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The Microsoft files: DOJ gets to counterattack

The Microsoft files: DOJ gets to counterattack

It was lead Government attorney David Boies' turn on Tuesday in the Microsoft antitrust trial to question his star witness, Netscape president and CEO Jim Barksdale.

And in rapid-fire sequence, Boies reviewed and reshuffled the volumes of e-mail evidence to create a portrait and a chronology of events that showed that Microsoft was out -- as the Government has alleged from the onset -- to crush Netscape.

Barksdale's testimony ended on Tuesday and he was freed by Judge Thomas Penfield Jackson after Government and Microsoft lawyers finished their final questions. Barksdale, who was questioned intensively for much of the time by Microsoft attorney John Warden, was obviously relieved that the ordeal was over.

"I am glad personally to be able to get back to work," said Barksdale. "We did not bring this to the attention of the Department of Justice, just on behalf of Netscape. It's my personal opinion that the Internet is far too important to mankind to let any one company dominate," he said.

Next on the hot seat will be David Colburn, senior vice president for business affairs for America Online.

After Colburn's testimony is completed, the Government intends to play 6 to 7 hours of the 20 or so hours of videotaped deposition of Microsoft chairman and CEO Bill Gates. That tape is most likely to be played today.

Colburn, AOL's lead negotiator on the contracts, will testify on how Netscape and Microsoft battled to supply a browser for the company.

Colburn, in his direct testimony released on Tuesday, said Microsoft's willingness to bundle AOL in some form in the Windows operating system "was a critically important competitive factor that was impossible for Netscape to match".

In Tuesday's court session, Boies pointedly sought to undercut claims by Microsoft that the alleged market division threat made at a June 21, 1995, meeting was a fabrication and that the two vendors had a cordial relationship.

But Barksdale said there was always a wariness in his relationship with Microsoft. And he was worried -- especially in the events leading up to the meeting -- about just what the cost of the cooperation with Microsoft would be.

"We had wondered if there was a price, but the price had never been discussed."

In the final round of the Barksdale examination, both Warden and Boies sparred via the questions they posed to Barksdale -- especially over whether Microsoft wanted Netscape to eventually stop making browsers for Windows 95.

The Government alleges that Microsoft's promises of sharing critical application programming interfaces (APIs) and marketing agreements ended when Netscape rejected a plan to not make browsers for Windows 95. The proposal, "in my view would cripple Netscape as a competitor of Microsoft", said Barksdale.

"Microsoft was asking Netscape to divide the market," he said.

Microsoft was, "in effect lending us the sleeves on their vest and they were going to come back later and get the whole coat", said Barksdale.

Boies backed up Barksdale's account with a memorandum written by Paul Maritz, vice president of Microsoft's consumer systems division, to Bill Gates that discussed how Microsoft wanted to move Netscape out of the Windows 32-bit area.

Citing that memorandum, Boies asked Barksdale if "Netscape somehow got into Microsoft's corporate systems and somehow invented this, fabricated it?"

"No sir," responded Barksdale, firmly.

Last week, Microsoft used a memorandum written on December 29, 1994, by Netscape chairman Jim Clark to Microsoft seeking an equity investment by the company, to argue that its June 21, 1995, offer of the equity investment in Netscape was a follow-up of Clark's earlier letter.

On Tuesday, Boies played back video of Clark's deposition, in which he described the e-mail as "a moment of weakness and fear on the part of a small company looking in the eyes of the world's most powerful software company."

Microsoft, said Clark in his testimony, rejected the offer. "I never really looked back, and I just decided we'd go forward ourselves."

Barksdale said Microsoft delayed releasing critical APIs it needed to have a browser ready for Windows 95. But he also didn't want to do too much to upset the company.

"Everybody is totally dependent on Microsoft," said Barksdale. "Because Microsoft is the 800-pound gorilla, you have to circle and sniff and be a good guy and try to get this stuff out of them."

But through its market power and contracts with equipment manufacturers and Internet service providers, Barksdale said that Microsoft caused Netscape to lose 20 points of market share in its browser from late 1996 to mid-1997.


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