Battle plans set in MS/DOJ trial
Microsoft Corp.'s attorneys will scrutinize America Online Inc.'s (NYSE:AOL) purchase of Netscape Communications Corp. (Nasdaq:NSCP), while the DOJ will examine Microsoft's relationship with computer makers, judging from witness lists filed today.
Both the DOJ and Microsoft (Nasdaq:MSFT) filed their list of rebuttal witnesses late Monday afternoon. Microsoft is calling AOL senior vice president David Colburn, former Symantec (Nasdaq:SYMC) CEO Gordon Eubanks, and MIT Professor Richard Schmalensee.
The DOJ is calling Garry Norris, former director of software strategy at IBM Corp.'s (NYSE:IBM) PC division, as one of its rebuttal witnesses. Norris currently is a program director in IBM's networking hardware division. Norris, who negotiated the Windows 95 agreements with Microsoft, will testify about the absence of a "commercially viable alternative" to Windows and how it affected IBM's deals with the company, according to papers filed Monday by the DOJ.
He'll be joined by economist Franklin Fisher of MIT and computer scientist Edward Felten of Princeton, who both testified during the first stage of the trial.
In all, four of the six witnesses already have appeared at the trial, though one of them, David Colburn, is now a hostile witness for Microsoft.
Colburn testified in October that, among other things, his company chose Microsoft's browser over Netscape's because it was offered a prime position on the Windows desktop. But Microsoft's attorneys sought to portray such deals as standard industry practices.
Microsoft attorneys have called Colburn as a hostile witness and will question him about his company's plans in the consumer space, now that AOL has acquired Netscape and struck a closer partnership with Sun Microsystems Inc. Microsoft has said repeatedly since the deal was unveiled in November that the alliance will provide formidable competition in the marketplace.
Complete candor?
"Our rebuttal witnesses will show that the $10 billion merger of AOL and Netscape completely undercuts the government's case," Microsoft general counsel William Neukom said in a statement. Microsoft also said it will question Colburn about the "the completeness and candor of prior testimony." Colburn testified about two weeks before the AOL-Netscape deal was unveiled.
Microsoft also will call Schmalensee, who has already has testified for Microsoft, saying the company's pricing structure indicates that it doesn't have a monopoly.
Eubanks, who also will testify for the company, has been a longtime member of the pro-Microsoft camp.
Honing in
During the first part of the trial, the DOJ's strategy was wide-ranging, attacking Microsoft's practices in markets including Internet Service Providers, content makers, and other software such as the browser. This time, it appears government trustbusters will concentrate more specifically on Microsoft's relationship with PC makers.
In getting Norris to testify, the DOJ succeeded in finally getting someone from a PC division to agree to speak out against the software giant. Many have been afraid to do so because they fear the company would retaliate against them.
PC maker Compaq Computer Corp. (NYSE:CPQ), a close Microsoft ally, testified for the defense during the first part of the trial.
Absent from the list of witnesses this time around is Microsoft Chairman Bill Gates. Gates has made an unimpressive showing at the trial already -- via videotape. DOJ attorneys pulled out videos of Gates' deposition, where the CEO evaded questions, rocked back in forth in his chair, and was generally hostile to questioners. Most observers did not expect him to be on this list.
The trial went into recess at the end of February, after Microsoft rested its defense. Both sides called a dozen witnesses each during the first phase of the trial, which lasted four months.
The rebuttal witnesses will take the stand after the trial resumes later this month or next. They are expected to take a week each to testify.