MS-DOJ document dump gives sneak peek at OS strategy
The document dump in the case so far has allowed the public to peer behind the scenes into strategy sessions of Microsoft (Nasdaq:MSFT) and its competitors.
For instance, a string of e-mail between Microsoft executives in spring of 1997 -- submitted as evidence by government prosecutors -- showed a company worried about convincing "agnostic" ISPs to adopt its new browser.
"It's against their nature to favor a browser or even a platform. This has been damn hard for us to influence," Microsoft executive Cameron Myhrvold told Joachim Kempin and Brad Chase in an e-mail.
Myhrvold also fretted that computer makers would strike deals with ISPs that favored Netscape Communication Corp. (Nasdaq:NSCP). "How can we keep them from doing that?" he asked his fellow execs.
At the time, Microsoft was trying to topple Netscape, the maker of the dominant browser, Navigator. It was eyeing ISPs and computer makers as the main distribution channels for the browser. The government claims in its case against the company that Microsoft illegally leveraged its dominance in the operating space to take over the browser market and struck unfair, exclusive deals with ISPs.
Myhrvold's message came in response to e-mails from the executives, including one from Chase in which he suggests paying computer makers $3 to $5 for each new IE user, with the number climbing as the percentage of IE users grew.
So-called bounties, where one company pays another for each user lured to the payor's technology, sometimes were used by ISPs hoping to attract new users to their burgeoning service.
1990-96: Windows profits doubled
Another recently released internal Microsoft document shows that average revenue Microsoft received from Windows per computer system more than doubled from 1990 to 1996 -- and the OS accounted for an increasingly larger percentage of the machine's cost. Government exhibits show that Microsoft's average revenue per system sold grew to $62.35 in 1996 from $25.39 in 1990. The OS's share of the computer's cost also grew, from .7 percent to 3.1 percent during that time.
Microsoft's partner Intel Corp. (Nasdaq:INTC) experienced a similar growth pattern during that time. The chipmaker's revenue per system sold jumped to $236.37 in 1996 from $108.41 in 1990, according to the same document. Intel's percentage of the computer's cost jumped from 3.1 percent to 11.8 percent during that time.