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Technology Stocks : MSFT (Microsoft) vs. DOJ (Department of Justice)
MSFT 517.81-1.5%Oct 31 9:30 AM EST

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To: Doug Fowler who wrote (157)2/5/1999 2:02:00 PM
From: Rusty Johnson   of 185
 
Microsoft's Sequel: This Time It Works, Sort Of

A new video is shown in court, but it can't back up all the claims Microsoft originally made

Business Week Online

After two days of embarrassing setbacks over errors in key video evidence, it seemed almost anticlimactic when
Microsoft got a chance to come back to court and get it right. On Thursday, Feb. 4, the company showed a
70-minute videotaped demonstration that, while offering little new, at least made some of Microsoft's points -- but
perhaps not one of the most important ones -- without glaring mistakes.

The demonstration was intended to prove that Internet browsing technology could not be removed from Windows
98, contrary to earlier testimony by government witness Edward W. Felten of Princeton University, who wrote a
program designed to show how easy it is to eliminate Web browsing from Windows. Microsoft's video seemed to
show that Felten's software removed browsing functionality only from part of the system, while it remained in
other parts. Also, the tape indicated that some software applications would not work when Felten's program was
loaded. The issue is important because Microsoft contends that the Windows operating system and its Internet
browser are not separate products, as the Justice Dept. argues, but a single product with blended code that offers
special benefits to consumers.

However, during cross-examination, Justice lead litigator David Boies noted that the demonstration didn't attempt
to prove that Felten's software program slowed the performance of Windows, as Microsoft's original video
claimed to show. Several errors in the original tape on the performance issue a day earlier caused U.S. District
Judge Thomas Penfield Jackson to comment that the problems raised "doubts about the reliability" of the
demonstration. James Allchin, a Microsoft senior vice-president, who performed the redo, told Boies today that he
was unable to recreate the performance video because he needed a special laboratory.

Boies also noted during cross-examination that it was logical that applications that depended on browsing would
not work in a machine installed with Felten's software since the program removed most of the Web features.

STUDIO AUDIENCE. The new videotaped demonstration was made at 10:40 p.m. Feb. 3 in the Washington
(D.C.) offices of Sullivan & Cromwell. Several government officials, plus Felten and a couple of his assistants,
viewed the taping. Allchin, the star of the demo, said that he had bought several IBM Thinkpads with Windows 98
preinstalled earlier in the evening. The camera ran continuously, except for a tape change, so the viewers --
particularly the judge -- would be assured that there was no tinkering with the experiment. That meant courtroom
watchers had the pleasure of sitting through a long bootup sequence and several failed attempts by Allchin to get a
phone connection.

During the demonstration, Allchin showed that while the browser icon had been deleted from several places, he
could still get onto Internet sites, such as Amazon.com, through backdoor means. He was unable to get into the
Windows update page, a feature that enables consumers to get software upgrades from Microsoft through the
Internet. The computer showed "error" signals when Allchin tried to download Money 99, a Microsoft software
application.

The demonstration was marked by some self-deprecating humor from Allchin, who experienced two harrowing
days on the witness stand when the videotape demonstrations he had supervised imploded. When he was about to
install a piece of software, he prompted courtroom laughter when he said, "I don't mind a little risk," with a slight
roll of his eyes. And when the Money software personal page asked for his birthdate, he said, "Apparently, I was
born yesterday." The judge laughed, too.

In the end, the demonstration offered little new. Felten said in court that his software did not remove all browsing
functionality, but he noted that there was no technological reason for Microsoft to organize its browser code the
way it did.

By Susan Garland in Washington
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