Microsoft Exec Denies Threats
A top executive for Microsoft denied that the software company threatened Netscape Communications, Intel and Apple Computer Corp. in its efforts to win the browser wars, according to written testimony released Friday.
Paul Maritz, group vice president for platforms and applications at Microsoft (MSFT), will begin testifying in federal court in the 12-week-old antitrust trial on Monday. He will immediately face cross examination of his testimony by the government's chief prosecutor, David Boies.
Microsoft shares rose 3/16 to 158 1/2 Friday afternoon.
Maritz, who has been with Microsoft since 1986, is a key figure in the government's case against Microsoft. He is the author or recipient of dozens of e-mails introduced as evidence and he was a key participant in several meetings at the heart of the case.
Maritz has been quoted as saying Microsoft was going to "cut off Netscape's air supply."
In his written testimony, Maritz denied that Microsoft offered to divide the market for Internet browsing software with Netscape (NSCP) in exchange for a investment in the company in June 1995. The allegation was the most dramatic moment of the opening testimony of Netscape CEO James Barksdale.
"I never instructed any Microsoft personnel to seek a 'division of the market,' nor do I believe that any such proposal was ever made," Maritz said.
Maritz also denied that Microsoft threatened Intel (INTC) over the chipmaker's backing of Netscape's browser and Sun Microsystems' (SUNW) Java programming language, as charged by Intel Vice President Steve McCready. He denied that Microsoft threatened to withhold support for Intel's MMX chip unless Intel dropped development of its multimedia software.
Maritz said Intel and Microsoft's close working partnership is possible only because the two companies can be brutally honest with each other. "Neither company can 'intimidate' the other," he said.
Maritz said Intel's efforts in software often fall "below the high quality standards of Microsoft software."
Maritz also said gaining Apple's (AAPL) backing for Microsoft's Internet Explorer browser was a minor goal in the negotiations over a patent dispute with Apple that led to a $150 million investment and Steve Jobs' shocking public embrace of Bill Gates.
An Apple executive testified earlier in the trial that Microsoft's main goal in the negotiation was to get Apple to include Internet Explorer on every computer it sold. To gain leverage over Apple, Microsoft threatened to stop producing its popular MacOffice suite of business applications for the Macintosh computer, Avadis Tevanian said.
Maritz said Tevanian's story wasn't true. He said Microsoft, like all other developers of software for Macs, wondered if Apple would survive.
Maritz testified that Microsoft has good business reasons for including Internet Explorer in the Windows operating system. He said the history of operating systems from the 1960s has beea movement toward greater functionality. Microsoft didn't integrate the two products to kill Netscape, it did it "to make a better product," he said.
Rebutting the government's expert economic witness, Franklin Fisher, Maritz said Microsoft will be repaid many times over the $100 million it spends on Internet Explorer every year. Just one deal with four search engines earned Microsoft $50 million, he said.
Maritz said Microsoft is not a monopolist and does not act like one. "Microsoft must concern itself with whether there will even be what anyone would recognize as a personal computer 10 years from now," he said. The company faces relentless competition from all sides - other operating systems for personal computers, middleware such as browsers and Java and network computing.
Written By Rex Nutting, CBS MarketWatch Washington bureau chief