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February 22, 1999

ROSEN CROSS-EXAM LEAVES MICROSOFT WITH A BLACK EYE

By CBR Staff Writer

By Dan Jones in Washington

Government lead attorney David Boies finished yesterday’s antitrust proceedings in dramatic style, cutting his final session of the day short with a curt, no more questions while Microsoft Corp’s Dan Rosen was still struggling to formulate his answer. Rosen, general manager of new technologies at Microsoft, had spent his time on the stand denying that there was competitive tension between Microsoft and Netscape Communications Corp from late 1994 to 1995 – the period of the alleged market split proposal – despite contemporary emails from Bill Gates, Paul Maritz and himself that seemed to contradict his statements. In less then three hours of cross-examination Boies sort to, and largely did, destroy Rosen’s credibility, before an impatient Judge Jackson and a laughing courtroom of press and spectators. The turning point in the examination was a memo that Rosen had written on the evening of May 15, 1995, entitled Internet Direct which was addressed to, among others, Bill Gates, Jim Allchin and Ben Slivka. Rosen said that the document had never been sent despite having a full set of addressees, that it was merely a draft and that the ‘Sent’ date related to the time he had saved the email. Asked about his statement in the memo that Microsoft’s goal should be to wrest leadership of client evolution from Netscape he said that in this case wrest meant take. He claimed that by client he meant the PPP, HTPP and TCP/IP internet connection protocols services that Microsoft built into Windows 95, ‘plumbing’ that Netscape had not wanted to undertake, preferring to concentrate purely on the browser. The statement in the memo that the threat of another company (Netscape has been mentioned by many) to use their internet WWW browser as evolution base could threaten a considerable portion of Microsoft’s future revenue, led Boies to suggest that the Microsoft man had believed Netscape to be a dangerous rival back in 1995. Rosen denied this, while an incredulous Judge Jackson shook his head in the background. However, the coup de grace came when Boies brought out a government document that showed the memo in question had been produced for trial purposes from the files of Ben Slivka, proving it had indeed been sent. Backtracking, Rosen allowed that, at the least I sent it to Mr Slivka. But he continued to deny that the document had been sent to Mr Gates or any of the other Microsoft senior executives. Rosen was also cross-examined on a document written by Bill Gates dated May 26, 1995 entitled The Internet Tidal Wave in which the CEO wrote of new competitor Netscape, they are pursuing a multi-platform strategy where they move the key API into the client to commoditize the underlying operating system. Rosen said of the statement, Bill was probably wrong…I probably had the better perspective. The trenchant Rosen continued to refute that he saw Netscape as a rival in 1994-5, claiming that in discussions with Netscape’s Jim Barksdale, the talk had been of partnership not competition.

The big split

In his written direct testimony, Rosen denied that there had ever been talk of splitting the internet client server market between Microsoft and Netscape, saying that any meetings had been run of the mill busi

ness affairs. Boies referred the witness to his account of events leading up to the June 21 1995 where alleged proposal occurred – pointing out discrepancies between the witnesses deposition and later written direct testimony. Rosen had claimed in his deposition that he had only met Netscape’s founder Jim Clark twice, under questioning he admitted that in fact they had met two or three times more, including once at Netscape’s headquarters. Rosen’s account of the June 21 meeting also differed from his deposition. In the written direct testimony he attributed a discussion on where the line was between applications and Windows 95 to Jim Barksdale, while in the deposition this is discussed by Microsoft’s Chris Jones and Thomas Reardon and there is no mention of Barksdale. Rosen claimed that his memory had been refreshed when preparing for trial and that he didn’t remember his deposition. Shortly after this Boies’ cross-examination drew to its aforementioned abrupt close.

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