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Microsoft Officer at Antitrust Trial Acknowledges Internet Acknowledges

By Rajiv Chandrasekaran
The Washington Post
WASHINGTON

Web sites that wanted top billing in Microsoft's Corp.'s Windows 98 operating system sometimes were required to create pages that would give a "degradation in appearance" if viewed with non-Microsoft "browsing" software, a Microsoft executive acknowledged Monday at the company's antitrust trial.

The companies also had to sign agreements that they would refrain from many types of business relationships with rival browsermaker Netscape Communications Corp., said the executive, Will Poole.

According to a contract between Microsoft and personal finance software maker Intuit Inc., which was introduced as evidence by the government, Intuit had to create on its Web site "some differentiated content with acceptable degradation when used with other browsers."

Poole said the restrictions were imposed, in part, to increase the market share of Microsoft's Internet Explorer browser relative to Netscape's. But he argued forcefully that browser-promotion requirements are perfectly legal and common in the technology industry.

The Justice Department and 19 states contend the exclusive contracts are one of several illegal Microsoft business practices designed to crush Netscape, which Microsoft viewed as a threat to its Windows monopoly.

Microsoft's Windows operating system is used on roughly 90 percent of the world's computers. To attract viewers, operators of many large Web sites made deals with Microsoft by which their sites would be listed in "channels," which are seen on the first screen that appears when a computer is turned on. A single click of a computer mouse would take a user to that site.

In return for this very attractive promotion, the government contends, Microsoft illegally insisted that the companies stay away from Netscape. Microsoft discontinued these practices last year, saying channels proved to be not as popular as originally thought.

The government's lead attorney, David Boies, questioned Poole extensively about Microsoft's contract with Intuit. William Harris, Intuit's chief executive, testified earlier in the trial for the government that Microsoft had required his company to "forego any business relationship with Netscape" in exchange for having the Quicken.com Web site promoted in Windows.

The promotion that Intuit wanted and eventually received was a listing in the Windows 98 "channel bar." Harris said the marketing advantages of the channel bar led Intuit to agree to distribute Microsoft's browser and limit dealings with Netscape.

Poole contended that Microsoft's contract with Intuit did not foreclose that company from all business relationships with Netscape.