By Nick Patience in Washington

Shortly after Microsoft Corp had got final approval for its 1994 consent decree agreement with the Department of Justice, Bill Gates apparently predicted at July a 1995 meeting with Intel Corp that this antitrust thing will blow over, and bragged that his company hadn’t changed its business practices at all. He did, however consider changing the length of time Microsoft retained its email archives, though it is not clear if he actually did anything about that. Gates was talking just after Microsoft and the DoJ – then cooperating – had got Judge Stanley Sporkin replaced with Judge Thomas Penfield Jackson, who approved the decree in 1994 and now resides over the case the DoJ brought against Microsoft for allegedly violating that agreement. Gates’ words were recorded at the meeting by Intel VP Steve McGeady who took the witness stand yesterday in Washington DC for his second day of testimony. Later on, under cross-examination by Microsoft attorney, McGeady claimed they were verbatim quotes from Gates, and his hand-written notes from meeting were produced as evidence.

Embrace, extend, extinguish tactic

McGeady spent the last 30 minutes or so under questioning by DoJ lead attorney David Boies, maintaining his allegations that Microsoft aimed to undermine both Java and HTML by making Windows-specific versions of them that would be incompatible with the rest of the industry. McGeady said it was a further example of Redmond’s embrace, extend, extinguish tactic he quoted Microsoft group VP Paul Maritz as saying during Monday’s testimony. McGeady, who is now VP of Intel’s content group and director of its internet health initiative, formed the Intel Architecture Labs (IAL) in 1991 with senior VP Ron Whittier and worked on such technologies as native signal processing (NSP), Indeo video compression and ProShare videoconferencing. Microsoft’s lawyers spent most of the afternoon trying to undermine McGeady’s contributions to Intel’s efforts and argued that people senior to him did not hold the same, seemingly anti- Microsoft views that Redmond alleges McGeady does. However, an email from Intel’s head of strategic partnerships, Alan Holzman to Intel executives documenting a meeting they held with Microsoft in April 1996, reveals that Microsoft was asking for exclusive access to Intel’s Java Virtual Machine and for the two to collaborate on a JVM for Windows. McGeady says IAL was proud of its JVM and had worked very hard to build a productive working relationship with Sun – even though Sun was still suspicious. Microsoft had already written its JVM from scratch, but wanted to tie Intel into Windows. Intel was also considering offering its VM work to Netscape Communications Corp, which understandably worried Microsoft greatly.

Similarities to Sun case

In another email, this time from Paul Maritz to Gates and other senior Microsoft figures, talking about a meeting with Intel the day before, Maritz says that Sun and Java are the biggest issue as far as Intel is concerned. He says that while Microsoft should try and get Intel involved in its work to optimize Java for Windows, I fear McGeady will try to obviate this (unfortunately he has more IQ than most there), said Maritz, giving McGeady a backhanded compliment. McGeady said they [Microsoft] told us that we had no business writing software; they owned the software down to the metal. That was Microsoft’s position. He said that as JVM had to returned to Sun as part of the Java licensing agreement, Intel did not want to be seen submitting one that only ran on Windows, therefore annoying Sun. Sun sued Microsoft in October last year for violating the terms of the Java licensing agreement in just such a manner. McGeady told a similar story about HTML yesterday. In a September 1995 meeting between the two companies, Paul Maritz, while explaining Microsoft’s internet strategy to the Intel executives said the company’s plan was to kill HTML by extending it, according to McGeady’s handwritten notes from the time.

Balkanize the internet community

As we pointed out yesterday, Microsoft supports a different version of Dynamic HTML in its browser than the one supported by Netscape. McGeady said Microsoft said it would add extensions such as its rich text format (RTF) and in doing so would balkanize the internet community, said McGeady. Microsoft attorney, Steve Holley spent the rest of the day trying to portray a close relationship between Microsoft and Intel by implying that McGeady was not the authority he claimed to be within Intel and was resentful because some of his work had not been adopted fully by either company. McGeady repeatedly batted back Holley’s assertions that a Wintel alliance was the be-all and end-all for the PC industry, by arguing that there are many other companies involved, such as the PC makers themselves and makers of peripherals and add-in cards. And Intel had to maintain as good a relationship as possible with them all, said McGeady. McGeady still reports to Whittier, the senior VP and general manager of the content group at Intel, and as such Whittier would know more than McGeady about the relationship with Microsoft, Holley argued. No, I would not agree with that assumption, retorted McGeady, who went on to disagree with some statements made by Whittier in video testimony Holley played to the court. McGeady claimed that while Whittier is his senior, Mr Whittier’s memory isn’t always as good as the rest of ours.

Lack of NT support

Later, outside the court, Microsoft spokesperson Mark Murray said the court would hear from other Intel executives, adding that the facts have shown that he [McGeady] does not speak for Intel as a company. Holley returned to the issue of Intel’s native signal processing technology (NSP) and its alleged killing-off by Intel at Microsoft’s request. Holley claimed that the reason it was not adopted was that when Microsoft launched Windows 95 in August 1995, the technologies that comprised NSP only supported Windows 3.1. McGeady didn’t deny that, but argued that was because the release date for Windows 95 had slipped so often, Intel didn’t believe it would come out until later that year at the earliest and so concentrated its efforts on Windows 3.1. Anyway, said McGeady, Intel had NSP running on a beta of Windows 95, but that was not enough for Microsoft. Intel duly killed NSP as a marketing concept, though some of the technology, including the telephony API (TAPI) and automatic power management (APM) have subsequently been included in Windows. Holley cited a June 1995 Microsoft memo summarizing its evaluation of NSP. These included lack of NT support, the introduction of another scheduler and lack of support for plug and play. McGeady countered that back then, NT was not considered a desktop OS and had no multimedia support anyhow, and when Holley started getting into detailed questions about schedulers on microprocessors, McGeady said you’re using a term of computer science that I’m not sure you understand. Undeterred, Holley probed McGeady from various angles, arguing that Intel engages in the same monopolistic practices that DoJ is alleging against Microsoft. However, he only succeeded in confusing many in the court with very technical questions and has yet to undermine the credibility of McGeady in most observer’s eyes. His cross-examination will continue when the court resumes Thursday morning.

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