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Netscape browser claims attacked

A Microsoft attorney continues to scrutinize the written testimony of Jim Barksdale.

WASHINGTON--Microsoft continued to tear into the written testimony of Netscape Communications chief executive Jim Barksdale today, calling a key charge made by the CEO an "invention or imaginary concoction."

Throughout the proceedings--Barksdale's third day of cross-examination in federal court--Microsoft attorney John Warden attempted to cast doubt on a number of accusations Barksdale made in 127 pages of written direct testimony.

As tomorrow brings the first break in an antitrust trial precipitated by the Justice Department and 20 states, Barksdale's cross-examination is expected to wrap up on Monday. On Tuesday, the Justice Department said it intends to show videotaped testimony of Microsoft chief executive Bill Gates.

Barksdale's most explosive claim--and the one Warden spent the most time trying to debunk--is that Microsoft executives in June of 1995 promised Netscape handsome inducements if it would agree to divide the browser market.

Warden's questioning built on a December 1994 See related story:
Microsoft's holy war on Javaemail, introduced yesterday, in which then-Netscape chief executive Jim Clark asked Microsoft to consider taking an equity stake in his company, adding that Netscape has "never planned to compete with you." Warden today introduced more evidence suggesting that it was Netscape that sought a cooperative relationship with Microsoft.

In one exhibit, an email Barksdale sent to some of his top lieutenants on June 4, 1995, the CEO detailed a meeting he had with Microsoft two days earlier. "Attitude: very friendly, non-threatening," Barksdale wrote about the meeting, attended by Microsoft's Paul Maritz and Nathan Myhrvold. "Generally they want to find ways to work together. Under this pleasant-enough goal they were open to many suggestions, most of which they made."

Although not offering to buy or invest in Netscape, Microsoft promised other favors if the two companies could work together, according to Barksdale's account. Chief among them was the "early disclosure of 'standards or protocols' Netscape would need in writing code for Navigator and possibly other products."

Warden then referred to notes Netscape's Marc Andreessen took when he and other executives met with Microsoft in Mountain View on June 21. According to a transcript of the notes, Microsoft made a "threat that [Microsoft] will own the Win95 client market and that Netscape should stay away." Nowhere in the notes, however, is there any reference to a market allocation.

Finally, Warden introduced a July 28, 1995, letter written on Netscape's behalf by Gary Reback, a Silicon Valley attorney and well-known Microsoft critic. Barksdale said the letter, which was sent to a Justice Department (DOJ) attorney, provides a chronology of events to be used in investigating Microsoft. The chronology, written five weeks after the June 21 meeting, fails to mention anything about Microsoft's alleged proposal.

"I suggest to you that if you look at the whole record of events leading up to the June 21, 1995, meeting and then you look at [Reback's letter], the only fair conclusion that can be reached is that Marc Andreessen invented or imagined a proposal to divide markets and that you and your company have signed onto that invention or imaginary concoction in order to assist the Justice Department in the prosecution of this case," Warden said.

"I absolutely disagree," Barksdale protested. "That's absurd."

Today's testimony also focused on several legally and technically arcane topics, including the now-familiar debate concerning the relationship between Microsoft's Internet Explorer browser and the Windows operating systems.

The government and Netscape contend that the Web browser is an application that is separate from the operating system and that Microsoft folded Internet Explorer into Windows in an attempt to force Netscape out of business. Microsoft counters that it has always added new functions into its operating system, and the addition of browsing features into Windows is no different.

"Is there anything going on here other than a difference of opinion between Netscape and Microsoft over where the line is between the operating system and an application?" Warden asked.

"We felt strongly that the browser is an application and that the manufacturer of an operating system that controls 90 percent plus of the world's platforms that pulls the browser into the operating system has stepped across the line," Barksdale shot back.

A little later he added: "We're a little company; you're a big company with unlimited resources. You're gonna move the line anytime you want."

Still, Barksdale acknowledged a letter his attorney wrote which admits that browser files cannot be removed from Windows without damaging the operating system. Microsoft says the letter proves that even Netscape concedes that its Internet Explorer is an integral part of Windows.

Warden also introduced evidence designed to show that Netscape continued to thrive as a browser supplier even after Microsoft took aggressive steps to compete in the market, pointing to a memo Netscape executives sent to their sales team. The memo, titled "Silver Bullet Update" and dated October 2, 1997, claims that "Netscape's market share remains consistent at about 70 percent" and that "Netscape has 65 million users and growing (up from 40 million users last year)."

Outside the courtroom after the trial recessed for the week, David Boies, a private attorney the Justice Department hired to try their case, said that despite the day's events he believes Barksdale is holding up well.

"I think everybody in the court room finds him to be a powerful, credible witness." Despite the evidence that Microsoft introduced casting doubt on Barksdale's account of the June 1995 meeting, Boies reminded reporters that the Justice Department has two other independent accounts of the meeting, one from America Online and the other from Microsoft's own internal documents.

"I think it's pretty clear from three sets of notes ... what was going on," Boies said. "All three of those sets of notes are very convincing."

Barksdale's last day on the stand is likely to be Monday, when trial resumes. In court today, Warden said he expects to wrap up with the Netscape chief executive on his fourth day as a witness. Boies said he expected his redirect examination, which will follow, would last about two hours.

But the end of Warden's cross-examination may be against his will. In a conference yesterday in the chambers of presiding U.S. District Judge Thomas Penfield Jackson, a Netscape attorney asked that Warden end his cross-examination of Barksdale so he could return to California. Jackson then told Warden to finish his cross-examination by Monday, to which the Netscape attorney responded: "[That's a ]long time for a CEO to be away from his company," according to a transcript of the conference.

Separately, Boies said he would change the order of witnesses to be called at trial and would show videotaped testimony of Gates on next Tuesday and Thursday. AOL executive David Colburn will testify on Wednesday in place of Apple Computer's Avadis Tevanian, who had been scheduled as the second witness but is unavailable to testify later next week.