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Microsoft trial hears Case
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June 4, 1999: 2:05 p.m. ET
AOL chief challenges claims that Netscape browser share was strong
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NEW YORK (CNNfn) - Nine minutes of videotaped testimony given by America Online Inc. chief executive Steve Case highlighted the Microsoft Corp. antitrust trial Friday as the focus increasingly shifts to AOL's acquisition of Netscape Communications Corp.
During a deposition given May 21 in Washington, Case said AOL (AOL) agreed to acquire Netscape last November despite the company's dwindling market share in the Web browser market, noting that AOL was more interested in Netscape's Netcenter portal and e-commerce properties.
One of the government's key arguments is that Microsoft (MSFT) sought to crush the competitive threat it perceived from Netscape's Navigator browser.
Microsoft, however, counters that the AOL-Netscape deal undermines the government's case, claiming the merger indicates Netscape was able to maintain a healthy competitive position. The software publisher also contends the deal creates a formidable competitor to it.
In court Friday, Microsoft attorney Michael Lacovara produced an internal Netscape document that pointed out the company had shipped 160 million disks containing Navigator at the time it was in negotiations with AOL.
But during redirect questioning from lead Justice Department attorney David Boies, Franklin Fisher, an economics professor at the Massachusetts Institute of Technology, said most of those copies of Navigator were discarded.
Franklin said although 160 million disks may have been shipped, Microsoft had foreclosed all of Netscape's "effective" means of distribution -- that is, computer makers and Internet service providers who offered Microsoft's Internet Explorer browser instead of Navigator.
The Justice Department and 19 states sued Microsoft last year for using its alleged monopoly on the Windows operating system to stifle competition in other segments of the computer industry.
Microsoft shares were up 1-7/8 at 78-1/4 in midday trade. 
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