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MSFT welcomes AOL talks
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November 23, 1998: 11:51 a.m. ET
Neukom says merger talks with Netscape torpedo government's antitrust case
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NEW YORK (CNNfn) - As Microsoft lawyers continued their cross examination of government economist Frederick Warren-Boulton, the software giant struggled to portray itself as a friendly competitor in an industry of equals.
Microsoft attorney Michael Lacovera kept up the courtroom pressure on the government's antitrust case, disputing Warren-Boulton's claim that Microsoft's line of Windows operating systems constitutes an undisputed monopoly.
In his pretrial written testimony, Warren-Boulton alleged that the software company conspired against other computer firms in order to "crush the incipient threat to its PC operating system monopoly that independent browsers and cross-platform technologies pose."
Because cross-platform technologies like Sun Microsystems' (SUNW) Java programming language operate across operating systems, many industry watchers consider them one of the greatest threats to Microsoft's market dominance.
Microsoft has been strongly accused in recent weeks of plotting to thwart the growth of Java or sabotage its universal applicability. Most recently, Microsoft was forced by a federal ruling to strip "polluted" Java code from its products.
Outside the courtroom, the company pointed to merger talks between archrival Netscape Communications (NSCP) and leading Internet provider America Online (AOL) as proof that competition is alive and well in the computer industry.
"The proposed deal demonstrates a simple truth: That there is vigorous competition in the marketplace and that Microsoft faces resourceful and capable competitors," said Microsoft General Counsel Bill Neukom.
The Justice Department and 20 states sued Microsoft in May, accusing the company of abusing its dominant share in the computer operating systems market to take over the Internet browser market from Netscape.
However, Neukom argued that the proposed AOL-Netscape deal shows that the government lawsuit - which he said was designed to benefit Microsoft's competitors, not consumers - is unfounded.
"From a legal standpoint, this proposed deal pulls the rug out from under the government. In fact the mere possibility of this kind of combination undermines the government's case from start to finish," he said [344K WAV] [344K AIFF].
Microsoft shares (MSFT) climbed 2-1/8 to 115-3/4 in mid-morning trading. 
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