Microsoft Steps Up Lobbying Effort To Make Its Case With Lawmakers Software Giant Has Increased Roster Of Lobbyists To About 60

Microsoft is learning - the hard way - how to be a player in the nation’s capital.

After getting slapped around by politicians, government regulators and the media in the past few months, the company is reluctantly ramping up its presence on Capitol Hill.

“It’s still hard for me to say the word ‘lobbying,”’ said Microsoft’s No.2, Steve Ballmer. “It didn’t (used) to seem right to me. But now I’d say we probably should have been doing more D.C.-ish stuff.”

Although Microsoft still maintains a fairly low profile here, it has one of the fastest-growing lobbying operations in town. In 1997, Microsoft boosted its annual spending on courting lawmakers by approximately one-third, to more than $2 million, and increased its roster of lobbyists by one-quarter, to nearly 60.

“They’re really starting to make their presence known, especially since they were nowhere to be found 10 years ago,” said Jennifer Shecter, a researcher at the Center for Responsive Politics, a nonprofit group that tracks lobbying and campaign contributions.

Microsoft’s newfound attention to Washington is motivated in part by mounting evidence that the government may decide to regulate or even break up the world’s largest software firm.

The Justice Department sued Microsoft for $1 million per day in October, alleging the company is abusing its Windows monopoly. At the same time, some Capitol Hill lawmakers have called for increased scrutiny of Microsoft’s business practices.

“I think a lot of the focus on Microsoft by the attorney general is a result of them not positioning themselves well with Congress and the public,” said Rob Enderle, a software analyst at Giga Information Group in Santa Clara.

Microsoft is also concerned that its rivals may be better at working the political system. Last month, Netscape Communications and Sun Microsystems hired former presidential candidate-turned-lobbyist Bob Dole to help encourage the government to regulate Microsoft.

“Netscape, Sun and Oracle have launched a pretty aggressive D.C. lobbying effort, so to some extent, we try to provide some balance in what policy-makers are hearing there,” said Microsoft spokesman Greg Shaw.

And like many technology firms, Microsoft doesn’t want the government to regulate the Internet and other areas of high tech.

“Our involvement in D.C. is directly parallel to how much interest there is in technology there,” Shaw said.

Until 1995, Microsoft had no lobbyists of its own in Washington. If it was concerned about legislation, it would hire a lobbyist at its longtime law firm or ask for help from a trade association such as the Business Software Alliance.

But that kind of scattershot approach is not very effective in the nation’s capital, where company representatives usually try to build up long-term relationships with lawmakers.

So Microsoft opened its first Washington lobbying office in 1995 with a staff of one. In 1996, records show, the office grew to six employees and spent about $1.8 million.

In the first six months of 1997, Microsoft added two more lobbyists to the D.C. office and spent $1.2 million. Records are not yet available for the second half of 1997, but at the current rate, Microsoft will have spent $2.4 million for the year, including both on-staff and outside lobbyists.

In 1996, Microsoft retained 42 outside lobbyists at six law firms. In the first half of 1997, Microsoft added 11 more outside lobbyists to its roster.