Microsoft on Trial: Gates fails to recall emails

Videotaped testimony released for the first time Monday showed a forgetful Microsoft chairman Bill Gates, incapable of remembering basic details of meetings and e-mails central to the government's antitrust case against his company. In roughly an hour of tape played before federal Judge Thomas Penfield Jackson and 100 spectators here, an alert and sometimes hesitant Gates repeatedly took issue with questions put to him by federal attorney David Boies about e-mails written by him and other Microsoft (Nasdaq:MSFt) executives. Many of the memos seemed to place him at the centre of plans to undermine the markets for software produced by Sun Microsystems (Nasdaq:SUNW) and Apple Computer (Nasdaq:AAPL).

At one point, Gates said he had no idea whether an e-mail with his name at the top and apparently marked as evidence by the Microsoft legal department had come from his company. "I have no idea what those numbers are," he told Boies.

Microsoft Senior vice president for law and corporate affairs William Neukom called the tape "Little more than a scheme designed to get around the judge's limit on the number of witnesses."

Government attorneys stopped just short of calling Gates a liar. "I don't really want to get into characterizing responses," government attorney David Boies said after the day's session. "One of the reasons you have a videotape and one of the reasons it is played is so the trier of facts can make his or her own evaluation of the credibility of the witnesses. I think that is something that is entirely up to the judge to do."

Government attorneys have accused Microsoft of attempting to illegally extend its monopoly over the PC operating system to the market for Internet browsers. In addition, they say, the world's most valuable company has tried to illegally maintain its monopoly over the PC operating system thorough a campaign to 'pollute' Java, a potential competitor produced by Sun and widely distributed by Netscape Communications (Nasdaq:NSCP).

Boies quizzed Gates on his company's activities with Java. "Have you ever had discussions within Microsoft about the desirability of trying to undermine Sun because of what Sun was doing in Java?" he asked.

"Part of our activity is to go out and work with customers to see what it takes to have them choose to license our products," Gates replied. "That's in competition with many other companies, including Sun."

Boies volleyed back. "I'm not talking about what you do in competition with other products or other companies. Would it be consistent with that way you felt about Java for you to have told people that you wanted to undermine Sun?"

Gates replied: "As I've said, anything about Java you've got show me a context before I can answer because just the term Java can mean so many different things."

Boies then produced a three-line memo from Gates. The memo was in response to complaints from Apple Vice President Avie Tevanian that the latest version of Microsoft's browser disabled Apple's QuickTime multimedia technology.

"I want to get as much mileage as possible out of our browser and Java relationship here," Gates wrote to a half-dozen top Microsoft executives. "In other words, a real advantage against Sun and Netscape. Who should Avie be working with? Do we have a clear plan on what we want Apple to do to undermine Sun?"

Boies asked: What did you mean when you asked Microsoft Group Vice President Paul Maritz whether or not, "we have a clear plan on what we want Apple to do to undermine Sun?"

"I don't remember," Gates replied

Boies honed in on a Feb. 13, 1998 memo in which Microsoft executive Don Bradford discussed using Microsoft's Office software as a "club to use on Apple." "Getting Apple to do anything that significantly/materially disadvantages Netscape will be tough," Bradford wrote.

Apple's Tevanian testified in written testimony last Friday that Microsoft had threatened to stop production of its word processing and spreadsheet software for Apple's Macintosh if it failed to promote its browser to the near exclusion of the Netscape's Navigator browser. That threat, he said, led to an August 1997 agreement under which Microsoft won the "browser battle" at Apple. In return, Microsoft continued to produce Office. In addition, Microsoft agreed to invest $150 million in Apple and settle outstanding patent disputes. Apple executives, however, say the last two items were unrelated to the browser-Office deal.

Boies asked Gates if he knew what Bradford meant by using Office as a 'club'.

"No," Gates said.

"Was it your understanding in February of 1998 that Microsoft was trying to get Apple to do something to disadvantage Netscape?" Boies asked.

"No," Gates said.

Did he ever tell Bradford he had the wrong idea about "disadvantaging" Netscape through Apple? Boies asked?

"No," Gates said.

Difficult as the questioning was for each side, Boies and Gates seemed to bog down even more over a June 23, 1996 memo in which Gates seemed to lay out conditions under which Apple would bundle the Microsoft Internet Explorer browser. In the memo to executives Maritz and Brad Silverberg, he said he had "two key goals in investing in the Apple relationship - 1) Maintain our applications share on the platform and 2) See if we can get them to embrace Internet Explorer in some way."

Boies asked "Do you agree that in June of 1996 the two key goals that you had in terms of the Apple relationship were, one, maintain your applications share on the platform. And two, see if you could get Apple to embrace Internet Explorer in some way."

"No," Gates said.

Boies wanted to know why he had told Silverberg and Maritz that they were. "They weren't involved in the patent relationship at all," Gates replied. "So when I write to them I'm focused on the issues that involve them."

Boies prodded further. Didn't he mention patents in the memo? In his conclusion of the one-page email, Gates listed "Patent cross-licensing" as one of the things Microsoft could get from a larger deal.

"When you write to Mr. Maritz and Mr. Silverberg, you don't describe that as your top goal, in fact, you don't even describe it as one of your two or three goals; correct sir?" Boies asked.

Senior officials at Microsoft would have had nothing to do with the patent issues, Gates said. "I wouldn't distract them with it." Boies pressed once more. "So you're writing a memo to Pail Maritz, a senior voce president, and Brad Silverberg, an officer of some kind, and you're sending copies to four other people on the subject of the Apple meeting, and you say, 'I have two goals in investing in the Apple relationship'?"

Gates said he saw a difference Boies didn't. "That quite distinct than any goals I might have for a deal with Apple. It says 'I have two key goals in investing in the Apple relationship,' not 'I have two key goals for a deal with Apple.'"

Apple's Tevanian is scheduled to take the stand Wednesday following tomorrow's election-day recess.