|
Microsoft feared Netscape
|
 |
February 10, 1999: 7:24 p.m. ET
Company pressured ISPs to use IE to quell Web browser competition
|
NEW YORK (CNNfn) - A Microsoft executive acknowledged Wednesday that his company pressured Internet service providers to use its Web browser instead of Netscape's because it feared head-to-head competition.
Confronted with his own e-mails and internal reports, Cameron Myhrvold, vice president of Microsoft 's (MSFT) Internet customer unit, acknowledged that his company had threatened to cut off Internet service providers' access to the critically important Windows desktop unless they shipped Microsoft's Internet Explorer to customers.
The Justice Department and 19 states allege that Microsoft Corp. used monopoly power to compete illegally against Netscape Communications Corp. (NSCP) in the market for browsers, used to surf the World Wide Web.
"You were concerned that if you presented users with a choice, side by side, they would pick the Netscape browser rather than yours?" lead Justice Department attorney David Boies asked Myhrvold.
"Yes, that's right," Myhrvold replied. "We were nowhere, we were the Johnny-come-latelys to the Internet."
He said Netscape already had "mindshare" -- it was the product people thought of when they thought of browsers.
Microsoft's contracts required Internet service providers to present Internet Explorer as the browser they were shipping, unless the consumer requested something else, Myhrvold said.
Internet service providers who failed to meet Microsoft's demands for a share of up to 85 percent of browsers shipped could be dropped from the Windows desktop.
Myhrvold testified that giving Internet service providers a chance to hawk their wares on the Windows desktop -- the opening screen a user sees after turning on a computer -- was "good value" that provided them with "a cheaper way of acquiring customers than the industry average."
Many consumers obtain their Web browsers through Internet service providers.
Myhrvold said Internet service providers were one of the two most important ways for consumers to get browsers. The other is getting a browser with a new computer. Microsoft now builds browsing capability into its Windows 98 operating system.
Among the prominent Internet service providers who had to commit to making certain that anywhere from 50 percent to 85 percent of their browsers were from Microsoft were AT&T Corp. (T), Prodigy, America Online Inc. (AOL) and CompuServe. CompuServe is now a unit of AOL.
"What Microsoft set out to do through these contracts, and largely succeeded for the time they were in effect, was to deprive consumers of the right to choose between Microsoft and Navigator," Boies told reporters after Wednesday's session.
Witness: AOL deal not "exclusive"
Separately, Brad Chase, vice president of Microsoft's personal and business systems division, rebutted government charges that the company's deal with AOL inhibited Netscape's ability to distribute its Navigator browser.
Microsoft released Chase's written direct testimony earlier Wednesday.
Earlier in the trial, David Colburn, an AOL executive, testified for the government that his company agreed in March 1996 to distribute Internet Explorer browser in exchange for placement in the online services folder in Microsoft's Windows 95.
Colburn said the contract prevented AOL "from providing any significant promotion or distribution of Netscape's Navigator browser."
Chase, however, reiterated Microsoft's contention that AOL chose IE over Navigator because its technology was better suited for AOL's needs.
IE, Microsoft has argued, is "componentized," meaning third-party vendors could adapt the software to their specific needs. Netscape's Navigator, they argued, is not.
"Componentization would allow AOL to keep its own user interface with its own distinctive branding, controlling the user experience of AOL subscribers browsing the Web," Chase said. "That was important to AOL, which does not want its subscribers to think they were leaving the AOL service when they accessed content on the Internet."
Chase also noted that Microsoft's contract with AOL did not prohibit the online service provider from offering competing browsers with its service.
This commitment is labeled "exclusive" in the license, "but it is not truly exclusive," Chase said. "AOL has always been free to provide non-Microsoft Web browsing software to subscribers who request it. In addition, there are a series of broad exceptions that permit AOL to promote and distribute non-Microsoft Web browsing software."
Microsoft shares rose 9/16 to close at 160-5/8 in Wednesday trade. 
-- from staff and wire reports
|
|
|
|
|
|
Netscape
Microsoft
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
