October 21, 1998 5:45 PM PDT

Barksdale's credibility questioned

WASHINGTON--Microsoft today continued to tear away at the 127-page written testimony of Netscape Communications chief executive Jim Barksdale, introducing new evidence that suggested Netscape's account of Microsoft dealings were wrong on several key points.

During the second day of Barksdale's cross-examination here, Microsoft attorney John Warden methodically scrutinized--sometimes paragraph by paragraph--Barksdale's testimony, searching for contradictions, however small.

Barksdale's written testimony, which is considered core to the DOJ's case, details a series of steps that Microsoft allegedly took to Microsoft's day in court freeze Netscape out of the market. Chief among them was a June 1995 meeting in which Microsoft manager Dan Rosen allegedly proposed dividing the browser market.

Separately, U.S. District Judge Thomas Penfield Jackson granted a government request to force Microsoft to make available the complete contents of databases related to retail sales of Windows and Internet Explorer. Previously, Microsoft had turned over such information to computer sellers only.

The most explosive revelation in court on this third day of trial was an email Netscape cofounder Jim Clark sent in December of 1994 to Microsoft executive Brad Silverberg, in which he attempted to persuade Microsoft to take an equity stake in the start-up browser maker.

"We want to make this company a success, but not at Microsoft's expense," Clark wrote in the email, which was made public today. "We'd like to work with you. Working together could be in your self-interest as well as ours," Clark continued, adding, "We have never planned to compete with you."

In the cross-examination, Warden asked Barksdale to explain his testimony concerning the meeting in light of Clark's email to Silverberg. "Is it your testimony that this [market division] was something that Microsoft proposed and wanted?" Warden asked.

Barksdale, who appeared to be surprised by the contents of the email, answered that he was not really sure that the email conversation was the first time the investment idea had surfaced.

Warden then asked: "Do you have any basis for suggesting or implying that there may have been" an earlier proposal by Microsoft?

Barksdale replied that he did not, but that that didn't mean the subject had not been raised earlier.

Jim Barksdale
Jim Barksdale
When Warden asked Barksdale if he had known of the e-mail between Clark and Silverberg, the CEO said he was aware one had been sent but had not known of its contents. "[Clark] said it was not significant," he said, adding that the offer quickly was rejected.

In another heated exchange during more than five hours of cross-examination today, Barksdale and Warden sparred over details of the 1995 meeting in which Microsoft allegedly proposed dividing up the market.

"Did Mr. Rosen say the [companies] should divide the market?" Warden asked, referring to Microsoft manager Dan Rosen, who attended the meeting.

"I said that he intimated that in every way," Barksdale eventually answered.

"Did he use the words 'market division' at all?" Warden asked.

Barksdale replied that, under Rosen's suggestion, "We would compete in the non-Windows 95 market and they would compete in the Windows 95 market."

"So you're saying there was no explicit, only an implicit, proposal?" Warden asked.

"That's not correct," Barksdale protested.

"So there was no explicit proposal?" Warden repeated.

"It was as explicit as it gets," Barksdale answered. "He did not say the words 'divide the market.'"

Warden also disclosed that Clark had attended an address by Microsoft chairman and chief executive Bill Gates at a Washington conference in the fall of 1994. According to a July deposition Clark gave, Gates said that he was planning to include a Web browser as part of Windows. The meeting calls into question key statements made in Barksdale's testimony, Warden suggested.

Outside of court, however, a Netscape attorney strongly disagreed, and pointed to a separate part of the deposition Microsoft said bolstered its position.

In his deposition, Clark testified: "Bill Gates specifically told me that he was going to give away the Web browser in the operating system, and this was before we released our first beta and I felt like we would have to [give away our browser], in order to survive against Microsoft."

The admission is meant to cast doubt on Barksdales's claim that Microsoft included Internet Explorer in Windows as a way of crushing Netscape and as a means of protecting the Windows monopoly.

At other points in the deposition, however, Clark appeared to back away from the assertion. "Netscape has never given away the browser," Clark said in his deposition. "It allowed people to download it for free for one brief period during the beta, but after that, it never gave it away."

A Microsoft spokesman provided reporters with snippets of the deposition in which Clark claims that Gates said he would include a browser in Windows for free. The spokesman did not include the portion of Clark's testimony in which he clarifies that Netscape, in fact, did not give away the browser after its beta period.

Warden asked Barksdale if Clark had looked at his written testimony. Barksdale said he had not.

In coming days, Warden and the Microsoft legal team likely will continue to chisel away at Barksdale's testimony on several fronts. Warden's questions appear to be trying to cast doubt on Barksdale's claims that Microsoft proposed dividing the market--a proposal that is tantamount to a violation of federal antitrust law.

The cross-examination also appears aimed at establishing that Barksdale, claiming to speak on behalf of Netscape, has submitted testimony that other top executives are not fully aware of and that have not been checked for accuracy.

"We're very pleased with the way things are going today," spokesman Mark Murray said after court had recessed for the day. He said that the cross-examination established that it was Netscape that approached Microsoft about an investment, rather than the other way around.

Citing other cross-examination today, Murray also claimed that Microsoft was able to establish that Netscape has always had the ability to get its products into the hands of consumers. Murray was referring to evidence showing that Netscape has distributed more than 26 million copies of its Navigator browser this year alone.

Netscape attorney Christine Varney, however, accused Microsoft of misleading the court, calling Warden's questioning "yet another attempt by Microsoft to rewrite history." She pointed out that Clark also included in his email the statements that "no one in my organization knows about this message." Microsoft failed to reveal that sentence in court today.

David Boies, a private attorney hired by the Justice Department (DOJ), agreed with that strategy, saying earlier today that Clark's email "doesn't have anything to do with anything in this case." Similarly, he disputed Warden's suggestion in court that, through Clark, Gates told Netscape of Microsoft's intention to fold a Web browser into Windows free of charge.

Although Boies said he had not yet seen a transcript of Gates's remarks at the Washington conference, he asserted that "there is nothing in the transcript that suggests [Microsoft was] going to integrate [the browser] or combine it, and in the email either."

Microsoft attorneys are expected to continue their cross-examination tomorrow, and at the current pace, Barksdale may not be finished testifying until Monday. Trial will not be held on Fridays. Once Barksdale's cross-examination is complete, government officials will have a chance to "redirect" questions to Barksdale.

Avadis Tevanian, Apple Computer's chief of software, will be the next witness to take the stand.

 

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