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AOL memos released in trial

Internal memos from the online giant are being used to bolster the DOJ's case in its antitrust lawsuit against Microsoft.

Internal memos from America Online are being used to bolster the Justice Department's case in its antitrust lawsuit against Microsoft.

The documents, obtained by subpoena, provide evidence that Microsoft may have tried to stifle competition in the Internet browser market by threatening rival Netscape Communications. Microsoft denies any wrongdoing.

The memos were presented today in opening arguments by Justice Department (DOJ) lawyers, capturing center stage during the trial's opening day. (See related story).

Written by an AOL executive, one memo outlines an account of Microsoft's threatening Netscape during a meeting between the two companies--which are No. 1 and No. 2 in the browser space--in 1995.

A Netscape engineer claimed Microsoft would "crush" Netscape if it did not cooperate, Microsoft's day in court according to the memo, which cites conversations between the Netscape engineer and the AOL executive who authored the memo a day after the meeting.

The memo also states that Gates posed a question to AOL about how much Microsoft needs to pay to "screw" Netscape, and then told AOL executives, "This is your lucky day."

The subpoenaed documents further detail Microsoft's alleged plan to woo AOL so that the online giant would license its Internet Explorer browser instead of Netscape's Navigator. They show that Microsoft offered to bundle AOL into its Windows 95 operating system and purchase millions of dollars in advertising--if AOL agreed to drop Netscape as its primary Web browser.

The evidence is significant because--if true--it could undermine Microsoft's allegations that Netscape had fabricated many of its unfair competition accusations against the Redmond, Washington, software giant.

Microsoft had planned to release friendly email correspondences between the two companies to show prosecutors a more positive relationship between them.

Reuters contributed to this report.