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

To: Gerald Walls who wrote (14248)	1/13/1999 4:45:00 PM
From: XiaoYao	Respond to of 74651

Microsoft Surprises DOJ''s Final Witness crn.com By Darryl K. Taft Washington, D.C. 2:24 PM EST Wed., Jan. 13, 1999 .............. Microsoft attacked the government's final witness' assertion that the software giant has foreclosed vital distribution channels to its browser software rivals, as the government prepared to rest its case Wednesday. Michael Lacovara, a Microsoft trial attorney, showed the government's expert economist witness, Massachusetts Institute of Technology professor Franklin Fisher, a series of pages from the Compaq Computer Corp. Web site that showed that Compaq includes Netscape Communications Corp.'s Communicator technology on all new machines the company ships. Lacovara, who said he came across the information while visiting the Compaq site Tuesday night, entered the documents from Compaq's "Product Showroom" into evidence to rebut Fisher's testimony that only one-half of 1 percent of all OEM machines are shipped with Netscape browser technology bundled. Fisher appeared somewhat surprised by the Compaq information and U.S. District Judge Thomas Penfield Jackson, who is presiding over the case, studied it closely. Lacovara asked Fisher why he had not visited any OEM Web sites or done such a "relatively simple analysis to see what's going on in the market." Lacovara also asked Fisher whether the fact that Compaq, one of the largest personal-computer manufacturers in the world, shipped machines with Netscape technology indicating that OEM shipments of Netscape's browser represents only one-half of 1 percent. Fisher replied that it did not, that the figure would be higher. Outside the court, David Boies, the government's lead attorney in the case, said that "whatever Compaq does in the middle of this trial does not affect" the anticompetitive behavior that led to the trial. He also said Compaq has not replaced Microsoft's Internet Explorer with Netscape Navigator. Boies said that because "a Microsoft front-line partner" decided to add Netscape to its mix of offerings does not affect the fact that Netscape has been effectively foreclosed from the OEM channel. In fact, in court Fisher said it may be too little too late, adding: "Microsoft succeeded in thwarting the Netscape threat. Netscape is no longer a big player; it may not matter any more." Mark Murray, responding to a question on the timing of Compaq's decision to bundle Netscape, said "computer manufacturers listen to the wants and needs of their customers. You'd have to ask Compaq." He added that Microsoft "has never placed any restrictions on any OEM's ability to ship Netscape Navigator." Murray also said Fisher "took a torpedo below the water line" with the Compaq information introduced in court today. In addition, Murray accused Fisher of "flip-flopping" on his definition of consumer harm. Tuesday, Fisher testified that Microsoft's inclusion of IE into its Windows operating system has not, on balance, hurt consumers. However, in court late Tuesday and Wednesday morning, Fisher further testified that Microsoft's actions have, in fact, harmed consumers by denying them freedom of choice, raising its rivals' costs, restricting innovation and other areas. Judge Jackson joined in Wednesday at the end of Fisher's testimony, asking who ultimately is a consumer. "Can you think of an OEM or ISP or ISV as a consumer?" he asked Fisher. Fisher replied that consumers, in an economist's view, are usually humans. However, he said there are customer firms that are consumers, "and harm to customer firms tends to be reflected in harm to their customers," who are the ultimate consumers. Fisher ended his testimony and was excused Wednesday morning. The government will rest its case Wednesday afternoon after some 400 documents are entered into evidence. The government also will play more excerpts of Microsoft Chairman Bill Gates' videotaped pretrial deposition testimony before resting its case