Breaking Windows How Bill Gates Fumbled the Future of Microsoft

The year is 1997, and despite the machinations of its rivals, Microsoft is master of the digital universe and the darling of corporate America. Windows and Office generate staggering profits, the company's share price is stratospheric, and Bill Gates is the preeminent icon of the information age. No outsider could guess what Gates knew -- that the most powerful threat to Microsoft's prized Windows platform came not from Sun or Netscape or AOL or even from the U.S. Department of Justice, but from within the company's own ranks.

Breaking Windows tells the story of the battle for the soul of Microsoft that raged inside the company from 1997 to 2000 and continues to reverberate today. Drawing on hundreds of e-mails among Microsoft executives, trial testimony, and exclusive interviews with Gates and his chief lieutenants, Wall Street Journal reporter David Bank reveals the bitter maneuvering between what he calls Microsoft's ''Windows hawks'' and its ''Internet doves.'' On one side were the fierce defenders of the hegemony of Windows, on the other those who championed a new way of doing business based on the Internet's ''open standards.'' The reformers wanted to break free from the legacy of Windows and dare to compete on the merits of their software. At the center of this pitched battle stood Gates, the tactical genius who had created the company in his own image and who now accepts full responsibility for his fateful choices. ''Every mistake you can lay at my feet,'' he told Bank, who takes him at his word -- offering the first critique of Gates's leadership not from the perspective of government prosecutors or envious software rivals but frominside the company itself.

Ambitious in scope and surprising in its conclusions, Breaking Windows contains sharply drawn portraits of key past and present executives, including Steve Ballmer, Jim Allchin, Brad Silverberg, Adam Bosworth, and Paul Maritz. Bank argues persuasively that the rifts within Microsoft underlie many of its recent troubles -- from the antitrust courtroom debacle to the exodus of many of the company's most talented employees to Gates's own fall from grace as a corporate leader and technology visionary. Yet even now, Bank contends, Gates could embrace the new rules of competition and restore Microsoft to leadership, perhaps ushering in a new era of openness and innovation.

Breaking Windows breaks new ground in its analysis of Microsoft's past and future business strategies. As Microsoft faces the waning importance of Windows, rallies behind XML, and confronts the open-source insurgency, the past Bank reveals is vital to understanding the future of this company and the still unfinished digital revolution it helped unleash.