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EDITIONS
Monday, 14 December, 1998, 17:14 GMT
US versus Microsoft: the seventh week
Bill Gates
Final video testimony of Bill Gates shown at the trial
By independent computer industry analyst Graham Lea.

Microsoft
The seventh week of the Microsoft trial in Judge Jackson's district courtroom in Washington DC proved to be a busy one: Dr Frederick Warren-Boulton concluded his evidence after five days; there was a final extract from the videotaped testimony of Bill Gates; and Dr James Gosling, the developer of Java, began his evidence.

In an inadvertent admission from an in camera session of the court, Dr Warren-Boulton said that AOL had gained 1,700,000 new subscribers as a result of the placement of the AOL icon in the online services folder of Windows.

This certainly shows the business reason why AOL was willing to back Internet Explorer rather than Netscape's browser, which was the condition for Microsoft's promotion of AOL.

A February 1996 AOL email also showed that the service had been growing twice as fast as MSN, Microsoft's competing service. It was also revealed that when Packard Bell modified the Windows 95 boot to cause it to enter a proprietary shell, against Microsoft's wishes, the right-hand button of the mouse become disabled, although there was no elaboration as to whether this was accidental or a planned pitfall engineered by Microsoft.

For some days, Dr Warren-Boulton had been worn down by the relentless questioning of Michael Lacovara, counsel for Microsoft.

But on the final day, there was a sea change, with Dr Warren-Boulton making some interesting points during the redirect examination from Richard Schwartz, counsel for the Department of Justice.

Dr Warren-Boulton pointed out that Microsoft had used focus groups to determine what price to charge for Windows, with the possibilities suggested being $49, $89 and $129.

Such a wide range of pricing was indicative of a monopoly, he said. Microsoft chose $89 when it emerged that the fall off in going from $49 would only be 30%.

It also emerged that a Microsoft document showed that in 1991 the cost of the operating system was around 0.5% of the cost of the total system, whereas in 1996 it had risen five-fold, to 2.5%.

A recent statement by Microsoft showed that it has now risen to 5 per cent, making a ten-fold increase since 1991 in the Microsoft operating system cost.

The increase could not be accounted for by improvements in Windows, it was argued, because other parts of the system had also improved comparably.

Just browsing

Part of a deposition from Microsoft vice-president Jim Allchin was introduced. He admitted that "when [browsing] started, it was just an application".

In court, Microsoft has steadfastly maintained that browsing has always been an integrated part of Windows, rather than an application.

A videotaped extract of the deposition of Bryan Sparks, CEO of Caldera, was shown. He said that Caldera did not now see its Linux distribution as a competitor to Window 9x, and that Caldera was prevented from competing with Microsoft because of Microsoft's control of the APIs in Windows that could be changed to cause incompatibility.

Marc Andreessen of Netscape appeared in another videotaped deposition extract. He testified that at first Netscape had planned Navigator as a platform to launch applications, but now realised this was not really possible.

The videotaped extracts demonstrated that there is no substantive competition from either Netscape or Caldera to Microsoft's operating systems dominance.

Dr Warren-Boulton gave evidence that Microsoft had levered its monopoly in desktop operating systems to browsers.

Courtroom Electrified

The videotaped extracts from Bill Gates electrified the courtroom. The subject was Java, and Mr Gates professed not to know what the lawsuit between Sun and Microsoft was about, and denied that Microsoft was trying to wrest control of Java away from Sun.

David Boies for the DoJ produced an August 1997 Microsoft internal email from Tod Nielsen that said that Microsoft was "pro-actively trying to put obstacles in Sun's path and get anyone that wants to write in Java to use J/Direct [a Microsoft product] and target Windows directly".

Mr Gates said he didn't know what putting "obstacles in Sun's path" meant. He would not even admit to having knowledge that J/Direct was being developed at Microsoft.

The extracts ended with Mr Gates admitting that he was unsure what was meant in another Microsoft email he received in May 1997 that said "This summer [Microsoft is] going to totally divorce Sun" and that Microsoft would be disparaging about Sun's Java Foundation Classes "at every opportunity".

Dr Gosling's written testimony was a model of clarity, but to the surprise of Judge Jackson, was almost entirely ignored by Tom Burt, Microsoft's associate general counsel, whose cross-examination was more like a marketing confrontation than a legal procedure.

Evidently Mr Burt found it difficult to fault Dr Gosling's testimony, so instead debated problems with earlier versions of the Java language that had been, to a fair degree, overcome in the latest version.

Mr Burt produced extracts of an article in PC Magazine [USA] favourable to Microsoft's Java products (which are now injuncted by a federal court, at the request of Sun). The article was offered as "a scientific periodical" but Judge Jackson, on examining it , said: "This appears to me to be a popular magazine. There are a lot of titillating features and commercials and advertisements and what not. That does not qualify it as a scientific journal, as far as I'm concerned."

This rather set the tone for the remainder of the hearing, which will continue next week.

Graham_Lea@heterodox.com is a leading computer industry analyst specialising in Microsoft and who will be following the case for News Online - his views do not represent those of the BBC.

See also:

18 Nov 98 | The Economy
24 Nov 98 | The Company File
23 Nov 98 | The Company File
07 Dec 98 | Microsoft
Links to more Microsoft stories are at the foot of the page.


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