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Technology Stocks : MSFT Internet Explorer vs. NSCP Navigator -- Ignore unavailable to you. Want to Upgrade?

To: Rusty Johnson who wrote (22631)	2/9/1999 11:01:00 AM
From: Gerald R. Lampton	Respond to of 24154

Federal Filings Newswires Copyright (c) 1999, Dow Jones & Company, Inc. Monday, February 8, 1999 MSFT: NSCP Loss Of Browser Mkt Shr Its Own Fault-2 FORM TYPE: LEGAL ISSUER: FEDERAL FILINGS BUSINESS NEWS SYMBOL: X.FFI WASHINGTON (FFBN) -- In written testimony released in the government antitrust case against Microsoft Corp. (MSFT) this morning, Microsoft vice president Cameron Myhrvold stated that the software giant "came from behind" in the Internet service provider (ISP) market because of the "technical superiority of Internet Explorer 3.0" and because the company "catered to smaller ISPs that Netscape [Netscape Communications Corp. (NSCP)] had ignored." Myhrvold further contended that "[a]ny erosion in Netscape's usage share of Web browsing software can more plausibly be explained by its own poor business decisions and its insensitivity to the need of ISPs, especially smaller ISPs." Myhrvold disagreed with the government's contention that Microsoft's agreements with certain ISPs prevented those ISPs from distributing and promoting Netscape's web browser. "Contrary to the government's allegations in this case, the ISPs were not required to--and indeed did not--distribute Internet Explorer exclusively. In fact, more than half of the ISPs featured in Microsoft's Referral Server are also featured in Netscape's Referral Server and all but two ISPs ... continue to distribute Netscape Navigator to this day," Myhrvold wrote. Myhrvold stated that Netscape "formed business relationships with almost all of the major ISPs based on the enormous initial popularity of its Navigator product" and that "Netscape also invented the concept of a referral server." Myhrvold indicated that Microsoft established its own referral server, available to users through the Internet Connection Wizard, a feature of a certain version of Windows 95. If a user chooses to use the Internet Connection Wizard, Windows 95 automatically dials into a computer--the referral server--which transmits to users a list of ISPs in the user's geographic area and a brief description of their services. Users can sign up for Internet access through the referral server. Myhrvold said that by the time Microsoft began to focus on their relationships with ISPs in late 1995 and early 1996, Netscape had already "locked in relationships with all of the significant ISPs." As a result, Myhrvold said his ICU group pursued relationships with "smallers ISPs that Netscape had disregarded." "I believe that Netscape's decision to ignore small ISPs as potential distributors of its Web browsing software, ceding that territory to Microsoft for a long time, was a mistake for them," Myhrvold opined. "This permitted Microsoft to gain a toehold in the ISP business that Microsoft has worked to expand over the last two years." Myhrvold wrote that Microsoft's cross-promotion agreements with 10 ISPs for placement in the Windows 95 referral server did not stop those ISPs from shipping Netscape's browser. According to Myhrvold, while certain ISPs shipped "millions of copies" of Netscape Navigator, "far fewer" copies of Internet Explorer were being so distributed during the period that the government claims that Microsoft forced ISPs to distibute Internet Explorer only. Myhrvold claimed that Microsoft's Windows 95 referral server agreements "were actually pro-competitive in the sense that they introduced ISP and consumer choice. Microsoft entered into the agreements at a time when Internet Explorer was at a severe distribution disadvantage relative to Netscape's Web browsing software." Myhrvold, 37, graduated from the University of California at Berkeley in 1987, according to biographical information provided by Microsoft. While still in college, Myhrvold and his brother founded Dynamical Systems Inc., which was acquired by Microsoft in 1986. Myhrvold started working for Microsoft in 1986, returned briefly to the university to finish his degree, and rejoined the company in 1987. Myhrvold is expected to take the witness stand tomorrow.