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To: Harry Sharp who wrote (16101)	1/14/1998 10:21:00 PM
From: Gerald R. Lampton	Respond to of 24154

crn.com Microsoft's Chase: No Talks With DOJ By Steven Burke & Barbara Darrow Boston 6:40 p.m. EST Thurs., Jan.8, 1998 .............. Microsoft Corp. Vice President Brad Chase said there are no talks going on aimed at settling the legal dispute between the software giant and the Department of Justice. "We'd always be very open minded and try very hard to be reasonable, but there aren't really any talks going on now," said Chase, who is on the road communicating Microsoft's position. Chase heads up developer relations and marketing, for the company's applications and Internet client group. "It is a hard problem because there are some very important principles at stake... the principle of us integrating new functionality into the operating system." U.S. District Court Judge Thomas Penfield Jackson will hold a hearing next Tuesday to determine whether Microsoft should be held in contempt for violating an injunction he issued last month demanding that the company immediately separate its Internet Explorer Web browser from the Windows operating system. Chase maintained that the Judge went beyond the issue of the consent decree. "That is one of the things we are trying to clarify through the legal system," he said. Chase said integrating new features into the company's products is "the key not only to our business, but to practically every business in the American economy... We want the ability to improve our products for customers." "If you think about the PC itself, it is the integration of lots of different things," said Chase. "That's what makes it really useful..I used to get a CD ROM drive separately. I used to at one point get hard disks separately... But it is the integration that really provides much of the value for customers." "It sounds silly, but I like to make the very apropos analogy about chocolate chip cookies," said Chase. "If you think about it, the value of the chocolate chip cookie is that integration...You take flour, water, and sugar and vanilla and brown sugar, and chocolate chips. You could get all those things separately, but the value comes from integrating them altogether and baking them in the oven. In many ways in an operating system, we are trying to do a lot of similar things." Microsoft responded to the court injunction by offering a nearly two-and-a-half-year-old version of Windows 95 without Internet Explorer. Furthermore, Microsoft said VARs and PC makers wanting to uninstall Internet Explorer must strip out the browser files themselves. At a hearing on Dec. 19, Jackson said it took him only 90 seconds to uninstall Internet Explorer from Windows 95. "I would claim there is no authority under the consent decree for someone to say take the IE icon off the desktop," said Chase of the judge's position. "The implications for the industry are pretty significant." For example, he said, if Microsoft is forced to remove the IE icon off the Windows desktop could the Department of Justice then tell the company to take added functionality coming down the road, such as voice recognition, off the desktop?. Chase stressed that IE has been bundled with Windows95 since the product first shipped in August 1995 and that Microsoft only started gaining share in the browser arena when the company produced stronger products such as IE 3.0 and IE 4.0. "If we include something with the operating system that adds value for them (customers)... through integration then they are going to use it. If we add something to the OS that doesn't add value then they are not going to use it and it may hurt the success of the operating system."

To: Harry Sharp who wrote (16101)	1/14/1998 10:31:00 PM
From: Gerald R. Lampton	Read Replies (4) \| Respond to of 24154

>Judge rules against Microsoft on Lessig issue Well, this has got to be a major defeat for Microsoft. It's pretty clear they have pissed off the judge, and they cannot have made any points with Lessig, either. But I still think the DOJ has constructed a house of cards on a foundation of sand. How bad the district court judge and Lessig look on appeal will depend on how far out on a limb Microsoft can induce the judge to go. The further out they go, the worse they'll look.