'We're talking about knifing the baby' – MS exec

The second day of Apple VP Avie Tevanian's cross-examination by Microsoft attorney Theodore Edelman was rather more dramatic than the first, when Tevanian had alleged that Microsoft tried to sabotage Apple's QuickTime, that Microsoft threatened not to develop another version of Office for the Mac unless Apple switched to preferring Internet Explorer to Navigator, and agreed to a conclusion of the so-called patent dispute. On Thursday, the evidence for another market division proposal formed the focus. According to Tevanian's written testimony, in April 1997 there was a meeting between Peter Hoddie and Tim Schaaff of Apple, and Christopher Phillips and Eric Engstrom of Microsoft. The result was a proposal from Microsoft for Apple to drop QuickTime and leave the multimedia playback market to Microsoft, while Apple concentrated on software tools for Internet content. Hoddie: "Are you really asking us to kill playback? Do you want us to knife the baby?" -- meaning QuickTime. Phillips: "Yes, we're talking about knifing the baby." The conversation was relayed by Tevanian, who admitted he had not attended the meeting, but did attend another meeting with Microsoft executive Don Bradford, who made a similar proposal to divide the multimedia market. They were discussing potential conflicts between Apple and Microsoft playback strategy. Tevanian said that Bradford suggested to him that Bill Gates "wonders if the way to solve this is for us to take playback and you to take the authoring". Tevanian claims he replied: "No, this is not acceptable." Edelman was unable to convince Tevanian that the discussion (not denied, it should be noted) was really that each side was trying to claim a superior product. Tevanian said the threats were clear enough. Edelman continually referred to an email from Schaaff to Hoddie on 20 August 1997 as a proposal, when Tevanian and Steve Jobs decided there was no business benefit and rejected the idea. Tevanian said that the document was therefore unimportant. Judge Jackson chastised Edelman at one stage, having previously criticised his conduct several times: "You keep mis-characterising what [Tevanian] has told you. He said this was not a proposal. It's a pre-decisional communication by two Apple engineers which was explicitly rejected by Mr Tevanian and others. This is misleading language and it is not acceptable to me." Such admonishments would be unlikely in a jury trial, lest the jury be influenced, but are a good indicator of Jackson's present frame of mind. Apple had suggested collaboration with Microsoft on multimedia projects, and had even proposed that Microsoft use QuickTime instead of its proprietary technology. Edelman produced an internal Apple memo that discussed how to deal with Microsoft. One of the comments, in a section headed "Why Microsoft needs us" was a bullet point that said "DOJ". Wasn't Apple trying to leverage possible interest by the DoJ, and obtain business concessions from Microsoft, Edelman asked, perhaps forgetting that an innocent party would have nothing to fear from the feds. Tevanian replied that if Microsoft unfairly used its market power, "we would remind them, or even threaten them, that we might involve the DoJ". He added that it would be "a perfectly legal recourse to threaten to get the DoJ after them" as Apple was becoming "very concerned Microsoft would use its market position to kill QuickTime. In our estimation, they were acting unfairly and illegally". A Steve Jobs email records that Microsoft's NetShow team "are really going out of their way to say they intend to kill QuickTime and are being quite threatening and rude about it". Judge Jackson directly questioned Tevanian about Apple's Sherlock product, which is designed to help users find information on the Internet or on their disks. Edelman had been quizzing Tevanian about whether Sherlock was "built in" to the operating system -- an understandable line of questioning -- but it misfired badly. Tevanian said he considered it to be bundled [which is legally acceptable, whereas tying is not permitted if it is done by a company with market power]. Edelman pounced and produced a statement from Tevanian in which he said that Sherlock was "an integrated find feature" and was built into Apple's OS. Tevanian said that there had been a big problem when he was asked the question, and that he should not have answered it, noting that "bundled" and "built into" are phrases that are often interchanged. At this point, Judge Jackson took over the questioning: "Is there a distinction?" Tevanian said he thought so, and explained that bundled software was available separately and could be removed without destroying the operating system. "Is that distinction recognised in the industry?" Jackson asked. "Yes, that would be my opinion," Tevanian replied. This exchange -- and especially the judge's intervention -- is an indicator that Jackson appears to believe that Microsoft did tie IE to Windows, which again does not bode well for Microsoft. Edelman's ammunition was getting low when he introduced the subject of Apple's relationship with Avid, a developer of video editing solutions. Edelman tried to establish that Apple intended to cut off supplies to Avid in March, because Avid was backing Microsoft's multimedia approach instead of QuickTime. However, Tevanian said that although Apple wanted to persuade Avid to change its decision, Apple did not withhold supplies or services. Edelman showed a videotaped deposition from Steven Decker, Compaq's procurement director, in which he denied that Compaq decided not to use QuickTime 3.0 because it feared retribution from Microsoft. It may be that Compaq did fear Microsoft, but Decker gave as the reason that Apple didn't understand that PC makers expect free software, and Apple had decided to charge for version 3.0, whereas version 2.0 had been free and was included by Compaq. "We would be shipping QuickTime if Apple gave it to us for free," Decker said, pleasing neither Apple nor Microsoft with his comment. The judge several times asked Edelman when he expected to finish his cross-examination but received no exact reply, so he told Edelman: "I want you to try to finish today. I urge you to try." On Monday, Tevanian will face a friendly redirect, presumably from David Boies for the DoJ. The next witness will be Steven McGeady of Intel. He declined to provide written testimony, so will be examined first by the DoJ legal team. It is also believed that a further extract of Gates' deposition will be shown, possibly on Monday. ® Complete Register trial coverage Click for more stories Click for story index