Chase: MS a 'breath of fresh air'

Microsoft VP claims Netscape arrogance was a factor in AOL's browser decision.

WASHINGTON -- Netscape Communications Corp.'s arrogance was one of the reasons America Online Inc. chose Microsoft Corp. as its primary browser provider, Microsoft Vice President Brad Chase said Wednesday.

Chase, under re-direct here in the Microsoft (Nasdaq:MSFT) antitrust trial, recalled a lunch he had with AOL (NYSE:AOL) executive David Colburn where Colburn described working with Netscape (Nasdaq:NSCP) as an "incredibly difficult experience."

"He said that AOL had difficulty working with Netscape because they were arrogant, they'd put a deal on the table, then take it off, then put it on again," said Chase. "He was frustrated ... he considered us a breath of fresh air," Chase said.

One AOL e-mail sent to Chase described Netscape as "impossible to deal with."

Upon cross-examination, government attorney David Boies noted that Microsoft's contractual relationship with AOL wasn't all roses either. Boies directed Chase's attention to a different part of the very same e-mail, in which Chase wrote, "I am now through half of the contract they sent and I have the damn thing highlighted and have been swearing a lot."

Statistics tell the tale?
Microsoft attorney John Warden entered into evidence various editorials praising Internet Explorer 5 over Netscape Communicator 4.5 -- bolstering Microsoft's argument that its success in the browser market can be attributed to "superior technology."

Warden also presented two statistics attempting to prove Microsoft's argument that the browser market is still very competitive and that downloading software remains one of the most popular forms of distribution. Those statistics: That AOL went from 15 million to 16 million subscribers in just five weeks, and that, as of July 1998, Netscape estimates that more than 12.4 million copies of its browsers have been downloaded.

New browser a threat
Chase also testified that Sun Microsystems (Nasdaq:SUNW) plan to design a new browser -- consisting of browser components that can be integrated into smaller devices -- would be a considerable threat to Internet Explorer.

Microsoft has long-maintained that Internet Explorer's "componentized" technology is responsible for the company's success over Netscape in the browser market, and that Sun's intention to design a new browser would be a considerable threat.

"[I predict] we will drop to 30 percent, and Netscape to a little under 70 percent," Chase said, basing his testimony on a survey conducted on Microsoft's behalf last year.

Chase insisted that AOL does not have an exclusive relationship with Microsoft's Internet Explorer. Examining an anonymous memo indicating the contrary he said, "That's just wrong. AOL wanted some flexibility ... but always wanted one primary technology."

Chase testified that Microsoft got that flexibility by allowing users to download Netscape from AOL.

Boies and Warden then went back and forth three times over whether flexibility also meant allowing AOL to physically distribute Netscape Navigator, and building Internet Explore and Netscape Navigator into the AOL software. Currently, AOL software comes preloaded with Internet Explorer Services, but users are free to download Netscape Navigator and use it instead.

Compaq Computer Corp. (NYSE:CPQ) Senior Vice President John Rose will begin testifying Wednesday afternoon.