Microsoft exec stays focused

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Mich mathews darts effortlessly through clumps of khaki-clad Microsoft Corp. executives whispering last minute instructions before a major technology briefing on the software giant's .NET strategy.

She is slight and has a soft-spoken, honey-tinged voice that gives her a sunny, almost breezy manner. Her appearance belies her heavyweight position: As VP-marketing division, the 33-year-old Brit presides over Microsoft's marketing strategy, sitting at the hub of an increasingly significant organization with several spokes -- advertising, packaging and events; strategic marketing & research; corporate PR; customer/partner satisfaction & loyalty; solutions marketing; and business operations.

DIRECTS $600 MILLION BUDGET

Promoted from head of Microsoft's corporate PR group earlier this year, Ms. Mathews not only marshals an advertising budget estimated at more than $600 million, but as a member of Microsoft's business leadership team, she has a direct connection to the two guys at the top of the organizational chart -- Bill Gates, chairman and chief software architect, and Steve Ballmer, president-CEO.

Without a doubt, it's been a brutal year for the world's biggest software marketer. U.S. District Court Judge Thomas Penfield Jackson's antitrust decision this spring ordering the company's split in two casts a pall over most of Microsoft's activities despite its best efforts to carry on. The company has appealed the decision.

As the company's central marketing figure, Ms. Mathews led the PR and advertising teams to manage the torrential news flow and huddled with Messrs. Ballmer and Gates to shape Microsoft's response to the decision for public consumption.

Ms. Mathews and other executives say they are proceeding with marketing initiatives as planned for the 2001 fiscal year, which began on July 1: "There isn't a Plan B. We have absolute belief in the legal system," she maintains.

And there are a bevy of projects set to roll. For starters, the company has pledged $500 million in marketing, at least $150 million of which is advertising, for the X-Box videogame console, handled by McCann-Erickson Worldwide, New York.

Microsoft's MSN Internet service enters the second year of an important relaunch backed with nearly $100 million in advertising. The company continues to stake out a prime position as a partner for Internet businesses via Windows 2000 and related products, in high profile efforts via McCann, San Francisco.

NEW INTERNAL GROUP

Ms. Mathews has worked to streamline communications with the agency and has ramped up a new central marketing organization internally. She's also helming efforts to craft a new global positioning for the company that will clearly articulate Microsoft's mission to end users.

"Obviously, one of the principal things we need to do is to clearly define what Microsoft's meaning is in the digital era," Ms. Mathews says.

As the company hones messaging across its target audiences, Microsoft is "looking at is audience-driven solutions rather than product-driven solutions," she says.

The new .NET Web-delivered software platform could very well prove Microsoft's most daunting marketing challenge yet. While executives maintain the technology roadmap for .NET exists, the marketing strategy remains a work in progress.

"The key thing there is we have to have the .NET products and services. There's a balance between laying the groundwork for .NET and providing the evolution [of existing products]," Ms. Mathews says. Visual Studio, one of the first .NET-based products, isn't due out for at least six months. Other products are on a 18-to-24-month cycle.

"Software as a service is quite a different approach, and the key thing is engaging the [software] developer audience," Ms. Mathews says.

DATA SERVICES BATTLEGROUND

Microsoft isn't the only tech giant thinking about information services positioning. Hewlett-Packard Co. is looking to transform itself into a provider of Internet services and will tout new offerings heavily across all media. The company is on track to nearly double its ad spending as it begins a new fiscal year on Nov. 1. About 70% of that will tout the H-P brand and the "Invent" umbrella positioning.

"We definitely think we need to increase our online spending because H-P is a major player in the Internet," says Peter Van Naarden, brand marketing manager.

IBM Corp., looking to maintain leadership in the services space, will keep roughly the same advertising media mix as last year with 50% of its spend going toward print, 40% to TV and the balance online, radio and outdoor. IBM will broaden the scope of e-business, flagging issues critical to evolving Internet companies such as infrastructure and pervasive transactions across multiple platforms.

Compaq has spent more than a year retooling and is looking for traction from a recently launched global brand campaign from FCB Worldwide, New York. The company will spend at least $350 million across all media. And Intel Corp., will bet on new businesses, including Web hosting, to transform itself into more than just silicon chips.