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DOJ ready for turn, may see Gates

As Microsoft readies more cross-examination of Jim Barksdale, prosecutors prepare for their turn with the Netscape CEO--and possibly Bill Gates.

WASHINGTON--As Microsoft prepares for what is likely to be the last day of its painstaking cross-examination of Jim Barksdale, government prosecutors have hinted at the direction they intend to take when it is their turn to "redirect" questions to the Netscape Communications' chief Tuesday.

Both sides also continued to spar over Tuesday's planned showing of videotaped testimony of Microsoft chairman and chief executive Bill Gates.

For three straight days last week, Microsoft attorney John Warden poured through the 127 pages of written testimony submitted by Barksdale, the lead-off witness in the historic antitrust lawsuit filed by the Justice Department (DOJ) and 20 states. Among the points Warden attempted to drive home was that Netscape's browser business continued to thrive even after Microsoft gave away the rival Internet Explorer and signed controversial licensing contracts with Internet service providers and content companies.

Tomorrow, Microsoft is expected to grill Barksdale for a fourth and final day. The government will then redirect questions for part of Tuesday before moving on to Gates's deposition, a government attorney said last Thursday.

Late Friday, the government released some 150 pages of exhibits attached to Barksdale's direct testimony. In email after email, Netscape executives and sales representatives learn that, despite the popularity of their Navigator browser, licensees are choosing Microsoft's product because it is free and because, in many cases, the software giant offered valuable inducements in exchange for an exclusive relationship.

"We have ceased distribution of Netscape," the chief executive of ISP Scescape Internet informs a Netscape representative in a September 1997 email. "Your product is excellent but totally lacking in marketing support, and we could never justify the $20 setup cost when Microsoft will fly a blimp with our name on it for free."

Other internal Netscape emails detail other handsome incentive Microsoft allegedly used to persuade distributors not to feature or promote Navigator. For instance, Microsoft promised Dutch ISP Planet Internet a $400,000 marketing fund if it "would not purchase any [software] from Netscape," a Netscape employee reported back to company executives in an email.

In another case, Microsoft offered Information Technology supplier Intelligent Electronics $100,000 and free products if would run its online commerce site using Microsoft's BackOffice server suite and Internet Explorer exclusively.

The exhibits are designed to bolster Barksdale's claim that Microsoft attempted to cut off Netscape's air supply by eliminating sources of revenue. The evidence is in stark contrast to exhibits Warden introduced last week that show distribution of Navigator continuing to "skyrocket" and Netscape managers making rosy projections. Microsoft claims the evidence proves Netscape was never harmed by Microsoft's browser strategy, a necessary showing for the government to prevail in the case.

For three days, Microsoft has attempted to deflate Barksdale's claims, which also include the explosive allegation that Microsoft proposed that the two companies divide the browser market. In releasing the exhibits and moving up the scheduled showing of Gates's deposition, the government appears to be trying to put the heat back on Microsoft.

In a filing last week, Microsoft said it would be improper for the government to show extended portions of the videotape unless it counts as one of the 12 witnesses the government is allowed to call during the trial, which is scheduled to last another seven to nine weeks. U.S. District Judge Thomas Penfield Jackson placed strict limits on the number of witnesses each side may call in order to expedite the trial.

"The government is trying to get extra witnesses by putting Bill's deposition on," Microsoft spokesman Jim Cullinan said. But Justice Department spokeswoman Gina Talamona said the government planned to move forward with its plans. Jackson has yet to rule on the issue.

Once Gates's deposition is shown in court, those portions will simultaneously be released to the public, making them likely fodder for Internet broadcasters and television news shows. RealNetworks, which testified against Microsoft at a recent Senate Judiciary Committee hearing, plans to make the deposition available on its Web site, according to the Seattle Times.

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