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Microsoft secretly paid for ads for Independent Institute

Microsoft paid for newspaper ads claiming to represent the independent views of 240 academic experts who said the government's antitrust case against the software giant was hurting consumers.

Microsoft secretly paid for newspaper ads by a California foundation that purported to present the independent views of 240 academic experts who said the U.S. government's antitrust case against the software giant was hurting consumers, according to a published report.

The New York Times quoted Microsoft spokesman Greg Shaw as acknowledging that the world's largest software company paid for the June newspaper ads.

The Times also cited internal documents of the Independent Institute of Oakland, California, showing that Microsoft paid a $153,868 bill to cover the cost of newspaper ads and air fare for the foundation's president, David Theroux, to travel to Washington for a press conference the day the ads ran in two major newspapers.

The full-page ads appeared in The Washington Post and the New York Times on June 2, the day the Microsoft trial resumed for its final month of testimony. Courtroom arguments on "proposed findings of fact" are scheduled for Tuesday before U.S. District Judge Thomas Penfield Jackson.

The Times said the documents were obtained from a Microsoft adversary "associated with the computer industry who refused to be further identified."

Asked about that bill, Theroux acknowledged that Microsoft paid for the ads but said it had no influence on the group's work. "The academic process we use is independent of sources of revenue."

At least one academic whose name was included in the ad disagreed. "He should have told us," Simon Hakim, a Temple University economist, said when told yesterday of the financing. "I would not have participated if I had known. It's not right to use people as a vehicle for special interests.?

The Independent Institute injected itself into the suit against Microsoft immediately after it was filed in May 1998. In a statement the group said, "Microsoft's rivals--chiefly Netscape--are attempting to use the Justice Department to compensate for their own failures. These include the failure to develop server-side software and not expanding their Web site into a general purpose search engine like Yahoo or Lycos."

News.com?s Scott Ard contributed to this report

Copyright 1999, Bloomberg L.P. All Rights Reserved.