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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Teflon who wrote (24754)	6/23/1999 4:06:00 PM
From: Jim Lamb	Respond to of 74651

Microsoft Expert Faces Tough Questions Full Coverage Microsoft Antitrust Trial By David Lawsky WASHINGTON (Reuters) - Microsoft Corp.'s (Nasdaq:MSFT - news) economic expert faced tough cross-examination at the software giant's antitrust trial Wednesday, on everything from his hourly fee to errors in a chart he used for evidence. Richard Schmalensee, dean of the Massachusetts Institute of Technology's Sloan School of Management and the expert economic witness for Microsoft, first testified that he could not remember how much Microsoft had paid him for his services. After repeated questions from a government lawyer, Schmalensee, the last of 26 witnesses in the trial, finally said Microsoft paid him more than $100,000 over seven years. Under yet more questioning, he then said Microsoft paid him more than $250,000 in the last two years and his consulting firm threw in an extra $300,000 bonus. Schmalensee, who charges $800 an hour for consulting work, said that he may have made even more. In the cross-examination, government lawyer David Boies also tried to demonstrate that Schmalensee lacked command of the subjects he had testified on for Microsoft. The Justice Department and 19 states contend that Microsoft holds monopoly power in the operating system for personal computers and illegally used that power to compete unfairly with Netscape Communications Corp. Netscape has since been bought by America Online Inc. (NYSE:AOL - news) . The government says that Microsoft won the ''browser war,'' forcing its Internet Explorer Web on computer makers, and putting Netscape's browser at a disadvantage. Schmalensee said that the browser war is far from over, and under questioning from a Microsoft lawyer had shown two charts that illustrated Netscape's healthy share of the browser market. Boies showed the charts and asked Schmalensee: ''Did you make a visual inspection of these documents to see that they made sense?'' Schmalensee said, ''As I sit here, a comparison with the one on the right suggests there is a difficulty.'' ''They cannot be reconciled,'' Boies said. The first chart showed that Netscape's market was on the upswing, and that from six to seven million people had obtained the program with a new computers between the spring of 1998 and spring 1999. The next chart, however, showed that during the same period the average number of people was more than 8 million. Schmalensee had also testified that Microsoft's Windows program was potentially under siege from a host of new programs that could run on the Web, no matter what the underlying operating system. But he acknowledged under cross-examination that he had done no study, had no projections of numbers and no knowledge about the authors or details of the programs he cited in his testimony. The witness stage of the trial is expected to end this week, which is to be followed by a recess of about a month before summing up.