Microsoft on Trial: IE bundling debated internally

Microsoft Corp. officials agonised over whether to include the Internet Explorer browser in Windows, and as late as May 1998 worried that the quality of the browser would not lure users to switch from Navigator, according to internal company documents submitted as evidence in the Microsoft antitrust trial.

The Department of Justice introduced the documents here after wrapping up its case Wednesday afternoon. But now Microsoft gets to tell its side of the story.

The government is suing Microsoft for alleged anti-competitive behaviour, including bundling its browser with Windows to maintain control of the PC operating system market by eliminating threats from potential competitors such as Netscape Communications Corp.

Microsoft has said repeatedly that its Internet Explorer browser has rapidly gained ground on Netscape's Navigator because users like it better -- not because it's incorporated into the Windows operating system. But in an e-mail two years ago, Jim Allchin, senior vice president of Microsoft's systems group, worried that instead of improving Windows 98 -- formerly code-named "Memphis" - the browser was actually hindering it. "Both the Memphis and the NT team are totally frustrated with the IE 4 situation: the code quality is lower than we can take, they are being driven to different objectives on when they have to fix bugs in Memphis or NT," Allchin wrote in an e-mail to Paul Maritz, group vice president of Microsoft's platforms and applications group, in March of 1997.

Both men are on the Microsoft witness list and are scheduled to testify immediately after the current witness, MIT Sloan School of Management Dean Richard Schmalensee, finishes. Among the options Allchin suggested was dropping IE 4 from both platforms, according to the e-mail. "There is a strong push to do this," Allchin wrote. "We are wasting hundreds of people's time on builds that don't work." He predicted that including IE would force the ship date of Windows to slip by six months. "If I had to make the call today, the only thing I can do is remove IE 4 from both systems and press on," he wrote. "At least then we can make progress. The cost of removing it is not free, but once removed, progress would be steady."

Of course, IE was included in the platform, and Windows 98 was released later than planned. Two weeks after Allchin's e-mail, members of the Windows team inside Microsoft conducted a study about browser adoption.

According to an e-mail written by a researcher for Brad Chase, vice president of Windows marketing and developer relations: "80% of those who do not use IE say they have no plans to switch to it, which means that if we take away IE from the OS, most nav [Navigator] users will never switch to us." In addition, the company found that IS and Web professionals expected Microsoft to win the browser war "because IE will be bundled with the operating system, and they will have no real reason to purchase Navigator." Netscape eventually made its browser free, so it could better compete with Microsoft.

Another document showed that as late as May of 1998, Microsoft officials worried that IE did not contain enough features to woo Navigator users, even though it was to be included in Windows 98. "IE 4 is fundamentally not compelling," the heading of a draft of a planning document states. Underneath the heading, the document said the browser is "not differentiated from Netscape v4" and there's "no 'grass roots' end user demand for the browser."

The DoJ will probably mention some of the documents as it cross-examines Microsoft's witnesses. Company officials have accused government trustbusters of taking snippets of e-mails and depositions out of context.

Take me to the DoJ/Microsoft page.