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Microsoft Execs Disagreed

February 23, 1999

WASHINGTON (AP) _ After Microsoft’s Daniel Rosen returned from a meeting with rival software executives, he told Chairman Bill Gates that they ``seemed OK″ with his company’s plans to give away a product similar to theirs as part of its popular Windows operating system.

But Gates didn’t trust Rosen’s assessment of that disputed June 1995 meeting with Netscape Communications Corp., which a coworker cautioned was ``bunk.″ Gates agreed, confiding in e-mail to another senior executive that Rosen was ``being a little naive.″

As a witness in the government’s landmark antitrust case against Microsoft, Rosen saw his credibility questioned again Monday but not by his own company. He testified before a judge clearly unimpressed with his answers and even to muted laughter from the courtroom audience.

Justice Department lawyer David Boies was so confident he had successfully discredited Rosen to the judge that he abruptly ended his cross-examination in the middle of a response from Rosen after the Microsoft executive had spent only a few hours on the witness stand.

U.S. District Judge Thomas Penfield Jackson, who will decide the verdict, didn’t comment in open court about Rosen’s performance. But at various times, the judge appeared to roll his eyes, shake his head in disbelief and grimace at some of his answers.

Halfway through Rosen’s testimony Monday, the judge urged Boies to ``accelerate the process.″ Moments later, when Boies complained in a private meeting among lawyers and the judge that Rosen’s answers were causing delays, Jackson empathized: ``I know exactly what he is doing, Mr. Boies.″

Microsoft planned to question Rosen today.

In written testimony released today, Microsoft’s next-to-last witness denied government claims that the company imposes illegal restrictions on computer makers to stifle software competitors.

Joachim Kempin, a senior vice president, argued that Microsoft allows the nation’s computer makers to install whatever rival software they choose and make it easily accessible for consumers.

But Kempin defended the company’s limits on removing or hiding any part of its Windows software, saying, ``The value of Windows is largely dependent on Microsoft’s ability to maintain it as a single, coherent operating system standard.″

He warned that computer makers deciding to remove parts of Windows, such as the company’s Internet software, could result in the failure of the entire operating system.

``The risk that Windows would not work properly if ... (computer makers) were allowed to disassemble the product, installing some parts but not others,″ Kempin said.

Rosen was an important witness because he led the Microsoft delegation at the disputed meeting with executives from Netscape, whose own Internet browser software at the time dominated the market. Microsoft planned to include its own browser software within Windows.

In one of its most sensational allegations, the government accuses Microsoft of offering at the meeting to illegally divide the market for such software, threatening to ``crush″ Netscape if it continued selling its browser on computers using newer versions of the Windows operating system.

Rosen called the government’s charges ``fiction, absurd and untrue″ and said they were ``either fabrications or the products of a fundamental misunderstanding.″

When Boies confronted Rosen with e-mail he wrote at the time of the meeting describing his attempts to ``establish Microsoft ownership of the Internet (browser) platform for Win95,″ Rosen offered that ``ownership″ meant keeping a promise to Netscape.

``The word ‘ownership’ means delivering on something you promise?″ the judge asked incredulously. When Rosen said yes, the judge rolled his eyes.

Rosen contended that he didn’t believe Netscape posed a threat to Microsoft until late in 1995, despite the company’s most senior executives telling him otherwise.

Government attorneys showed Rosen sworn testimony from the company’s senior vice president, Paul Maritz, calling Netscape at the time ``a significant potential serious competitor.″ And they showed Rosen e-mail that Gates sent in May 1995 to all employees announcing that ``a new competitor born on the Internet is Netscape.″

``I remember thinking that Bill was probably wrong. ... I probably had a better perspective than Mr. Gates did about Netscape’s intentions,″ Rosen testified, evoking gasps from the courtroom audience.

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