By Nick Patience in Washington
Apple Computer Inc vice president Avadis Tevanian rounded off his time on the witness stand yesterday morning with the revelation that Apple believed Microsoft’s alleged threat to withdraw Office for the Macintosh could force Apple out of business and subsequently Apple agreed to make Internet Explorer the default browser on the Mac to stave off this threat. That was in mid-1997. Earlier that year, Microsoft had already tried to get IE as the Mac default browser but not quite succeeded, according to Tevanian. He claims Apple promised to bundle IE in exchange for a positive endorsement of Apple’s acquisition of Next Computer Inc, which eventually brought Steve Jobs, Next’s founder, back to Apple. Microsoft’s public approval was important because it was, and still is, the largest Mac independent software vendor (ISV). Apple duly bundled IE 3.0 in MacOS 8.0, but not as the default, much to the annoyance of Microsoft. When Redmond found out, it became upset, says Tevanian. In a letter dated July 3 1997 from then-Apple CEO Gil Amelio to Gates, and produced yesterday by government attorney Phil Malone, Amelio discusses the basis of the two companies’ extensive agreement that was to be announced the following month. Gates and Amelio had talked about it on the phone and the letter was a follow-up. Towards the en d of the letter Amelio addresses the issue of IE and its bundling with MacOS. He says I know this is a source of great irritation to you, but then stressed that Apple had to honor an earlier agreement with Netscape Communications Corp to bundle Navigator as well. Amelio claims it was simply an oversight that IE was not the default and provided a screen shot of the files on the CD which showed IE, with Navigator nowhere to be seen. In other words, Netscape was not the default either and wasn’t even easy for users to find. Amelio apologized to Gates for not making that clearer and resigned six days later. In a June 1997 email from Microsoft’s Ben Waldman to Gates, Waldman describes the threat to cancel Office as certainly the strongest bargaining position we have. The two companies worked things out and their widespread agreement was announced by Jobs at MacWorld in Boston in August last year to a mixture of boos and cheers from the Apple faithful. With that deal IE finally became the ‘true’ default browser on the Mac for the next five years. Tevanian was asked if the decision to make IE the d efault was crucial to Apple securing the deal with Microsoft, which involved Redmond investing $150m in the beleaguered company. Absolutely. It was a deal-breaker, he said, along with the decision to press ahead with Office for the Mac. Microsoft attorney Theodore Edelman, who had grilled Tevanian extensively last week, had one final go at him yesterday morning, alleging that the real deal-breaker for the Microsoft-Apple agreement was the settlement of a long-running patent license dispute between the two. He also pointed out that Tevanian was not present at a meeting between Compaq Computer Corp and Apple cited last week in which Compaq allegedly decided against licensing Apple’s QuickTime because Microsoft wanted it to adopt its multimedia technology instead, presumably in an attempt to undermine the credibility of Tevanian’s testimony, derived from exchanges with Apple executives who were at the meeting.
