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Technology Stocks : MSFT (Microsoft) vs. DOJ (Department of Justice) -- Ignore unavailable to you. Want to Upgrade?

To: Doug Fowler who wrote (157)	2/5/1999 2:02:00 PM
From: Rusty Johnson	Respond to of 185

Microsoft's Sequel: This Time It Works, Sort Of A new video is shown in court, but it can't back up all the claims Microsoft originally made Business Week Online After two days of embarrassing setbacks over errors in key video evidence, it seemed almost anticlimactic when Microsoft got a chance to come back to court and get it right. On Thursday, Feb. 4, the company showed a 70-minute videotaped demonstration that, while offering little new, at least made some of Microsoft's points -- but perhaps not one of the most important ones -- without glaring mistakes. The demonstration was intended to prove that Internet browsing technology could not be removed from Windows 98, contrary to earlier testimony by government witness Edward W. Felten of Princeton University, who wrote a program designed to show how easy it is to eliminate Web browsing from Windows. Microsoft's video seemed to show that Felten's software removed browsing functionality only from part of the system, while it remained in other parts. Also, the tape indicated that some software applications would not work when Felten's program was loaded. The issue is important because Microsoft contends that the Windows operating system and its Internet browser are not separate products, as the Justice Dept. argues, but a single product with blended code that offers special benefits to consumers. However, during cross-examination, Justice lead litigator David Boies noted that the demonstration didn't attempt to prove that Felten's software program slowed the performance of Windows, as Microsoft's original video claimed to show. Several errors in the original tape on the performance issue a day earlier caused U.S. District Judge Thomas Penfield Jackson to comment that the problems raised "doubts about the reliability" of the demonstration. James Allchin, a Microsoft senior vice-president, who performed the redo, told Boies today that he was unable to recreate the performance video because he needed a special laboratory. Boies also noted during cross-examination that it was logical that applications that depended on browsing would not work in a machine installed with Felten's software since the program removed most of the Web features. STUDIO AUDIENCE. The new videotaped demonstration was made at 10:40 p.m. Feb. 3 in the Washington (D.C.) offices of Sullivan & Cromwell. Several government officials, plus Felten and a couple of his assistants, viewed the taping. Allchin, the star of the demo, said that he had bought several IBM Thinkpads with Windows 98 preinstalled earlier in the evening. The camera ran continuously, except for a tape change, so the viewers -- particularly the judge -- would be assured that there was no tinkering with the experiment. That meant courtroom watchers had the pleasure of sitting through a long bootup sequence and several failed attempts by Allchin to get a phone connection. During the demonstration, Allchin showed that while the browser icon had been deleted from several places, he could still get onto Internet sites, such as Amazon.com, through backdoor means. He was unable to get into the Windows update page, a feature that enables consumers to get software upgrades from Microsoft through the Internet. The computer showed "error" signals when Allchin tried to download Money 99, a Microsoft software application. The demonstration was marked by some self-deprecating humor from Allchin, who experienced two harrowing days on the witness stand when the videotape demonstrations he had supervised imploded. When he was about to install a piece of software, he prompted courtroom laughter when he said, "I don't mind a little risk," with a slight roll of his eyes. And when the Money software personal page asked for his birthdate, he said, "Apparently, I was born yesterday." The judge laughed, too. In the end, the demonstration offered little new. Felten said in court that his software did not remove all browsing functionality, but he noted that there was no technological reason for Microsoft to organize its browser code the way it did. By Susan Garland in Washington

To: Doug Fowler who wrote (157)	2/5/1999 2:06:00 PM
From: Rusty Johnson	Read Replies (1) \| Respond to of 185

Buggy Video and More, Microsoft Is Going Backward Justice spotlights more tape discrepancies and sows new doubts about Redmond's motives Business Week Online It was another no-good, very bad day in court for Microsoft Corp. on Feb. 3. Fresh on the heels of embarrassingly confused videotape evidence that left Microsoft's lawyers in a lurch, the Justice Dept. seemed to score more points on two critical issues in its antitrust case. By the end of the day, the government had raised new doubts about Microsoft's reasons for merging browser technology into its Windows 98 operating system, as well as about that videotape presented in court on Feb. 2 that company lawyers hoped would be a key part of their defense. With Microsoft Senior Vice-President James E. Allchin back on the stand, the government introduced a series of Microsoft E-mails that seemed to bolster its contention that beating browser rival Netscape was a key consideration in the decision to integrate Microsoft's browser, Internet Explorer, into Windows 98. In a Mar. 21, 1997, E-mail Allchin received from a colleague named Jonathan Roberts, Roberts said Internet Explorer has a far better chance of besting Netscape if it's integrated into Windows. "An integrated browser makes Netscape a nonissue -- a superfluous product for all but the most committed Netscape user," Roberts said. Allchin himself wrote that integration would be critical in the competition with Netscape. In early 1997, he wrote that he was troubled by Microsoft's strategy of simply copying Netscape features and predicted that such a path was doomed to failure. "I am convinced we have to use Windows," he wrote. "It's the one thing they don't have." The most critical issue, he said, was to include an integrated browser on shipments to computer makers so that "Netscape never gets a chance on these systems." The company has insisted that it merged the two programs to benefit consumers. And it says it came up with the idea as early as 1993, before Netscape was founded. FASTER "FELTENIZED"? The government also is trying to show that the operating system and browser could be sold separately and that there's no benefit to merging them. A government consultant, Edward W. Felten of Princeton University, wrote a software program intended to demonstrate that the two could be separated even at this late date. But Microsoft countered with a videotape demonstration of a "Feltenized" computer that was supposed to show that the Felten program degraded the operation of Windows. But on cross-examination on Feb. 3, Justice lawyer David Boies challenged the accuracy of the videotaped demonstration. And at the noon recess on Feb. 3, government experts scrutinized the tape more closely and alleged even more discrepancies. At times on the videotape, an icon was present and at other times it disappeared. The title bar at the top of the computer screen also showed different words at different times. At one point, instead of degrading Windows, it seemed as if the computer with the Felten program actually worked faster. Eventually, Allchin admitted that more than one computer was used during the videotaping, though the tape seemed designed to leave the impression that it showed one continuous demonstration with one computer. The Internet Explorer segment that seemed to run more slowly than a Feltenized computer actually was a Feltenized computer, Microsoft officials said, but they had run Prodigy, which changed the wording on the text bar. There was no indication on the tape that Prodigy had been used. "We make very good software," sighed Microsoft Senior Vice-President for Law and Corporate Affairs William Neukom. "We don't make a very good tape." Judge Thomas Penfield Jackson said Microsoft's actions "cast doubt on the reliability" of the tape. The company said it would make another demonstration tape with government officials present, and it asked that the new tape be played in court on Thursday, Feb. 4. While MSVideo 1.0 was clearly a flop, Microsoft is banking heavily that MSVideo 2.0 will save the day. By Stan Crock in Washington