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Chase stonewalls over IE and AOL

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MS on Trial Brad Chase seemed determined to show that he was no pushover for these eastern lawyers, and that he was going to be as unforthcoming as possible to David Boies' cross examination. His two and a half days stonewalling in the witness box was not a strong performance, but he was the least damaging witness for Microsoft so far. When the admission of some Microsoft exhibits was being discussed, Judge Jackson noted that the trial was characterised by "multiple, multiple hearsay". Boies for the DoJ was objecting to the admission of what amounted to lawyer-written letters while the trial was pending. For once, he was overruled and the judge said he would determine what weight, if any, the documents would be given. Six segments of a Microsoft-produced video were screened. John Warden, for Microsoft, showed he did not have the Latin, since when he was asked by the judge if he was going to show them seriatim, he replied he would show them one after the other. The videos were about the online services folder, AOL, and how "easy" it was for AOL users to download Navigator. Chase admitted that his direct testimony had been modified by Microsoft lawyers. Chase admitted that he thought IE4 was too big to download, but claimed that Microsoft had had 11 million downloads of IE4, and that to the best of his recollection, this was the number of successful downloads. He also admitted that Microsoft uses contractors to provide additional downloading capacity at peak times, but there was no information as to whether they were obliged to use NT servers, or if they could use Unix boxes. Nor was he aware of any logs for downloads, although Chases claimed in answer to an earlier question that there were logs. Boies asked him to produce evidence, but none was forthcoming. As with all Microsoft's witnesses, Chase gave the appearance of knowing so little about his business that it was surprising that he was able to keep his job. He did not know, he said, whether IE3 or IE4 had recovery capability if a download failed. Chase claimed that 17 per cent of people in the US obtained their browser by download, as of Q2 1998, but the source of this data was not given, and may be the telephone sample of some 200 users from the so-called MDC data set, which has questionable validity. Judge Jackson noted that when he had tried to check the sample size in Schmalensee's tables, it was not there. Chase was the first Microsoft witness to admit that Microsoft had a culture, and that it included "a large amount of self-critiquing". Chase used this explanation to minimise the significance of a deposition from Joe Belfiore, a Windows interface program manager, who said "There's tons of feedback that suggest that downloading IE takes too long, is too hard. You can go read pretty much any press reviews, just go talk to any people or experience it yourself and you'll find that the number of hours that it takes to download these components over a phone line is incredibly discouraging to people, often fails, and the result is that people don't get an improved user experience at all." Boies produced a 27 March 1997 email from Kumar Mehta in which he said that "almost 60 per cent of all surfers have never downloaded any software from the web. My sense is that these people are not very likely to download anything, let alone a browser that takes two hours to download from the web." Chase had claimed in his direct testimony that 70 per cent of Internet users had downloaded software. Mehta also wrote that "80 per cent of those who do not use IE say they have no plans to switch to it". Chase weakly suggested that Mehta was being dramatic on purpose, but had no evidence to contradict what had been written. Chase's catch phrases, in the Microsoft tradition, were that he could not recall, or didn't know, which he used to great effect. He did volunteer that he thought on average, "people have 1.5 browsers" which tended to make a nonsense of the carefully-crafted surveys that give the result that Microsoft wishes. There is no methodology to take into account people using more than one browser on a regular basis. Chase said that in Q1 of 1998, the installed base for Netscape Navigator was 27 million, and 29 million in Q3. For IE, it was 13.5 and 20 million for the same quarters -- a 48 per cent increase compared with Netscape's seven per cent increase. Chase claimed that 22 percent of AOL users preferred Navigator, as of Q3 1998. Boies questioned Chase closely about the demonstration of how AOL users could download Navigator in his video. Chase had not shown the installation process in the video, and couldn't recall how to do it. He claimed that the set-up process was self-explanatory. During a barrage of questioning by Boies, Judge Jackson evidently sensed there was something fishy happening, and said he wanted the relevant part of the video played again. Chase revealed in a 19 November 1997 email Microsoft's current thinking: "IE has become too big to download. We need to have a browser and mail download that is less than 30 minutes for a 28.8 modem. Can IE5 be downloaded so that it is a series of patches to IE4? Our partners, like AOL, need a smaller browser too. The set-up process is too hard for users to figure out. Only a little more than half of the people that download active set-up end up installing the browser. I think they don't figure out what to do once they download the set-up stub." In his cross examination, however, Chase wanted to change his story about the failure rate for downloads. Boies pressed him for proof, but he had none, and wasn't willing to look for evidence that he said he had written down. Boies then sprang his own video on a surprised Microsoft defence team. Warden complained Microsoft had had no notice. Judge Jackson told him "Well, he's serving you notice now." It was decided that the showing would be put off until the next day. At the screening, Chase admitted he had viewed the video with Microsoft attorneys, but it did not help him because Microsoft had again been misleading in Chase's video by leaving out the difficult and time consuming job of downloading and installing Navigator. The video was narrated by Glen Weadock, a DoJ witness. With dramatic effect, Boies started and stopped the video, rubbing in the difficulty of the steps that Microsoft had skipped. It took around an hour to install Netscape, and required some knowledge. Boies asked Chase if Netscape was allowed to put instructions on the screen to show AOL users how to download Navigator? Chase, perhaps remembering Gates' lessons on semantics, replied he didn't really know what was meant by "put instructions on the screen". Boies was of course rubbing in the point that AOL was not allowed to help users to download Navigator. Boise persisted, and asked if the contract with Microsoft prevented on-screen instructions. Chase again claimed the question was not clear to him. It was all very well playing to a Microsoft gallery back in Redmond with this bravado, but the only audience that mattered was the judge, so when Chase again said "Your question isn't perfectly clear" Judge Jackson snapped: "Well, it's clear to me." Eventually Chase was forced to admit that the AOL-Microsoft contract prevented there being any helpful instructions for AOL users who wanted to download Navigator. Chase said that a keyword could be guessed and entered to download Navigator, and that users could "just try it and see if it works." Again, the judge was not amused: "Well, there are lot of words that I could try that won't work." But worse was to come. The judge asked "What would happen if I called Microsoft" to ask what keyword to try. Chase said: "I don't know if we would know." Yet again Chase played semantic games, claiming not to understand what Boies meant by the use of Navigator with AOL being 'seamless'. Yet again Judge Jackson stepped in: "I have taken the word 'seamless' to mean throughout the course of this trial as a passage from one domain to the other without being aware of crossing any boundary." Chase then claimed that the use of Navigator with AOL was not seamless, and that the word was also used at Microsoft as a euphemism for 'easy'. There was just a subtle hint that Boies was getting tired of Chase's games. When Chase was taking a long time finding a page number in a document, Boies helpfully told him that the page numbers were in numerical order. Chase sent round a self-congratulatory email to Microsoft executive staff on 14 March 1996, the week the AOL deal was signed. His Q&A included: "I find it hard to believe that AOL is using Internet Explorer as it browser. Are there exceptions?" to which the response for the faithful was: "Yes there are some but they are pretty remote. An AOL customer could choose to use Navigator and it will be available to be downloaded from the AOL site, though not in a prominent way." Meantime, AOL set about transferring its 5 million customers (at that time) to IE. For somebody who had repeatedly demonstrated his poor memory, it was quite remarkable that he was able to deny that Gates had asked at a January 1996 meeting with AOL "How much do we need to pay you to screw Netscape?" Judge Jackson will have to draw his own conclusion about who is telling the truth -- and from his performance in the witness box, Chase does not look like the front runner in the veracity stakes. Chase reminded Boies that when he was in the front row during the evidence from David Colburn of AOL, he had been accused of being intimidatory by Boies, but was allowed to stay there. Boies sparred with Chase for some considerable time to little avail. It was perhaps unwise for Chase to say "I'm not sure what you mean" in response to Boies question as to whether Microsoft had an antitrust compliance programme. Furthermore, he wasn't sure if it was written down, and anyway "Our culture isn't basically based around manuals and things like that." Judge Jackson decided to tell his own little joke after lunch one day. "The code of tribal wisdom says that when you discover you are riding a dead horse, the best strategy is to dismount. In law firms, we often try other strategies with dead horses, including the following: buying a stronger whip; changing riders; saying things like 'this is the way we have always ridden this horse'; appointing a committee to study the horse; arranging to visit other firms to see how they ride dead horses; increasing the standards to ride dead horses; declaring that the horse is better, faster and cheaper dead; and finally, harnessing several dead horses together for increased speed." Boies did not flatter the judge for his effort, and suggested that the case should move along. But could it be that the joke was indeed as apposite as the judge suggested: that a dead horse was now being flogged by Microsoft's legal team, and that as far as he was concerned, the case was proved? The Senate hearings had had a considerable impact on Microsoft, it appears, but Chase's claim that events "were distracting from the core issue, which is our ability to innovate" was PR humbug. Boies produced some reviews where Navigator 4 was pronounced superior to IE4, and from Chase's responses it became clear just how hard Microsoft had tried to "win" the reviews. In the case of CNET for example, Chase knew immediately that CNET had been persuaded by Microsoft to repeat the review, and found IE to be superior. Chase was very reluctant to acknowledge the evidence that OEM distribution was highly important for IE. Kumar Mehta had presented data in April 1997 that users rated Navigator better than IE twice as often, and that "OEM is the leading distribution channel for IE". In recross examination, Boies pounced and produced an undated exhibit from Chase's personal files in which the first of Microsoft's goals was "increase end user Internet Explorer usage on OEM systems". There was also consideration being given to move the Microsoft sign-up wizard into the boot sequence. A browser marketing analysis by Bill Koszewski in May 98 stated that "IE4 is fundamentally not compelling" and "not differentiated from Netscape v4 -seen as a commodity". Chase would not accept that this is what Koszewski thought. At this point, Boies concluded his cross examination. Warden's redirect examination was mundane. Chase suggested, probably correctly, that AOL did not switch to Navigator at the end of December last year because Navigator was not componentised and ready for AOL to use. It will not be necessary for AOL to wait until the expiry of the renewed Microsoft contract in 2001 because AOL has done deals with major OEMs and often has its icon on the desktop. Chase speculated that AOL would move its CompuServe members to Navigator in due course. He saw the IE share of the browser market dropping to 30 percent on AOL when IE is displaced by Netscape as the preferred browser. He's backed by a $4 billion bet that some such move will happen. ® Complete Register trial coverage

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