Microsoft, however, is not exactly known for reducing other people’s expectations, or for being satisfied with anything less than head- turning growth. Its ambitions remain outsize. It wants to outfit giant corporations and home offices alike with its software. It wants to have a commanding presence in computing platforms and Web portals. It wants to offer new development tools to programmers and new Internet services to consumers. And it’s developing a new business model that will depend on steady streams of revenue from software sales.
But though the Justice Department has done an admirable job of painting the Redmond, Washington-based behemoth as a crass monopolist, Microsoft is by no means assured of extending its dominance to the Internet. Or to the explosion of new devices and “information appliances” that require operating software, from handheld computers to cell phones to cable-TV set-top boxes. Meanwhile, the core franchise, Windows, is under attack from an unexpected new competitor, Linux, while bitter rivals Oracle Corp. and Sun Microsystems Inc. regularly proclaim the irrelevance of the operating system.
Even Microsoft needs friends in this competitive free-for-all. Better, it wants partners–made through investments, acquisitions, joint ventures–and it wants them fast.
Already, Maffei has embarked on a flurry of dealmaking. The most notable recent deal at press time was last May’s $5 billion investment in AT&T. In exchange, Microsoft won the right to supply a simplified version of Windows for as many as 10 million of the set- top boxes that AT&T plans to install, plus an equity stake of as much as 2.9 percent.
Maffei played a critical role in the deal, as he has in most of the more than 120 investments and acquisitions Microsoft has made since he joined the company in 1993 as director of business development and investments. Maffei came to Microsoft from the CFO job at Pay ‘N Pak, a troubled home- improvement chain that had been taken over by Citicorp Venture Capital. Previously, he had been a vice president at the venture capital outfit.
Microsoft has given Maffei, who holds an MBA from Harvard Business School, ample opportunity to wheel and deal. He has “incredible street smarts,” says his counterpart at WebTV Networks, Albert “Rocky” Pimentel, and is “a masterful poker player” when it comes to negotiating deals.
But Maffei’s persona is as far removed as a CFO’s can get from the nasty caricatures that Justice Department prosecutors and competitors have drawn of Microsoft executives. Both in public and in private, Maffei comes across as anything but an arm-twisting, bad-ass dealmeister. In fact, he pokes fun at the image. When, for example, we suggested at the start of our interview in his small, spartan office that we intended to stray from the list of questions that we’d submitted in advance, Maffei, dressed for the occasion in golf shirt and khakis, joked that he was sorry, but that was just not possible.