a loss in value of
state pension funds. The Journal later reported that the group had
received funding from Microsoft.

The Journal also reported Wednesday that Oracle hired a Washington
public relations firm - Chlopak, Leonard, Schechter & Associates - to
disseminate potentially damaging information about Microsoft to the
media. That work included suggestions that a company headed by
political consultant Ralph Reed - a top campaign strategist for George
W. Bush - was trying to persuade the presidential candidate to support
Microsoft.

The company, Century Strategies, later apologized for encouraging "a
small number of individuals" to lobby Bush. The company said Reed
never asked Bush to take a position on the court case.

One analyst called it typical behavior for the Valley.

"This is pretty standard. Many companies in the Silicon Valley do this
on some level. You could call it corporate espionage or competitive
intelligence," James Pickrel, with Chase H&Q in San Francisco.

"It's been no secret that Larry Ellison has been gunning for Bill
Gates for a long time. Oracle is among the Silicon Valley companies
leading the charge, looking for an opening to break Microsoft's
dominance," Pickrel added.

"Everybody knows Oracle is a hard-charging company. This just confirms
that," he said. "The only real surprise here is that it came out in
public."

Josh Greenbaum of Enterprise Applications Consulting in Berkeley, was
surprised by the revelations, however.

"This is a little shocking because it brings back memories of the
dirty tricks that have brought down presidencies, said Greenbaum. "It
really speaks to the bitterness of the competition against Microsoft."


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