The Suite Spot
Book Nook: Rewiring microsoft
Last month Microsoft trumpeted a metamorphosis with a $32 billion stock dividend. Now Robert Slater's book Microsoft Rebooted: How Bill Gates and Steve Ballmer Reinvented Their Company gives an inside look at the behemoth's efforts to emerge from decades of start-up paranoia. Two sledgehammers helped budge it: an image-bruising federal antitrust suit and the market's move beyond the PC-centric nature of Microsoft's monopoly. Slater, a former Time reporter, got unusual access to the firm's honchos, including Gates, who is devoting more attention to philanthropy while leaving Ballmer, CEO since 2000, to mature the company. In a clear change from Gates's "hub and spoke" structure, Ballmer has created autonomous divisions while trying, through memos and meetings, to mellow a culture steeped in the insecurity of young, workaholic geeks. Unfortunately, the book offers little insight from competitors and even less from customers. But, as Slater observes, it's too early for them to know if the changes are truly transforming Microsoft, or if it's just molting some uncomfortable skin. -David LaGesse
Grabbing a Bite: Game boy
You might expect the head of a hot video-game company like Activision to have that special brand of neo-nerdy cool: trendy clothes, a tiny cellphone. But Bobby Kotick, in his blue blazer and tie, could just as easily be running a financial services firm as presiding over the house of the Spider-Man 2, Shrek 2, and Tony Hawk games. "I don't play video games," Kotick says as he digs into a steak sandwich, leaving the bun and fries untouched during lunch at the Palm in West Hollywood, Calif. Seated in the back booth under the caricatures of Andy Griffith and lawyer-to-the-stars Eddie Hookstratten, Kotick is a frequent face among L.A.'s players at this local institution. "I'm not a techie," he says with a laugh. "I'm the capitalist, the guy who knows how to take all the fun out of game playing."
And put the profits in. Although Activision, with $864 million in annual sales, is a distant No. 2 behind Electronic Arts, Kotick is trying to chip away at the gap. Sales of Spidey and Shrek helped to nearly triple the Santa Monica company's recent earnings. Kotick is also betting big on video-game advertising, which encompasses everything from product placement and corporate billboards within games to tracking which cellphone an online player may choose for his character. The market is there: Men ages 18 to 34 are gamedom's pre-eminent majority. The money is there: Experts say that ultimately video-game advertising could top television ads, which are worth $9.5 billion annually. All that was missing was a way to measure the value of an ad. So Kotick asked Nielsen, the TV ratings folks, to develop a system to track advertising. "We can actually tell when a player is drinking the Coke [the virtual Coke, that is] and wearing the Quiksilver clothes," says Kotick. "It's all measurable."
Just like the carbs Kotick has been staving off, until the enough-for-eight slice of key lime pie comes. But Kotick eats only a few bites. Better to eat like Spidey than like Shrek. -Betsy Streisand
This story appears in the August 16, 2004 print edition of U.S. News & World Report.
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