Microsoft on Trial: Microsoft lawyers grill Netscape CEO

Bobbing and weaving like two boxers feeling each other out at the start of a heavyweight bout, Netscape CEO Jim Barksdale and Microsoft's lead council John Warden squared off in court Tuesday afternoon in the historic Microsoft antitrust trial.

And if the first round was any indication -- this battle is going to last a long time. Barksdale's direct testimony had been submitted in written form instead of given orally, and Warden began his cross-examination of Barksdale's 127-page statement in excruciating detail.

After less than three hours of questioning, Warden's examination covered only the first 13 pages, leaving little doubt that the Netscape chief's time on the stand will likely last through Wednesday. While company officials called it a "good day for Microsoft," it appeared that the grilling did little to deflect the numerous charges the U.S. Department of Justice raised during its opening statements on Monday.

Warden opened Tuesday's session by delivering Microsoft's opening statements. He claimed Microsoft would be able to prove -- based on the testimony of Microsoft executives and the DoJ's own witnesses -- that the charges against Microsoft are false. Then he moved on to Barksdale. He started by spending considerable time drilling down on how Netscape and the DoJ first contacted one another.

Barksdale told Warden he believed the first meeting was in spring of 1995, when the DoJ paid a visit to Netscape officials to ask their opinions about an investigation into whether ties between Microsoft's Windows 95 and its MSN online service were having any impact on America Online. Claiming he met with the DoJ five other times between then and May of this year, Barksdale steadfastly maintained that contact was driven by the DoJ.

However Warden entered into evidence an letter sent by then-Netscape counsel Gary Reback to the DoJ in July 1995 -- proof, he claimed, that Netscape was pushing the DoJ to take action against Microsoft. "Isn't it a fact that Netscape was in regular communications with the DoJ at that time?" asked Warden. To which Barksdale responded: "Not that I am aware of. We communicated with them when asked. "Wasn't it true that you were lobbying the DoJ to go after Microsoft?" Warden continued. Barksdale responded by saying Netscape suggested the DoJ look into Microsoft when they entered their complaint in the "AOL Matter."

Warden pressed Barksdale again, asking him if the DoJ assault on Microsoft was considered an opportunity for Netscape, to which Barksdale responded, "I have always regarded it as more of a protection of an opportunity that we already had."

Warden then entered a second piece of evidence in the case -- a presentation given internally at Netscape on a project code-named "Rocket launch" -- that contained a slide that called the DoJ action an opportunity. The attorney said this was further proof that Netscape was using the lawsuit as an opportunity to compete against Microsoft on the browser front. Barksdale countered by saying that Rocket launch was the code name for the plan inside of Netscape to turn over the source code for Navigator to the public domain.

He also pointed out that the plan occurred at the same time Microsoft had just lost the first round of the consent decree fight with the DoJ and was forced to operate under the preliminary injunction issued by U.S. District Court Thomas Penfield Jackson. That injunction last December, which six months later was overturned on appeal, forced Microsoft to give PC makers the option of licensing Windows 95 without a browser.

During the remainder of the cross-examination, Warden attempted to prove that like Microsoft, Netscape had a practice of adding in new features, such as e-mail, to its browser at the time when it held the dominate market-share position. Warden also hit Barksdale with a series of questions pertaining to his knowledge of the reasons behind Microsoft threatening Compaq Computer Corp.'s Windows 95 license.

Warden continually pressed Barksdale in an attempt to get the CEO to agree that the real reason why Microsoft threatened Compaq wasn't due to its inclusion of Netscape Navigator, but rather Compaq's removal of Internet Explorer. Barksdale dodged the questions frequently, saying he never said that Compaq's inclusion of Netscape and removal of IE was the reason -- only that the effect of Microsoft enforcing its contract with Compaq regarding IE led to the ousting of Netscape.

In one of the more entertaining exchanges between the two, Warden asked Barksdale about a statement given by Marc Andreessen regarding how the browser was going to be the networked application platform of the future, and that Windows would be reduced to a collection of "poorly debugged device drivers" Barksdale said that statement was given as a "joke" saying it was " a joke then and a joke now," claiming that Netscape co-founder Andreessen is a "young man" who has at times made statements at conference that has "gotten us into trouble". In the later portions of Tuesday's cross-examination, Warden spent the majority of his time focused on Netscape's market share and pricing policies and its ability to distribute Navigator. Rick Rule, a consultant for Microsoft, said that Warden was attempting to show that Netscape has not been limited in its ability to distribute its product, and in Wednesday's questioning would delve into that subject further.

Barksdale is due to take the stand again Wednesday at 10 a.m. ET