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Disney roughed up by 1,000 pound gorilla in browser negotiations

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Steve Wadsworth, VP of Buena Vista Internet Group, a subsidiary of Walt Disney from 1995 until 1998, was deposed by Sandy Roth of the DoJ San Francisco Division. Roth said that Bill Spencer, Disney's account rep, described the windows desktop as "Microsoft's crown jewel" during negotiations. He also bragged that "AOL gets most of their subs from Windows" (meaning of course by having an icon present in Windows). But as soon became apparent, Disney would only benefit from any relationship with Microsoft if Disney agreed to some significant Microsoft demands. Disney had to promote the downloading of IE to users who did not use IE, and not promote, market or even mention Netscape on its website. Nor could Disney even link to a page that mentioned Netscape. When the heat was being turned up during the investigatory phase of what has become the present action, Microsoft evidently had second thoughts about the severity of its agreements, and relaxed them by sending an email that announced that marketing and promotion restrictions would not apply. This in itself was a interesting move, since the text of the substantive contract was not modified so that it would be had to say exactly what was and was not allowed. icrosoft however could claim, for legal purposes, that it had relaxed its contracts. The original agreement would not have allowed Disney to promote the Disney channel on Netscape's Netcaster, and Microsoft did its worst to stop Disney from having any collaboration with Netscape. Bill Spencer said that Microsoft would invoke the disputes resolution path specified in the agreement, and give 30 days notice of contract termination -- as well as removing Disney's logo in the interim. Wadsworth noted: "Bill [Spencer] also made it clear that Brad [Silverberg, a Microsoft VP] believes we will back down because we would be screwed to pick Netcaster over Microsoft. I pointed out to Bill that I didn't like being strong-armed, and that this approach to the relationship is only going to screw it up." Wadsworth wrote on one exhibit: "We are being roughed up by the 1,000 pound gorilla." Microsoft has been compared to a big gorilla several times in the past, but the weight is normally given as between 600 and 800 pounds, so it seems that the gorilla is getting more threatening with the passage of time. Microsoft's perception of itself is a little different, since the Microsoft Encarta encyclopaedia suggests a maximum weight for a gorilla of 400 pounds in natural surroundings, although it could be fatter in captivity. ®

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