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AOL exec disputes ‘IE was better’ claim

It was cheaper, he says, and the contract with Microsoft said it had to be 85 per cent of our shipments

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Microsoft attorney John Warden had been having some trouble with witnesses: AOL exec David Colburn didn't quite go all the way in helping him establish his case. Warden's objective in his cross-examination of Colburn was to show that Microsoft did not stifle competition in the online market. The 9 January 1996 and 12 March 1996 emails Warden put forward from AOL execs in an attempt to do this weren't very convincing, and it was clear that Warden was scraping the bottom of the barrel. More convincing was Warden's point that in March 1996, when AOL agreed the deal to favour Internet Explorer to get a position in the Windows 95 Online Services folder, AOL was already an option on some 90 per cent of consumer PCs. Warden asked Colburn why AOL continued to ink deals with OEMs if the Microsoft deal was so important. Colburn said that one of the advantages for AOL was being tightly integrated into the Windows 95 Internet Connection Wizard. Colburn would not agree that OEM deals were more important than the Microsoft deal, saying that the Microsoft deal lowered marketing costs. Colburn pointed out that Microsoft had great power over OEMs, and could tell them not to deal with AOL if it so chose. Warden then turned to AOL's 10K financial accounts and tried to show that an increase of $30 million, to $480 million, in AOL's marketing costs from 1996 to 1997 indicated that the Microsoft deal had not reduced marketing costs. Colburn told him that the full effect had not been seen until the following year. Warden made no headway in trying to show that AOL users could still obtain Navigator, because it required some technical ability to install it. In his written testimony, Colburn had drawn attention to draconian provisions in Microsoft's agreement with AOL that required AOL to guarantee that 85 per cent of browsers shipped would be IE, eand that AOL would not promote Navigator. AOL saw MSN as a major competitor, and Warden clearly had problems skirting around the issue as to why Microsoft should shoot itself in the foot by allowing the AOL presence to compete with MSN. Only when it came to the componentisation of IE was there some agreement that AOL was more convenient, but Colburn would not concede that IE was technologically superior to Navigator. Warden produced an email to Colburn from an AOL executive favouring IE, and an AOL chart from February 1996 that ranked IE and Navigator, and which Warden claimed showed IE was superior. Colburn did not go along with Warden's claims. Warden tried another line in an attempt to show that others were doing what Microsoft was accused of doing. Warden asked Colburn if a 1996 AOL proposal to Netscape whereby Netscape would agree not to enter the online services area if AOL did not develop its own browser was not similar to the market-sharing agreement with Netscape that Microsoft is alleged to have proposed. No, said Colburn, "our primary goal was to enter a short-term relationship with Netscape... we didn't want to turn a partner into a competitor". Warden produced an email from Steve Case, AOL's CEO, in which he said he agreed with Netscape's Marc Andreessen when he wrote in an email about the threat that Microsoft posed to both Netscape and AOL: "We can either be defeatist and give up the battle now, or we can use our unique respective strengths to go kick the shit out of the Beast From Redmond that wants to see us both dead." Asked if that was the common view, Colburn continued in "don't know" mode, suggesting that AOL still fears Microsoft. ® Complete Register trial coverage Click for more stories Click for story index

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