Microsoft Say AOL Found IE "Superior"

WASHINGTON, D.C. -- Microsoft's next witness, company Vice President Brad Chase, testified in writing that America Online chose to use Microsoft's Web browsing product because it was a "superior technology" and not primarily because of promotion on the Windows desktop as an AOL executive had testified.

Chase, who is in charge of marketing and software developer relations for Microsoft's Personal and Business Systems Group, is Microsoft's only scheduled witness who had hands-on knowledge of the negotiations with AOL. He participated in meetings between AOL Chair Steve Case and Microsoft Chair Bill Gates and later negotiated the final deal. Chase is expected to be called as a witness after the conclusion of Cameron Myhrvold's testimony. (Myhrvold is a vice president responsible for Microsoft's business relationships with Internet service providers and telecommunications companies.)

In his 77-page written testimony released on Wednesday, Chase refuted the government's claim in the broad antitrust case against Microsoft that the company's 1996 distribution agreement with AOL hampered the ability of rival browser maker, Netscape Communications, to distribute its browser. In addition, Chase cited product reviews, recounted discussions with AOL officials, and pointed to aspects of Microsoft's technology in his testimony that AOL's chief reason for choosing Microsoft's browser was to select the best product available.

Contradicts AOL Testimony
AOL Vice President David Colburn has already testified at the trial that AOL regarded the browsers from Microsoft and Netscape as technologically equal but, he said, what clinched the deal was Microsoft's willingness to promote AOL on the Windows desktop in the Online Service Folder.

Chase recounted a conversation with Colburn a week after the March 16, 1996 deal was announced. "While placement in the online services folder may also have been important, Mr. Colburn focused on different issues, making it clear that AOL would not have chosen Microsoft as its supplier of Web browsing software if we had not had superior technology,'' Chase writes. "Specifically, he stated that Microsoft's technology was better suited to providing AOL subscribers with a seamless experience when they went to the Web. He also emphasized the importance of AOL controlling the user experience of its subscribers, and said that Microsoft alone offered AOL the ability to do that."

Chase further said that Colburn's statements to him were similar to Steve Case's statements to another Microsoft official, Brad Silverberg. According to Case, Netscape had been arrogant and unresponsive in dealing with AOL, whereas Microsoft had been "a dream to work with."

"Mr. Case also told Mr. Silverberg that he had asked Rich Schell, then Netscape's senior vice president of client development, for particular features in order to adapt Netscape's Web browsing software for AOL's use," Chase said. "According to Mr. Case, Mr. Schell's response was: 'You'll get what we give you, when we give it to you, if we decide to give it to you.'"

Desktop Demands
During a face-to-face meeting between Case and Gates, two months prior to the contract being signed, Case asked that the AOL icon be included on the Windows desktop if there was to be a partnership between the two companies. "Mr. Gates expressed frustration at Mr. Case's focus on getting an AOL icon on the Windows desktop," Chase recounted. "Mr. Gates said he would not agree to that demand."

Subordinates, including Chase, eventually convinced Gates that AOL already had distribution agreements with computer manufacturers that gave the company an icon on most commercially sold PCs. Gates would not agree to an AOL icon, which would compete with an icon for Microsoft's own MSN service, which had an icon. But he eventually agreed to the creation of an "Online Services Folder," in which a user could link to AOL from the desktop.

Source: IDG News Service


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