Censors strike MS testimony

The written deposition of Microsoft's first witness, Richard Schmalensee of MIT, makes copious use of Microsoft-confidential data. But because it is confidential data, some of it makes weird reading. In various passages any information likely to vaguely useful to the hapless reader attempting to understand what the good (we use the term advisedly, see below*) academic is on about is defeat by a black blob covering the relevant number. We're pretty sure we haven't got the lot, but what follows is a provisional Register summation of the excisions made by the Redmond censors. If enough of you in the know tip us off with the real numbers we'll prepare a patch for Schmalensee's testimony, allowing readers to substitute the real figures for the blanks. Here it comes: "As I showed in Section VIII, only [blank] percent of AOL's new subscribers in 1998 came through the OLS Folder [i.e. via Windows referalls]. The cost of obtaining those subscribers through agreements with OEMs who place AOL icons on the Windows desktop would have been about [blank] in 1998, approximately [blank] percent of AOL's marketing budget that year. That is an infinitesimal amount of money relative to the potential gains from selling a popular software platform. It amounts to [blank] percent of Microsoft's estimated… As I showed in Section VIII, the space provided by Microsoft was worth no more than [blank] in 1998-less than [blank] percent of AOL's marketing budget that year-and probably a good deal less. "The combined 1994 prices of MS-DOS, Windows 3.1, PC Tools for Windows, and Internet Chamelion [sic] amounted to about $261, or $287 in today's dollars-again compared with about [blank] for Windows 95/98, which provides… "a consumer who bought an Intel-compatible computer today would probably have obtained Windows 95/98, for which the OEM would have paid Microsoft about [blank]. Windows 98 also provides features that go far beyond those available in 1989 from a… "Microsoft charges OEMs an average of about [blank] for a copy for Windows 95/98. That price is less than 3 percent of the roughly [blank] that it costs to buy an average Intel-compatible computer system. Under plausible assumptions about the demand for personal computers, a firm with monopoly power over the operating system would charge at least 16 times-over [blank] -what Microsoft charges. The fact that Microsoft charges less than one-sixteenth of the monopolistic price reflects the fact that it faces significant competition from numerous sources. Indeed, Microsoft acts as if Windows-equipped PCs face a demand schedule with an elasticity of at least [blank] -a very high elasticity of demand and one that indicates that Microsoft acts as if it faces intense competition for the operating system category. (An elasticity of [blank] means that a 1 percent increase in the price of a Windows-equipped PC causes demand to fall by [blank] percent.)" * Richard Schmalensee has been a paid consultant for Microsoft since 1992 (which we should concede he states in his introduction). His deposition runs to 328 pages, and just shy of 90,000 words. If we'd produced something like that we'd have charged something in the region of $40-50,000, but hey, we're just cheap Eurohacks. Not a lot of change out of half a mill, we'd reckon. ® Complete Register trial coverage