- The Washington Times - Wednesday, April 19, 2000

Vince Gabriele stood yesterday before a sea of young MicroStrategy recruiters and told them what to tell potential hires: Despite all the recent bad news, the company is a great place to work.

The 50 recruiters, all clad in black MicroStrategy Inc. T-shirts, huddled around Mr. Gabriele, director of global staffing, listening intently as if they were in a war room.

He gave them the pep talk just minutes before the company's first major public event since the Vienna, Va.-based software company's announcement last week that it is under investigation by the Securities and Exchange Commission for reporting erroneous financial information.

That announcement could not have come at a worse time for MicroStrategy, which has spent millions of dollars in the past year on marketing initiatives like two television advertisements during the Super Bowl polishing its image as one of the region's up-and-coming electronic-commerce companies.

Mr. Gabriele sought to assure his recruiting staff, mostly under age 30, that MicroStrategy "has been through some rough times" but that the only thing that has changed is the public's perception of the company.

"This company has not changed; we still have tremendous technology, great people and great leadership," Mr. Gabriele said.

Following the talk, the staffers poured into the large meeting room at the Sheraton Premier Hotel in Tysons Corner to begin greeting job seekers.

The recruiters were encouraged to chat up visitors and accept resumes if offered. But the primary goal was to lure serious candidates with the promise of working on "cool" new technology. The event, therefore, was pitched more as a technology expo than a job fair.

At the outset, around 3 p.m., bright-eyed MicroStrategy employees seemed to outnumber the visitors. But that soon changed and more were expected after work. The company said about 300 people were in attendance by 6 p.m.

The job fair and technology demonstration was planned about a month ago, company officials said. That was around March 20, when MicroStrategy revealed that it would have to lower its financial information for the last two years.

The revisions come amid growing criticism that some technology companies are overstating their earnings to drive up shares.

MicroStrategy reduced its reported revenues for 1999 to $151.3 million, down from the previously reported $205.3 million. The change meant that profits sank from a reported gain of 15 cents per share to a loss of 44 cent per share.

MicroStrategy also revised its financial reports for 1998 and 1997. Revenue for 1998 changed to $95.5 million from a reported $106.4 million. And for 1997, it was revised to $52.6 million, down from the previously reported $53.6 million.

The news sent MicroStrategy's stock down 62 percent that day, prompting jitters not just on Wall Street, but also among employees, all of whom get stock options with their salaries.

Since then, the stock has continued to fall on Nasdaq, closing yesterday at $35.44 and plummeting from its six-month high of $313 March 10.

While yesterday's job fair was billed as standard practice for any big technology company struggling to find good people in a tight labor market, damage control also was high on the agenda.

"After all that this company has been through in the past month, MicroStrategy remains focused on core technologies and delivering value for its customers," said Michael J. Quint, the company's public relations manager.

Despite the earnings flap, Mr. Gabriele said the company is expanding quickly and hopes to hire as many as 1,500 people this year, from university graduates to executives.

He said that the earnings problem has not hurt recruiting efforts. But the issue was on the minds of some visitors to the job fair.

"I've been asking these recruiters how they feel about the stock problem and all of them are nervous about talking about it," said Thomas McCreary, a program manager for IBM in Bethesda, Md.

Mr. McCreary, and his friend, Jeff Mosher, who owns a dairy delivery business, heard about the job fair on the radio and decided to check it out. Both said they remained interested in working for MicroStrategy.

However, Mr. McCreary wondered how MicroStrategy's technology products will fare in such a competitive market. One product, E-CRM, is a customer-relations system that allows companies to give customers accurate information about the location and status of their purchases.

Mr. McCreary noted that several competitors like Oracle have similar products.

Mr. Mosher, however, said he was impressed with the company overall, especially its president and chief executive officer, Michael Saylor.

"I'd work here because I like what they are trying to do with the Internet. They are selling information, not just products," Mr. Mosher said.

"I also like that the CEO has hung in there through these hard times and hasn't unloaded his stock," he added. "He's still got some skin in the game and I think that says something about the company."

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