I was worried about the INTUIT testimony affect on the stock. I guess MSFT does not want the media to go ahead with a one sided story prior to getting its side. I have noticed that MSFT is much more interested in public relations than in the past. They learned the hard way. It might not hurt the stock on January 4/5 as I had suspected it would.
Look at the capitalized portions.
I think the signal is getting to judge. That is, these competitors are just using the courts (and Judge Jackson) for their own self interests and has nothing (or little) to do with abuse of monopoly power. I bet Judge Jackson won't like that. --- More confident about a MSFT win in this case.
Company Press Release
SOURCE: Microsoft Corporation
Partial Microsoft Response to Written Testimony By Government Witness William Harris
WASHINGTON, Dec. 29 /PRNewswire/ -- Microsoft Corporation released the following:
Under the procedure established by the Court, the written statement of each of the government's witnesses is released to the public and media on the afternoon preceding their testimony. Today, the written testimony of Mr. William Harris has been released. It is important to note that this written testimony has not yet been admitted into evidence, and that significant portions of this testimony may be ruled inadmissible.
Nevertheless, we know that reporters may feel compelled to file stories based on the release of Mr. Harris' written testimony, so Microsoft is providing these brief, top-level responses. Obviously, the real story will occur in Court during Microsoft's cross-examination of the witness, as well as during the government's re-direct examination and Microsoft's re-cross, if any. The information and responses outlined in this document are NOT, by any means, Microsoft's full response to the testimony, but they do serve to set the record straight on some of the issues prior to a more detailed response via cross examination.
DESPITE MR. HARRIS' CLAIMS, INTUIT CONTINUES TO BE A SUCCESSFUL SOFTWARE DEVELOPER WITH BROAD DISTRIBUTION IN THE MARKETPLACE. Mr. Harris' suggestion that Intuit is somehow being harmed by Microsoft does not hold up to scrutiny. Intuit is the manufacturer of the leading software for personal finance, small business accounting, and personal and small business tax preparation and filing. According to independent analysts, there are approximately twice as many Quicken users in the market than there are people using Microsoft Money. In recent months, several of Microsoft's products in some of these categories have begun to win reviews based on their features and performance. Microsoft is competing on the basis of technology and value, but Intuit seems to be trying to use the government and the courts to tip the scales against Microsoft.
MR. HARRIS' TESTIMONY CONSISTS LARGELY OF THE SPECULATION OF A MICROSOFT COMPETITOR TRYING TO ADVANCE ITS OWN BUSINESS INTERESTS. Mr. Harris' testimony is rife with rank speculations, hypothetical situations and attempts at complex legal, technical and economic analysis by a witness who is neither an attorney, a software developer, nor an economist. The only ''fact'' that comes out of Mr. Harris' testimony is that Intuit wishes to use its testimony as an attempt to circumvent competition in the marketplace by using the government and the courts against Microsoft. Of the nearly 50 pages of Mr. Harris' testimony, only 16 pages address relevant interactions with Microsoft; the rest is speculation or half-baked analyses.
Mr. Harris' testimony further demonstrates that the government's case is without merit, and has degenerated to a state where any competitor with a business grudge can come to Washington and use the DOJ as a weapon.
CONTRARY TO MR. HARRIS' TESTIMONY, INTUIT CHOSE MICROSOFT'S INTERNET EXPLORER TECHNOLOGIES BECAUSE OUR MODULAR ARCHITECTURE PERMITTED INTUIT TO INTEGRATE INTERNET FUNCTIONALITY INTO INTUIT'S PRODUCTS -- NETSCAPE DID NOT HAVE COMPARABLE TECHNOLOGY. The evidence on this point is crystal clear. Netscape's own documents show without a doubt that Netscape did not develop the modular technology that Intuit needed, despite Intuit asking repeatedly for component features over nearly a year. E-mails between Intuit and Netscape tell a very clear story. In the final analysis, Intuit's technical staff recommended that Intuit use Microsoft's Internet Explorer technologies because they met Intuit's technical needs and provided the best solution for Intuit's customers (emphasis added). In fact, Mr. Harris admits in paragraph 78 of his testimony that ''[t]he recommendation from our technical team was to use the Internet Explorer.'' He adds that he resisted these recommendations because he preferred not want to work with a competitor such as Microsoft.
MR. HARRIS' TESTIMONY IS NOT FOCUSED ON FACTS. In another example of Mr. Harris' rampant speculation, he claims that Intuit decided to agree to Microsoft's proposed acquisition of the company in 1994 because Intuit was concerned that Microsoft would integrate personal finance software into Windows. Microsoft made no such announcements at the time and has made none since. Harris also spends a good deal of time talking about a technology called ''WinATM,'' which was an idea that never made it off of the drawing board. To this day, Microsoft has not added personal finance functionality to Windows, and Intuit continues to thrive as the leading developer of personal finance software.
MR. HARRIS' CLAIMS ABOUT INTUIT'S ACTIVE DESKTOP AGREEMENT IGNORE CERTAIN CRITICAL FACTS. Far from foreclosing on a Netscape-Intuit deal, Mr. Harris admits in paragraph 75 of his testimony that Intuit's Active Desktop Agreement with Microsoft ''permit[ted] Intuit to allow Netscape to distribute Intuit's content.'' He adds, however, that the agreement ''made it uneconomic to do so.'' What Mr. Harris overlooks is that other prominent Microsoft partners such as Disney and CBS Sportsline who had comparable deals to Intuit's apparently found it perfectly ''economic'' to enter into agreements with Netscape to distribute their content, because they did exactly that.
In any event, Microsoft later waived the promotional and distribution restrictions in Intuit's agreement that Mr. Harris complains about, and yet Intuit still has not entered into any significant promotional or distribution arrangements with Netscape, nine months later.
MR HARRIS' DISCUSSION OF REMEDIES IS INAPPROPRIATE AND ILL-INFORMED. Mr. Harris spends more than 10 percent of his testimony describing a litany of ''hypothetical'' behavior, which Microsoft is not involved in, that he claims warrant certain exceedingly vague remedies. This portion of his testimony also contains a legal analysis of the 1995 consent decree, an economic analysis of supposed ''network effects'' in the software industry and an entirely new and irrelevant concept Mr. Harris cooked up on his own -- ''operating system neutrality.''
MR. HARRIS WANTS THE GOVERNMENT TO IMPOSE AN UNFAIR DOUBLE STANDARD ON MICROSOFT. Mr. Harris wants to have his cake and eat it too. It's clear from this testimony that Intuit wants the government to repeal the laws of competition for Intuit. As the dominant manufacturer for personal finance, tax and small business accounting software, Intuit apparently wants the government to guarantee it a permanent lead in the marketplace without actually competing.
Contrary to Mr. Harris' claims, the Windows operating system has never been used in an anti-competitive fashion. In fact, the work that Microsoft does to evangelize new technologies and provide developers such as Intuit, which is today worth over $3.5B, with the tools they need to write great applications for millions of consumers has helped create and grow an enormously successful industry comprised of more than 45,000 software companies. The high-tech industry in the United States is helping to drive the American economy forward into the 21st century.
SOURCE: Microsoft Corporation
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