Microsoft turns 35: Best, worst, most notable moments

An opinionated look back at the good, the bad and the ugly of Microsoft's 35-year history

Bill Gates co-founded Microsoft in 1975.

Bill Gates co-founded Microsoft in 1975.

Best company spokesperson

Bill Gates -- his geekiness and intelligence eventually won over the press, and he became a near-ubiquitous magazine cover boy before his retirement in June 2008.

Worst PR disaster

In February 2008, extremely embarrassing internal documents were released in what's known as the Vista "junk PC" lawsuit. The class-action suit against Microsoft charged that the company misled consumers into buying Windows XP computers that were marked "Windows Vista Capable" -- even though those PCs couldn't run the most important features of the then-new operating system.

Over several months, internal Microsoft documents became part of the suit, including one from an unnamed employee, who wrote in an e-mail, "Even a piece of junk will qualify" to be called Windows Vista-capable. And in another e-mail message, Mike Nash, who is now a corporate vice president for Windows product strategy, wrote, "I PERSONALLY got burnt.... Are we seeing this from a lot of customers?... I now have a $2,100 e-mail machine."

Jim Allchin, who at the time of the Vista-capable PC push was the co-president of Microsoft's Platforms and Services Division, wrote in an e-mail, "We really botched this.... You guys have to do a better job with our customers."

Later e-mails revealed that Microsoft may have launched the marketing scheme in order to help Intel sell low-end chips that were not capable of running the full version of Vista.

Most stunning court decision

On April 3, 2000, a U.S. federal court ordered that Microsoft be split up. As a result of an antitrust suit filed in 1998 by the U.S. Justice Department, Judge Thomas Penfield Jackson ordered that Microsoft be broken up into two companies: one that would develop and sell operating systems, and another that would handle other types of software.

This followed Jackson's Nov. 5, 1999, findings of fact in which he declared Microsoft a monopoly that used its power to attempt to destroy perceived threats from competing companies, including Netscape, Apple, Sun, Lotus and others. The court's breakup order ultimately did not stand.

Most favorable court decision

This one's a toss-up between two very big decisions. First up is a $5.5 billion suit filed in 1988 by Apple against Microsoft and Hewlett-Packard alleging that Windows violated the "look and feel" of the Mac operating system. Over the years, the lawsuit was whittled down by a variety of courts, and on June 1, 1993, Federal District Judge Vaughn Walker issued a summary judgment against Apple and in Microsoft's favor.

That was certainly a significant decision, but it ultimately would not have affected the way in which Microsoft did business -- Microsoft could have simply paid Apple royalties and continued on its merry way. An even more important decision for Microsoft happened on June 28, 2001, when the D.C. Circuit Court of Appeals overturned Judge Thomas Penfield Jackson's 2000 order to break up Microsoft.

Despite the overturning of Jackson's ruling, his findings of fact remained intact, and the case against Microsoft continued dragging on through the courts until 2002.

Biggest relief

On Nov. 1, 2002, the Department of Justice and Microsoft settled the antitrust case against Microsoft. The complex agreement required that Microsoft share its application programming interfaces (API) with other companies and take a variety of other steps to curb anticompetitive behavior. However, Microsoft was allowed to stay intact as a single company.

Worst moment in international relations

On Feb. 27, 2008, the European Union slapped a record fine of $1.3 billion on Microsoft for anticompetitive behavior. The EU levied the fine for violating the terms of an agreement the company had reached with it in 2004 to curb anticompetitive behavior relating to Windows.

In issuing the fine, Neelie Kroes, the EU's competition commissioner, said, "Microsoft was the first company in 50 years of EU competition policy that the commission has had to fine for failure to comply with an antitrust decision. I hope that today's decision closes a dark chapter in Microsoft's record of noncompliance with the commission's March 2004 decision."

Most misleading product demo

At Microsoft's antitrust trial in 1998, the company backed up its claim that Internet Explorer and Windows couldn't be easily separated with a taped product demonstration showing that removing Internet Explorer from Windows caused system instability and slowdowns. It was shortly revealed, though, that Microsoft's demo was falsified, as was a subsequent one showing that it was easy for America Online users to install Netscape Navigator on their Windows desktops.

Best use of company billions

Over the years, Microsoft has made billions of dollars in profits for itself and its investors, and that money has been spent in many ways. But clearly Microsoft founder Bill Gates has put that money to its best use through his founding of the Bill & Melinda Gates Foundation.

The foundation, which has an endowment of more than $34 billion, has awarded a total of more than $21 billion in grants since its founding in 1994, and it paid $2.8 billion in grants in 2008 (the most recent year for which figures are available). The grants focus on global health issues, global development (such as agricultural development), and a variety of issues in the United States, with a primary focus on education.

Worst nightmare

On Sept. 4, 1998, Stanford University students Larry Page and Sergey Brin founded Google. Since its launch, Google has dominated Internet search, a market that Microsoft initially ignored and now must play catch-up in. Google has also entered the e-mail and productivity software markets with its Gmail and Google Docs offerings, and it has introduced a browser called Google Chrome and an operating system called Chrome OS. On top of that, it offers a slew of other services and tools -- making it Microsoft's biggest threat in coming years.

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