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To: Gerald R. Lampton who wrote (22168)	12/16/1998 10:33:00 AM
From: Daniel Schuh	Respond to of 24154

Disney exec: MS a '1,000-pound gorilla' zdnet.com Thought you'd appreciate the headline, Gerald, being a long time advocate of the old "Gorilla" theory. The headline from the topic index page was more my style, "Disney: MS strong-armed us!". Say it ain't so, Mickey. Tuesday morning in federal court here the government showed excerpts from the videotaped depositions of Microsoft Chairman and Steve Wadsworth, an executive with the Walt Disney Co. They depicted Microsoft as unafraid of using its operating system power to threaten partners and competitors into changing their business practices. But it's what the customers want! Microsoft must be free to innovate! And nobody else but Microsoft! Wadsworth's deposition, taken in September as part of the government's ongoing antitrust case, centered on threats Microsoft allegedly made regarding the Disney channel on Microsoft's Active Desktop. As part of a deal between the two companies, Wadsworth said Microsoft placed serious restrictions on how Disney could promote or partner with Netscape Communications Corp. to develop a similar channel on Netscape's Netcaster and Netcenter services. In his deposition, Wadsworth stated that while the restrictive nature of the agreement was far more exclusive than Disney wanted, it felt it had to do a deal with Microsoft from a business perspective. The contract allowed Disney to create a channel to run on Netscape's services, but Disney could not promote it. Nor could it promote any Netscape technology or product in any way. Characterizing the negotiations with Microsoft as working with "a 1,000-pound gorilla of the industry," Wadsworth said that all along he felt uncomfortable working with Microsoft, claiming that "I felt like we were being, you know, leveraged." Wadsworth described how Microsoft had threatened to pull Disney's channel off Windows 98's Active Desktop because Disney had added some interactivity to its Netscape channel. Ultimately, to keep its relationship going with Microsoft, Disney agreed to make technical changes for the Netscape version, he said. Bill the Bully While the segments of Gates' videotaped deposition were similar to what has been shown in court already, in which an evasive witness dodges questions, today's clips focused on Microsoft's willingness to bully IBM. Department of Justice prosecutor David Boies asked Gates about an e-mail he received on March 23, 1994, entitled "IBM helps Lotus." In the e-mail, Joachim Kempin, senior vice president of Microsoft's OEM sales and marketing group, said he was "willing to do whatever it takes to kick them out, but strongly believe we need a WW hit team to attack IBM as a large account, whereby the OEM relationship should be used to apply some pressure." Boies grilled Gates about what "WW hit team" meant and if Microsoft in fact used its power in the OEM market to pressure IBM. Gates said the phrase stood for a "worldwide" sales person, and that he didn't remember anyone telling him or proposing that OEM pressure should be applied to IBM. Whereupon Boies said Kempin's message was actually a reply to e-mail from Gates himself asking Kempin to find out what was going on with IBM helping Lotus Development Corp. Asked again whether Kempin was actually replying to his questions, Gates retorted that he didn't remember receiving Kempin's e-mail. Premature senility? Or is Bill's memory clouded just because he never thought any of this stuff was very important? After that April '94 retreat with - what was his name? where they decided it "integrate IE", it was all humdrum business as usual. Bill was never much of a hands-on manager, anyway, right? Cheers, Dan.