From John Rogers at the trial in Washington.
Microsoft Corp’s lead attorney John Warden continued his cross- examination of key witness Jim Barksdale Tuesday, and spent the day further hammering away at the written testimony of Netscape’s chief executive. Warden picked up where he left off by methodically going through the testimony paragraph by paragraph, looking to expose any contradictions or holes that it might contain. As the courtroom waited for the issue of the alleged market division meeting to surface, Warden produced a December 1994 email from former Netscape chief executive Jim Clark to two top Microsoft officials in which Clark actively sought investment money from the larger company. In it, Clark said: We want to make this company a success, but not at Microsoft’s expense. We’d like to work with you. Depending on the interest level, you might take an equity position in Netscape, with the ability to expand the position later. Barksdale seemed shocked by the email, which also said Netscape never considered client software being its business and never planned to compete with Microsoft. The evidence was designed to refute the notion that it was Microsoft who was looking to buy into Netscape when they feared competition from the company and Microsoft that proposed the allocation of markets between the two. Barksdale insisted that the statements in the email did not represent the company’s views and hadn’t been discussed with him (he was due to take over as chief executive in a matter of weeks) or the company’s board. Barksdale also commented that he didn’t have any idea what Clark was thinking about in writing such an email. It later emerged that Warden had neglected to read the last line of the email which said, No one in my organization knows about this message, lending a certain degree of credence to Barksdale’s refutation of the correspondence as representative of company strategy. Barksdale also said that there may have been an investment proposal by Microsoft that pre-dated the email, although he had no real basis to make that claim. As for the later meeting between the two companies, Warden pressed Barksdale on whether Microsoft’s Dan Rosen actually proposed dividing the market, to which Barksdale responded that he never said he said it, but he intimated that in every way. Barksdale said lines were drawn around products with the understanding that Netscape stay out of the market for a Windows 95 browser. Barksdale admitted that he doesn’t know whether the words market division were actually used, but when asked by Warden whether the proposal was implicit as opposed to explicit, Barksdale responded, It was as explicit as you can get. Clark became the star of the day in absentia when Warden also produced a portion of his pre-trial deposition in which Clark testified that he decided to give away Netscape’s browser because Microsoft chief executive Bill Gates told him he planned to do the same thing. Clark said Gates told him at a conference in October of 1994 that he was going to give away the web browser in the operating system. Since it was before Netscape released the first beta of Navigator, Clark continued, I felt like we would have to [give away Navigator] in order to compete against Microsoft. The disclosure was intended to support Microsoft’s assertion that it had always planned to fold the browsing functionality into its operating system – something Netscape has maintained was done later to hinder its chances of competing with the software giant. Closer inspection of Clark’s testimony revealed that he insisted the company never actually gave its browser away, beyond a brief period during the beta. Netscape has consistently said it recently decided to make the product free in response to Microsoft’s decision to do the same. Warden also spent a considerable amount of time talking about the growing traffic and revenues of Netscape’s NetCenter portal site, something Netscape itself had made public in various documents cited by Warden. Netscape’s plans to distribute more than 100 million copies of its browser through the upcoming Netscape Everywhere initiative were also scrutinized, as were the partners in the marketing push. Barksdale himself admitted that 26 million copies of the browser have already been distributed this year. Warden pursued this line of questioning in his attempt to discredit Netscape’s claim that its distribution channels have been severely constricted by Microsoft’s actions. Barksdale will no doubt be on the stand for at least another full day, perhaps more, as government lawyers will be given the opportunity to redirect the questioning when Warden is finished with the witness.
