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How MS destabilised Netscape and Marimba

Witness Eric Engstrom defends the DimensionX purchase

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MS on Trial During his evidence at the Microsoft trial, Eric Engstrom had some excuses ready about Microsoft's acquisition of DimensionX in 1997, which he engineered. He had wanted support from various people in Microsoft for the acquisition "so I put some statements in there that, you know, I was not fully briefed on, nor do I necessarily completely understand, but that represented the opinion of other people whose consensus I wanted in order to go through with the acquisition". There were however some more sinister reasons. The draft email advocating the acquisition to Gates and Maritz noted that DimensionX was about to be acquired by Javasoft. One of the statements that Engstrom referred to was that "Netscape is planning a large announce around this strategy [the key authoring tool for Marimba] and partners in the next few weeks. We could achieve a big tactical win here by removing their key tool." It was a clear case of a strategic acquisition that had an anti-competitive motivation. Engstrom defended this by claiming that Carl Jacobs, the CEO of Liquid Motion (acquired with DimensionX), had told him that the company was not working with Netscape. The Liquid Motion runtime was in many ways the equivalent of some multimedia controls that Microsoft was trying to develop. Engstrom had also written that "'derailing' what Netscape wanted would be a "HUGE HUGE thing". Brad Silverberg had asked Engstrom how the acquisition would take away the authoring tool from Marimba, so Engstrom (who confessed during his evidence that he did not understand what he was talking about) emailed Silverberg: "The authoring tool only works on the DimensionX runtime. It wouldn't be hard at all to make it (a) require our browser; (b) require DirectX runtime; (c) some other option to make Marimba's life difficult." This was not a good statement for a company accused of monopolisation to be seen to be making. Microsoft was considering a technical tie, so that users had to have IE in order to author with the tool. This was the same kind of "deep integration" that Microsoft had used with Windows and IE, and Malone's cross-examination exposed the motivation very well. ® Complete Register trial coverage

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