It's an old joke in Silicon Valley. Q: What's the difference between God and Larry Ellison? A: God doesn't think he's Larry Ellison. This week, we learned the difference between Larry Ellison and civilized society.
Don't get me wrong. I don't recall anyone ever accusing Ellison, the CEO of Oracle Corp., of being a class act in the past. And his arrogance is indeed legendary. But his Nixonian smear campaign against critics of the Justice Department was way out of bounds. And his unrepentant defense of dumpster-diving private investigations was almost beyond belief. At a time when Washington is deciding whether the tech industry can be trusted to respect personal privacy? Is this guy for real?
Let's review the history. Larry Ellison and Oracle sell very expensive database software products. Bill Gates and Microsoft sell very inexpensive database software products. This looks like trouble to Larry Ellison, so rather than using guts and creativity to respond in the marketplace, he whines to the government that his company is being victimized by Microsoft (don't ask me how the government decided that Ellison was a sympathetic victim—Forbes magazine recently estimated his net worth at more than $40 billion).
When the government begins its prosecution of Microsoft, with the ultimate aim of tearing the company apart, Microsoft begins to make some effort to defend itself. Long content to ignore Washington, the company searches for a way to respond to the political/media challenge. Instead of focusing its resources on buying Larry Ellison's garbage, the company funds free-market advocates who have been supporting Microsoft and opposing Justice's intervention in the market.
As a Wall Street Journal editorial on June 29 put it: "Yes, Microsoft supports groups that support Microsoft. Anybody who knows how such groups work knows that their stock-in-trade is ideological consistency. They win support precisely because they aren't for sale."
It's hardly a surprise that organizations like the National Taxpayers Union and the Independent Institute, as free-market groups, get some support from Microsoft among many other sources. The suspicious relationships are actually on the other side: Robert Bork, the great anti-antitruster, and the Progress and Freedom Foundation, for example, are in Oracle's corner. (And, by the way, as I have disclosed in the past, I am proud to be a member of the advisory board of the organization, Americans for Technology Leadership, which advocates open competition in technology and which gets part of its backing from Microsoft.)
So how does Larry Ellison respond to the work of these advocacy groups? Rather than make his own case in public, or challenge the accuracy of the groups' statements, Ellison hires Bill Clinton's favorite "dirt devil"—Terry Lenzner, who heads the detective firm IGI. Rather than debating ideas, Oracle sends a team of P.I.'s to expose financial ties between Microsoft and its supporters. Ellison says all the activities that Lenzer undertook, including going around to offices at night and scooping up trash, were legal. Of course. And what a funny coincidence that the free-market advocates had computers stolen from their offices (something that Lenzer does not admit he did, but they are suspiciously gone anyway).
One Microsoft advocate told us that Ellison's flack had some of his personal financial records and discussed them with the media. Ellison's response to Lenzer's activities: "Left undisclosed, these Microsoft front groups could have improperly influenced the outcome of one of the most important antitrust cases in U.S. history." Get real, Dick Nixon er, Larry Ellison.
Gates and Microsoft compete with Oracle by offering consumers lower-priced products. Ellison and Oracle compete with Microsoft by hiring corporate spies operating through front companies, trying to pay off late night cleaning crews. You tell me who deserves a Justice Department investigation. Obviously, these events illuminate the flaws in Larry Ellison's character, but they tell you even more about the strength of his arguments. In the light of day, it's very tough to convince people that Microsoft is bad for consumers.