November 12, 1998 5:00 PM PST

Microsoft, Intel wage war of words

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WASHINGTON--Microsoft today portrayed a senior Intel executive as a disgruntled "prima donna" who fabricated allegations as part of a vendetta. But despite the sometimes dramatic cross-examination, Microsoft was unable to rebuff the executive's most damaging claim--that the software giant sought to use its dominance to suffocate competitors.

Microsoft attorney Steven Holley introduced evidence Microsoft's day in court that contradicted key claims made earlier by Intel senior vice president Steve McGeady, the government's fourth witness in the ongoing antitrust trial here.

McGeady, who today wrapped up his testimony as trial recessed for the week, has claimed that Microsoft threatened Intel if it did not agree to stop making software for personal computers. The Justice Department (DOJ) and 20 states, which filed suit against Microsoft in May, claim that the actions toward Intel are part of a pattern that violates antitrust laws.

Holley spent much of the day hammering on McGeady's testimony concerning a September 1995 meeting between senior executives at Microsoft and Intel. According to McGeady, Microsoft vice president of development Paul Maritz told the chip giant he intended to "cut off [the] air supply" of Netscape Communications, whose Navigator browser was posing a serious threat to Microsoft's market dominance.

McGeady also had testified that Maritz said his company's strategy was to "embrace, extend, and extinguish" competing technologies, such as the HTTP and HTML Web standards, as well as Sun Microsystems' Java programming language.

Holley suggested that McGeady's claims concerning the meeting were not supported by other Intel executives who had attended. The Microsoft lawyer pointed out that notes taken by other attendees never refer to comments concerning Netscape's air supply or the extinguishing of competing strategies.

What's more, Holley pointed out, the closest McGeady--who apparently has a habit of taking detailed notes--came to recording either of the alleged comments was in a line in his notes that reads: "embrace/extend/change (the nature of the Internet experience)."

Holley seized on the apparent contradiction.

"You didn't need to add [the word "extinguish"] to your notes because you made them up later, didn't you?" Holley asked, his voice raised.

"That's absolutely untrue," McGeady replied, "and I resent the allegation."

Despite Holley's repeated challenges, however, the attorney never succeeded in proving that McGeady fabricated the allegations. On redirect examination, Justice Department lead prosecutor David Boies showed videotaped testimony of Ron Whittier, McGeady's boss at the Intel Architecture Lab, who also attended the September 1995 meeting.

"I do know that I have a clear recollection of 'embrace' and 'smother,' " Whittier said in the deposition, adding that Microsoft applied the strategy "primarily in terms of moving toward Internet applications."

Holley also tried to paint McGeady as a disgruntled employee who had a special ax to grind with Microsoft, even while he harbored a collegial and sympathetic relationship with its biggest competitor, Netscape. According to notes McGeady took during a July 1995 meeting, his supervisor, Frank Gill, called McGeady a "prima donna" who was "belligerent" toward Microsoft.

Holley also referred to a complaint McGeady made that he was "censured" for supporting projects Microsoft objected to, and consequently was forced to take a year-long sabbatical in 1995. And in a September 19, 1995, email to Netscape chief executive Jim Barksdale, McGeady referred to Intel's then-chief executive as "Mad dog [Andy] Grove."

Holley went on to suggest that McGeady leaked confidential information to the press See CNET Radio: Our Man in Washington and to Microsoft competitors in order to harm the software giant. For instance, Holley pointed to one email message in which McGeady warned Netscape about Microsoft's plans to get into the Internet space a day after he and other Intel executives received a briefing from the software giant about those very plans.

In addition, under questioning from Holley, McGeady admitted to being the source of a New York Times article that claimed Microsoft executives told Intel they intended to "cut off [Netscape's] air supply."

And in yet another email, McGeady declined an invitation to sail on Netscape cofounder Jim Clark's yacht because of an upcoming deposition in the case. "I'd love to visit, but appearances, etc., dictate that it be following my deposition," McGeady wrote.

At one point during this morning's session, U.S. District Judge Thomas Penfield Jackson admonished Holley for introducing email in which McGeady referred to Grove, his boss, in a disparaging way.

"What are you trying to demonstrate? Are you just trying to embarrass him?" Jackson asked.

"No I'm not, your honor, although that may be the consequence," Holley answered.

When trial resumes on Monday, the government is set to call Glenn Weadock, president of Independent Software, who is expected to testify about Microsoft's effect on consumers. His written testimony is scheduled to be released tomorrow evening.

 

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