Microsoft draws blood in Netscape battle

Microsoft finally drew blood this morning when it produced a 1994 memo from Netscape co-founder Jim Clark. Late in December of that year Clark was approaching Microsoft, lobbying for the company to licence Netscape's browser, protesting that Netscape wasn't interested in the client market, and suggesting that Microsoft invest in Netscape. Said Clark: "We want to make this company a success but not at Microsoft's expense; we'd like to work with you. Working together could be in your self-interest as well as ours. Depending on the interest level, you might take an equity position in Netscape with the ability to expand that position later." Clark's offer was turned down, and Netscape's counsel later suggested that Clark had been a little nervous at the time. As well he might have been - Netscape had quite a way to go down the line before it turned a profit, and spent the early part of its existence as a miraculous combination of productless wonder and stock market darling. For sure, Clark was twitchy. But it's not entirely clear what his testimony proves. He made the approach to Microsoft's new technology general manager Dan Rosen in secrecy, the offer wasn't taken up, and he's no longer managing the company. He wasn't interested in the client market, but by the time of the disputed 'carve up' meeting, Netscape patently was, and it was a threat. So the video deposition of Bill Gates on day one of the trial included a note where he said: "We could also give [Netscape] money as part of the deal, buy a piece of them or something." These are basically two separate cases. Microsoft is trying to establish that Netscape wanted to do a deal, while at the same time denying that it offered Netscape a deal some months later. The establishment of the first does not per se prove Microsoft's case regarding the second. More interestingly in general terms, Clark's testimony claims that Bill Gates told him in October 1994 that Microsoft intended to give its browser away free. This appears to have influenced Clark's strategy somewhat: "I decided to give it away free because Bill Gates told me he was going to give it away free before our first beta ... I felt like we would have to in order to survive against Microsoft." Well, as we know, Netscape didn't exactly give it away free, but determined on a halfway house. You could have it free, but you were unlicensed, and corporate customers could be tapped to pay the licence. But Clark comes on as somewhat more naïve than Marc Adreessen, the Netscape exec now being accused of youthful recklessness. Bill Gates has a long track record of undermining potential rivals by talking about products that were almost entirely imaginary. The other side gets spooked and their development cycle goes into chaos mode - Bill's being doing this since the 80s. As Clark's own testimony reveals, in October 1994 Microsoft did not have a browser. His message to Rosen in December of that year was allegedly an attempt to stop Microsoft licensing Mosaic for its browser, and to get it to use Navigator instead. So he knew there was no browser, and he ought to have known that Gates was threatening to give away smoke. ® Complete Register trial coverage Click for more stories