1

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

- - - - - - - - - - - - - - - - - -X UNITED STATES OF AMERICA, : : PLAINTIFF, : : V. : C.A. NO. 98-1232 : MICROSOFT CORPORATION, : : DEFENDANT. : - - - - - - - - - - - - - - - - - -X STATE OF NEW YORK, ET AL., : : PLAINTIFFS, : : V. : C.A. NO. 98-1223 : MICROSOFT CORPORATION, : : DEFENDANT. : - - - - - - - - - - - - - - - - - -X MICROSOFT CORPORATION, : : COUNTERCLAIM-PLAINTIFF, : : V. : : DENNIS C. VACCO, ET AL., : : COUNTERCLAIM-DEFENDANTS. : - - - - - - - - - - - - - - - - - -X WASHINGTON, D.C. OCTOBER 22, 1998 2:04 P.M. (P.M. SESSION)

VOLUME 4

TRANSCRIPT OF TRIAL BEFORE THE HONORABLE THOMAS P. JACKSON UNITED STATES DISTRICT JUDGE

2

FOR THE PLAINTIFFS: DAVID BOIES, ESQ. PHILLIP R. MALONE, ESQ. STEPHEN D. HOUCK, ESQ. ALAN R. KUSINITZ, ESQ. DENISE DEMORY, ESQ. GAIL CLEARY, ESQ. ANTITRUST DIVISION U.S. DEPARTMENT OF JUSTICE P.O. BOX 36046 SAN FRANCISCO, CA 94102

FOR THE DEFENDANT: JOHN L. WARDEN, ESQ. STEVEN L. HOLLEY, ESQ. WILLIAM H. NEUKOM, ESQ. RICHARD J. UROWSKY, ESQ. MICHAEL LACOVARA, ESQ. SULLIVAN & CROMWELL 125 BROAD STREET NEW YORK, NY 10004

DAVID A. HEINER, ESQ. THOMAS W. BURT, ESQ. MICROSOFT CORPORATION ONE MICROSOFT WAY REDMOND, WA 98052-6399

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INDEX

PAGE

CONTINUED CROSS-EXAMINATION OF JAMES BARKSDALE 4

DEFENDANT'S EXHIBIT NO. 49 ADMITTED 13

DEFENDANT'S EXHIBIT NO. 45 ADMITTED 17

DEFENDANT'S EXHIBIT NO. 46 ADMITTED 23

DEFENDANT'S EXHIBIT NO. 47 ADMITTED 29

GOVERNMENT'S EXHIBIT NOS. 35, 240, 242, 243, 244, 246, 248 ADMITTED 68

GOVERNMENT'S EXHIBIT NO. 33 ADMITTED 69

4

1 P R O C E E D I N G S

2 MR. WARDEN: GOOD AFTERNOON.

3 THE COURT: GOOD AFTERNOON.

4 CONTINUED CROSS-EXAMINATION

5 BY MR. WARDEN:

6 Q. GOOD AFTERNOON, MR. BARKSDALE.

7 A. GOOD AFTERNOON.

8 Q. DID YOU DISCUSS YOUR TESTIMONY WITH ANYONE DURING THE

9 LUNCHEON RECESS?

10 A. NO, NOT DURING--I MEAN, JUST A COUPLE OF SENTENCES OR

11 SO, WITH MY LAWYER.

12 Q. AND WAS THAT WITH YOUR COUNSEL OR SOMEONE ELSE?

13 A. WITH MY COUNSEL, YES, SIR.

14 Q. RETURNING TO DEFENDANT'S EXHIBIT 44, MR. ROSEN'S

15 NOTES OF THE JUNE 2ND MEETING, APPARENTLY--AM I CORRECT

16 THEY WERE SENT TO YOU BY MR. ROSEN ON THURSDAY THE 8TH OF

17 JUNE, AND YOU SENT THEM ON TO YOUR STAFF ON SATURDAY THE

18 10TH OF JUNE, 1995? IS THAT CORRECT?

19 A. IT APPEARS TO BE, YES, SIR.

20 Q. AND YOU DID SO WITH THE OPENING STATEMENT THAT

21 "ATTACHED ARE THE NOTES DAN ROSEN TOOK AT THE MICROSOFT

22 MEETING LAST WEEK AND SENT TO ME AT MY REQUEST." IS THAT

23 A CORRECT STATEMENT?

24 A. IT APPEARS TO BE.

25 Q. "THEY SEEM TO BE BASICALLY CORRECT IN CONTENT AND

5

1 TONE." WAS THAT A TRUTHFUL STATEMENT?

2 A. YES.

3 Q. LET'S GO THROUGH THE DOCUMENT. THE FIRST PARAGRAPH

4 OF ACTUAL TEXT BEGINS ON FRIDAY, 6/2; CORRECT?

5 A. YES.

6 Q. AND LISTS THE ATTENDEES. DOES IT CORRECTLY LIST THE

7 ATTENDEES?

8 A. I BELIEVE SO, YES, SIR.

9 Q. AND THEN IT SAYS, "THE PURPOSE OF THE MEETING WAS TO

10 UNDERSTAND IF THERE WAS AN OPPORTUNITY FOR A BROAD

11 COLLABORATION BETWEEN MICROSOFT AND NETSCAPE." IS THAT A

12 CORRECT STATEMENT?

13 A. YES.

14 Q. THEN IT SAYS "THE MEETING WAS A CORDIAL OPEN

15 DISCUSSION OF ISSUES AND DIRECTIONS" UNDER THE HEADING

16 "GENERAL." DO YOU SEE THAT?

17 A. YES.

18 Q. AND WAS THAT CORRECT?

19 A. YES.

20 Q. IT GOES ON, "NETSCAPE SEEMS OPEN TO WORKING WITH

21 MICROSOFT;" IS THAT CORRECT?

22 A. THAT WAS MY FEELING AT THE TIME.

23 Q. GOING TO THE BOTTOM OF THE PAGE, THE LAST TWO LINES,

24 IT SAYS "THEY." THAT REFERS TO NETSCAPE, DOES IT NOT?

25 A. YES.

6

1 Q. "WILL FOCUS ON ENTERPRISE APPLICATIONS AS THE FIRST

2 BIG WAVE."

3 "JIM"--THAT'S YOU; IS THAT CORRECT?

4 A. YES.

5 Q. --"SAID THAT NETSCAPE IS A PURE SOFTWARE PLAY FOR

6 ENTERPRISE." IS THAT A TRUTHFUL REFLECTION OF WHAT YOU

7 SAID AT THE MEETING?

8 A. ONLY IT SHOULD SAY "ENTERPRISE NETWORKING."

9 Q. THAT'S FINE. "ENTERPRISE NETWORKING," THE FIRST WORD

10 ON THE NEXT PAGE?

11 A. RIGHT.

12 Q. THEN NETSCAPE WOULD GO INTERENTERPRISE; CORRECT?

13 A. CORRECT.

14 Q. AND THEN CONSUMER; IS THAT RIGHT?

15 A. RIGHT.

16 Q. GOING DOWN TO THE MIDDLE OF THE PAGE, JUST ABOVE THE

17 MIDDLE, DO YOU SEE THE SENTENCE THAT BEGINS "WILL CONTINUE

18 TO FOCUS"?

19 A. YES.

20 Q. "WILL CONTINUE TO FOCUS ON THE INTERNET AS ITS OWN

21 DELIVERY AND MARKETING SYSTEM."

22 A. YES.

23 Q. "SO THAT THEY DON'T HAVE TO DEVELOP CHANNEL." WHAT

24 DOES "CHANNEL" MEAN?

25 A. WOULD BE OTHER FORMS OF INDIRECT MARKETING.

7

1 Q. DOES THAT MEAN, FOR EXAMPLE, THE OEM CHANNEL?

2 A. WELL, I BELIEVE THAT ABOVE THAT I TALKED ABOUT OEM'S,

3 BUT IT COULD BE. IT SAYS THEY WILL TURN KEYS WITH BARS

4 AND OEM'S RIGHT BEFORE YOU START READING.

5 Q. RIGHT. AND, THEREFORE, I'M ASKING YOU WHETHER

6 CHANNEL HERE REFERS TO OEM CHANNEL?

7 A. IT REFERS TO OEM'S AND OTHER CHANNELS. I MEAN, I

8 WOULD NOT SAY--

9 Q. THANK YOU.

10 A. --THAT IT WOULD INCLUDE OEM'S AS NOT BEING AN

11 OPPORTUNITY FOR US.

12 Q. GOING BACK TO YOUR COMMENT THAT THIS WAS A CORDIAL

13 OPEN DISCUSSION AND OPPORTUNITY TO SEE IF THERE COULD BE A

14 BROAD COLLABORATION, HAD YOU AND DAN ROSEN, IN FACT,

15 DISCUSSED SUCH A COLLABORATION BEFORE?

16 A. WELL, I THINK, AS I INDICATED IN MY TESTIMONY, DAN

17 AND I HAD MET A COUPLE OF MONTHS PRIOR AT A CONFERENCE,

18 AND DAN INVITED ME TO HAVE A CUP OF COFFEE, AND I HAD

19 KNOWN DAN BEFORE, AND HE SAID TO THE EFFECT, "WE WOULD

20 LIKE TO WORK WITH YOU GUYS," AND I PROBABLY SAID, "WE

21 WOULD LIKE TO WORK WITH YOU GUYS" OR SOMETHING LIKE THAT,

22 BUT I DON'T REMEMBER BEING ANY GREAT DETAIL.

23 Q. WAS THIS AT THE LODGE AT SNOW BIRD?

24 A. YES.

25 Q. DURING THAT CONVERSATION, DID MR. ROSEN TELL YOU

8

1 ABOUT THE BROAD RELATIONSHIP BETWEEN MICROSOFT AND A

2 COMPANY CALLED UUNET?

3 A. I DON'T REMEMBER WHETHER HE TOLD ME ABOUT IT AT THAT

4 MEETING OR AT THE MAY OR THE JUNE 21ST MEETING. I DO

5 REMEMBER HIM MENTIONING UUNET AS ONE OF THE COMPANIES THAT

6 THEY HAD PARTNERED WITH. THEY HAD BOUGHT AN EQUITY, I

7 THINK, INVESTMENT IN UUNET.

8 Q. NOW, GOING BACK TO THE QUESTION OF OEM'S, ISN'T IT

9 TRUE THAT NETSCAPE'S ENTIRE OEM SALES FORCE HAS NEVER BEEN

10 GREATER THAN 50 PEOPLE, INCLUDING SYSTEMS ENGINEERS,

11 PROGRAM MANAGERS, AND SALESPEOPLE?

12 A. I DON'T KNOW.

13 Q. WAS RAM SHRIRAM IN CHARGE OF OEM SALES UNTIL THE END

14 OF 1997?

15 A. THAT WOULD BE CORRECT, YES.

16 Q. AT PAGE 18, BEGINNING AT LINE 13 OF HIS DEPOSITION

17 TAKEN ON OCTOBER 5, 1998, MR. SHRIRAM WAS ASKED THE

18 FOLLOWING QUESTION AND GAVE THE FOLLOWING ANSWER,

19 (READING):

20 QUESTION: DO YOU REMEMBER THE SIZE OF THE

21 OEM SALES FORCE DURING THE 1995, 1996, AND 1997

22 PERIOD?

23 ANSWER: I ABSOLUTELY DO. IT WAS PROBABLY

24 TOTAL, INCLUDING SYSTEMS ENGINEERS, SALES PEOPLE

25 AND PROGRAM MANAGERS, LESS THAN 50 PEOPLE.

9

1 NOW, DO YOU HAVE ANY BASIS FOR DISPUTING--

2 A. NO, SIR, I JUST SAID I DIDN'T--I DON'T KNOW. HE

3 WOULD KNOW BETTER THAN I.

4 Q. BETTER THAN YOU?

5 A. YES. I MEAN, HE RAN THE GROUP.

6 MR. BOIES: MAY I ASK WHETHER MR. WARDEN WOULD

7 HAVE ANY PROBLEM READING THE NEXT FOLLOWING QUESTION AND

8 ANSWER.

9 MR. WARDEN: NO, I DON'T HAVE ANY PROBLEM.

10 BY MR. WARDEN:

11 Q. (READING):

12 QUESTION: FOR THOSE THREE YEARS?

13 ANSWER: YEAH, PROBABLY PEAKING AT ABOUT 50,

14 55 PEOPLE, YOU KNOW, WHEN I LAST HAD CHARGE OF

15 THAT FUNCTION.

16 LET'S GO BACK TO THE DEFENDANT'S EXHIBIT 44. ON

17 THE THIRD PAGE OF THE DOCUMENT BATES NUMBERED 215, ABOUT

18 SIX OR SEVEN LINES DOWN, DO YOU SEE THE COMMENT, WHICH IS

19 THE ONE BY ITSELF, A CLOSE RELATIONSHIP ON FUTURE CLIENTS?

20 A. I SEE THAT, YES.

21 Q. WHAT DID THAT MEAN?

22 A. I DON'T REMEMBER EXACTLY. IT MEANT THAT WE WANTED TO

23 WORK WITH THEM ON OUR CLIENT PRODUCT IN THE FUTURE SINCE

24 THEY WERE THE PRINCIPAL PLATFORM THAT WE WERE GOING TO BE

25 DISTRIBUTING IT ON.

10

1 Q. AND BY "CLIENT" YOU MEAN "BROWSER" THERE; IS THAT

2 CORRECT?

3 A. YES.

4 Q. AND THE NEXT SENTENCE SAYS--OR I'M SORRY, THE NEXT

5 TWO SENTENCES SAY, "ON BROWSER COOPERATION, JIM SAID THAT

6 HE WOULD LIKE MICROSOFT TO DISTRIBUTE HIS BROWSER."

7 DID YOU SAY THAT?

8 A. SURE DID.

9 Q. "SHORT OF THAT, HE WOULD LIKE TO EXPLORE WAYS TO

10 COOPERATE, BUT HE WANTS TO CONTINUE TO ADD VALUE AND

11 BROWSER CODE."

12 DID YOU SAY THAT?

13 A. I PROBABLY SAID SOMETHING LIKE THAT, YEAH.

14 Q. NOW, THE TERM "CLIENT" AND "BROWSER" ARE BOTH USED

15 THERE IN THOSE FOUR LINES. IS IT POSSIBLE THAT "CLIENT"

16 REFERS TO OPERATING SYSTEMS RATHER THAN "BROWSERS"?

17 A. NO, I DON'T BELIEVE SO.

18 Q. DIDN'T YOU USE THE TERM "BROWSER" AND HE USED THE

19 TERM "BROWSER" IN THIS CONVERSATION AND THEN "CLIENT" WAS

20 USED FOR SOMETHING ELSE?

21 A. I DON'T THINK SO. MAYBE YOU COULD SHOW IT TO ME.

22 Q. NO, NO. I'M ASKING YOU.

23 A. TO ME, THE TERM "CLIENT" AND "BROWSER" IN THIS

24 CONTEXT, IN THIS STATEMENT, APPEARS TO MEAN THE SAME

25 THING.

11

1 Q. OKAY. THEN WE GO INTO A SECTION CAPTIONED "WHAT

2 MICROSOFT WANTS FROM NETSCAPE," AND ON DOWN THERE ABOUT

3 SIX OR SEVEN LINES APPEARS THE FOLLOWING, "STRONG SUPPORT

4 OF WINDOWS 95 AND ITS EVOLUTION PATH. STRONGER SUPPORT

5 THAN FOR OTHER PRODUCTS LIKE ACROBAT OR JAVA. THIS MIGHT

6 INCLUDE USING MICROSOFT 92 S UNDERLYING CODE FOR ITS

7 BROWSER," NETSCAPE'S BROWSER, "ADDING THERE NETSCAPE'S

8 VALUE-ADDED COMPONENTS ON TOP."

9 DO YOU SEE THAT?

10 A. I DO.

11 Q. AND DID MR. ROSEN EXPRESS THAT TO YOU AT THE MEETING?

12 A. THAT THIS COOPERATION MIGHT INCLUDE USING MICROSOFT'S

13 UNDERLYING CODE FOR ITS BROWSER ADDING THEIR VALUE-ADDED

14 COMPONENTS ON TOP.

15 Q. ADDING YOUR VALUE-ADDED COMPONENTS ON TOP?

16 A. YES.

17 Q. DID HE EXPRESS THAT?

18 A. I BELIEVE HE DID, OR SOMETHING TO THAT EFFECT.

19 Q. AND WHAT IS THE 92 S UNDERLYING CODE?

20 A. THAT'S A MISTAKE IN THE WAY THIS IS PRINTED OFF.

21 Q. OKAY.

22 A. ALL IT REALLY MEANS IS IT SHOULD BE MICROSOFT

23 POSSESSIVE, MISCROSOFT'S UNDERLYING CODE. EQUAL 92 IS A

24 TRANSPOSITION OF AN APOSTROPHE.

25 Q. THANK YOU.

12

1 A. JUST TO MAKE IT CONFUSING.

2 Q. AND WHAT WOULD YOUR VALUE-ADDED COMPONENTS ON TOP BE?

3 YOUR BROWSER?

4 A. OUR BROWSER.

5 Q. AND THEN AT THE END IT ENDS WITH NEXT STEPS,

6 BASICALLY, "ONE TO ARRANGE A JOINT BRAIN-STORMING SESSION;

7 AND TWO, TO PREPARE A LIST OF THINGS EACH SIDE MIGHT WANT

8 TO BE WILLING TO BEGIN A FORMAL RELATIONSHIP." DO YOU SEE

9 THAT?

10 A. YES.

11 Q. AND THAT WAS WHAT THE PURPOSE OF THE JUNE 21ST

12 MEETING WAS, WAS IT NOT?

13 A. YES.

14 Q. AND THE CONCLUSION HERE, EXPRESSED BY MR. ROSEN,

15 REPORTED AS SUCH TO YOU, IS THAT NETSCAPE IS OPEN TO A

16 BROAD STRATEGIC RELATIONSHIP WITH MICROSOFT; IS THAT

17 CORRECT?

18 A. YES.

19 Q. GOING BACK TO THE OEM SALES FORCE FOR A MINUTE, WITH

20 THAT SIZE SALES FORCE, WERE YOU PREPARED TO MOUNT ANY KIND

21 OF AGGRESSIVE EFFORT TO DEVELOP THE OEM CHANNEL?

22 A. I THOUGHT WE WERE, BUT THERE ARE NOT THAT MANY OEM'S

23 OUT THERE.

24 Q. HOW MANY?

25 A. A FEW HUNDRED, REALISTICALLY, OF THE PC OEM'S,

13

1 PROBABLY A FEW DOZEN.

2 WE ALSO, AS I EXPLAINED TO YOU THE OTHER DAY, WE

3 ALSO SOLD OUR SERVER PRODUCTS AND OUR CLIENT PRODUCTS

4 THROUGH OTHER OEM'S, COMPANIES LIKE ORACLE AND SUN AND SO

5 FORTH, THAT WE CONSIDER THEM OEMS AS WELL, BUT PC OEM'S

6 WOULD BE, MAYBE, A COUPLE OF DOZEN.

7 Q. RIGHT.

8 MR. WARDEN: I NOW OFFER DEFENDANT'S EXHIBIT 49,

9 WHICH IS CAPTIONED "MS 6/19 NOTES FROM ROSEN FAX" AND

10 BEARS NETSCAPE BATES NUMBER 17 ON ITS FIRST PAGE THROUGH

11 19 ON ITS LAST PAGE.

12 MR. BOIES: NO OBJECTION, YOUR HONOR.

13 THE COURT: DEFENDANT'S 49 IS ADMITTED.

14 (DEFENDANT'S EXHIBIT NO. 49 WAS

15 ADMITTED INTO EVIDENCE.)

16 BY MR. WARDEN:

17 Q. THIS E-MAIL FROM MICROSOFT TO NETSCAPE SAYS IT

18 RELATES TO MIKE HOMER SPECIFICALLY AT NETSCAPE, AND IT

19 SAYS IT RELATES TO "MICROSOFT NOTES/ROSEN," AND PARAGRAPH

20 ONE SAYS "THE DISCUSSION LIST IS NOT BINDING UNTIL

21 REFLECTED AN THE AGREEMENT."

22 DO YOU SEE THAT?

23 A. YES, I DO.

24 Q. AND THIS WAS TRANSMITTED TO NETSCAPE AT 5:30 IN THE

25 AFTERNOON OF JUNE 19, ACCORDING TO THE DATE LINE.

14

1 ACTUALLY, THAT'S NOT 5:30 IN THE AFTERNOON, IS IT? YEAH,

2 IT WOULD BE, WOULDN'T IT?

3 A. 5:34.

4 Q. ON JUNE 19, IN OTHER WORDS, WITH ONLY ONE BUSINESS

5 DAY REMAINING BEFORE THE JUNE 21ST MEETING.

6 A. YES.

7 Q. I DIRECT YOUR ATTENTION TO PARAGRAPH NUMBER FIVE.

8 HAVE YOU SEEN THIS DOCUMENT BEFORE?

9 A. YES, SIR, I HAVE.

10 Q. DID YOU SEE IT AT OR ABOUT THE TIME IT WAS SENT TO

11 NETSCAPE?

12 A. I DON'T REMEMBER THE FIRST TIME I SAW IT. I HAVE

13 SEEN THE DOCUMENT. IT MAY HAVE BEEN AROUND THAT TIME, BUT

14 I DON'T REMEMBER SPECIFICALLY.

15 Q. I WILL DIRECT YOUR ATTENTION TO PARAGRAPH NUMBER

16 FIVE, WHICH APPEARS UNDER THE HEADING "CLIENT," AND IS THE

17 FIFTH ITEM UNDER THAT HEADING, AND IT'S CAPTIONED "NEW

18 PLATFORM FEATURES. MICROSOFT AGREES TO GIVE NETSCAPE

19 INSIGHT INTO THOSE FEATURES OF THE WINDOWS 95 OPERATING

20 SYSTEM THAT WILL BE AVAILABLE FOR NETSCAPE'S USE IN

21 CREATING NEW VERSIONS OF ITS BROWSER SO THAT NETSCAPE WILL

22 NOT EXPEND RESOURCES DUPLICATING FEATURES THAT CAN BE

23 OBTAINED FROM THE PLATFORM."

24 AND THAT WAS ONE OF THE AREAS OF COOPERATION YOU

25 HAVE BEEN EXPLORING; CORRECT?

15

1 A. YES.

2 Q. LET'S GO TO PARAGRAPH 106 OF YOUR DIRECT TESTIMONY ON

3 PAGES 59 AND 60. AND THIS PARAGRAPH, I BELIEVE, FROM ITS

4 HEADING, SPEAKS SORT OF AS OF THE BEGINNING OF THE JUNE

5 21ST MEETING; IS THAT CORRECT?

6 A. YES.

7 Q. AND IT SAYS YOU NEEDED THREE THINGS, AS I COUNTED:

8 THE REMOTE NETWORK ACCESS PHONE BOOK API--THAT'S WHAT YOU

9 HAVE CALLED THE DIALER, ISN'T IT?

10 A. YES.

11 Q. AND I WILL CALL IT THE RNA API; IS THAT AGREEABLE?

12 A. YES, SIR.

13 Q. DID THE RNA API EXIST ON JUNE 21, 1995?

14 A. I DON'T KNOW.

15 Q. WAS TROY CHEVALIER THE NETSCAPE ENGINEER IN CHARGE OF

16 SEEKING THAT API, OR OTHERWISE GIVING YOU THAT

17 FUNCTIONALITY?

18 A. TROY CHEVALIER WAS ONE OF THE MEN WORKING ON THAT

19 PROJECT. WAS HE IN CHARGE OF THAT PARTICULAR THING? HE

20 MAY HAVE BEEN. HE WAS IN THAT GROUP.

21 Q. NOW, I BELIEVE WE TALKED BRIEFLY THIS MORNING ABOUT

22 WHETHER PREVIOUS VERSIONS OF NAVIGATOR HAD DIALUP

23 CONFIGURATION; DO YOU RECALL THAT?

24 A. YES.

25 Q. AND DO YOU KNOW?

16

1 A. WELL, AS I THINK I TOLD YOU, WE HAD NOT--WE HAD--IN

2 THE CASE OF DIALING, WE HAD, UP UNTIL THEN, HAD THE

3 CAPABILITY, THAT IF WE DOWNLOADED THE PRODUCT OVER THE

4 INTERNET, IT COULD REACCESS THAT INTERNET ACCESS PROVIDER,

5 BUT IT WAS NOT GENERAL-PURPOSE DIALING. IT WAS LIMITED TO

6 THAT ISP OR THAT CONNECTION.

7 Q. YOU NEXT REFER TO A SCRIPTING ENGINE IN BETA.

8 A. YES.

9 Q. DID NETSCAPE ALREADY HAVE A BETA OF THE WINDOWS

10 SCRIPTING ENGINE ON JUNE 21, 1995?

11 A. DID WE HAVE THE MICROSOFT SCRIPTING ENGINE OR OUR

12 OWN?

13 Q. THE BETA VERSION FROM MICROSOFT OF THE WINDOWS 95

14 SCRIPTING ENGINE. DID YOU HAVE IT?

15 A. I DON'T REMEMBER IF WE HAD IT AT THAT TIME. IT

16 TOOK--IN BETA, WE MAY HAVE HAD IT. WE MAY NOT HAVE. I

17 DON'T KNOW.

18 Q. WELL, YOU'RE SPEAKING ABOUT A SCRIPTING ENGINE IN

19 BETA HERE, ARE YOU NOT?

20 A. YES.

21 Q. DID YOU INTEND TO SUGGEST BY YOUR DIRECT TESTIMONY

22 THAT AS OF JUNE 21, 1995, YOU DID NOT HAVE THE SCRIPTING

23 ENGINE IN BETA?

24 A. NO, SIR. I'M SAYING WE NEEDED OTHER TECHNICAL

25 INFORMATION ABOUT THE SCRIPTING ENGINE IN BETA.

17

1 Q. I BELIEVE THIS SAYS, "WE NEEDED OTHER TECHNICAL

2 INFORMATION FROM MICROSOFT, INCLUDING A SCRIPTING ENGINE

3 IN BETA." STOP RIGHT THERE. DOES IT NOT?

4 A. IT SAYS THAT, YES.

5 Q. ISN'T IT A FACT THAT YOU HAD THAT BEFORE THE JUNE 21

6 MEETING?

7 A. LIKE I SAY, WE MAY HAVE. I DON'T KNOW.

8 MR. WARDEN: I OFFER DEFENDANT'S EXHIBIT 45

9 BEARING NETSCAPE BATES NUMBER 51549, AN E-MAIL TO DAN

10 ROSEN AT MICROSOFT FROM MIKE HOMER AT NETSCAPE.

11 MR. BOIES: NO OBJECTION, YOUR HONOR.

12 THE COURT: DEFENDANT'S EXHIBIT 45 MAY BE

13 ADMITTED.

14 (DEFENDANT'S EXHIBIT NO. 45 WAS

15 ADMITTED INTO EVIDENCE.)

16 BY MR. WARDEN:

17 Q. HAVE YOU EVER SEEN THIS BEFORE, MR. BARKSDALE?

18 A. I MAY HAVE. I DON'T REMEMBER.

19 Q. DID YOU REVIEW IT IN CONNECTION WITH PREPARING YOUR

20 DIRECT TESTIMONY?

21 A. I DON'T BELIEVE I DID, THIS SPECIFIC ONE.

22 Q. IT READS, "DAN, WE HAVE RECEIVED A BETA VERSION OF

23 YOUR SCRIPTING ENGINE FOR WINDOWS 95 AND WOULD LIKE TO GET

24 A LICENSE TO DISTRIBUTE IT WITH OUR PRODUCTS IF IT WILL

25 NOT BE INCLUDED IN WINDOWS 95. WHO SHOULD I FOLLOW UP

18

1 WITH IN ORDER TO ARRANGE FOR A LICENSE? MIKE."

2 AND MIKE HOMER'S POSITION AT NETSCAPE WAS WHAT AT

3 THIS TIME?

4 A. MIKE, AT THAT TIME, HAD BEEN A HEAD OF MARKETING.

5 Q. DO YOU KNOW WHAT SCRIPTING ENGINE HE'S REFERRING TO

6 BEYOND WHAT'S SAID ON THE FRONT FACE OF THE E-MAIL?

7 A. NO. I PRESUME IT'S THE SAME ONE.

8 Q. WHAT PROGRAM OR UTILITY WAS MANAGED BY THIS SCRIPTING

9 ENGINE?

10 A. I DON'T KNOW.

11 Q. WAS IT SLIP, STANDING FOR SERIAL LINE INTERNET

12 PROTOCOL?

13 A. I DON'T KNOW.

14 Q. I TAKE IT THAT AT LEAST IN THIS RESPECT THE LAST

15 SENTENCE OF PARAGRAPH 106 OF YOUR DIRECT TESTIMONY ON PAGE

16 60 IS IN ERROR?

17 A. NO, SIR.

18 Q. WELL, I THINK, DOESN'T THIS E-MAIL SAY THAT YOU GOT

19 THE SCRIPTING ENGINE FOR WINDOWS 95 ON JUNE 20 OR BEFORE

20 JUNE 20?

21 A. THAT'S NOT WHAT I'M SAYING.

22 Q. THANK YOU.

23 A. CAN I EXPLAIN?

24 Q. I HAVE NO PENDING QUESTION. I THINK YOUR DIRECT

25 TESTIMONY SPEAKS FOR ITSELF IN THIS RESPECT, AND THE COURT

19

1 CAN REACH ITS OWN CONCLUSION.

2 THE COURT: DO YOU HAVE AN EXPLANATION OF YOUR

3 ANSWER TO THE LAST QUESTION?

4 THE WITNESS: YES, SIR, I DO.

5 MR. WARDEN: FINE.

6 THE WITNESS: AS I UNDERSTAND IT, AND I TESTIFIED

7 LATER IN MY TESTIMONY, WE DIDN'T GET THE SCRIPTING ENGINE

8 UNTIL ALMOST A YEAR AND SOME MONTHS LATER AFTER ALL THIS

9 BACK AND FORTH. THE SCRIPTING ENGINE--WHAT I SAID, WE

10 ALSO NEEDED INFORMATION FROM MICROSOFT, INFORMATION

11 INCLUDING AN ENGINE THEN IN BETA, BUT WE WANTED THE

12 SCRIPTING ENGINE. THE ENGINE WAS IN TEST AT THAT TIME.

13 AND WE DIDN'T GET IT, AS I TESTIFIED LATER, FOR ALMOST A

14 YEAR AFTER ALL PUSHING AND PULLING. AFTER THEY WERE

15 ALREADY DISTRIBUTING IT TO OTHER VALUE-ADDED RESELLERS, OR

16 ISV'S, EXCUSE ME, AND WE COULDN'T SEEM TO GET A COPY OF

17 IT.

18 BY MR. WARDEN:

19 Q. MR. BARKSDALE, I DON'T WANT THIS TO DEGENERATE INTO

20 ARGUMENT, BUT LET'S GO BACK THROUGH THIS PARAGRAPH. IT

21 SAYS, "WE NEEDED CERTAIN TECHNICAL DATA FOR OUR BROWSER TO

22 BE READY FOR RELEASE WITH WINDOWS 95;" CORRECT?

23 A. YES.

24 Q. AND THEN IT GIVES THREE EXAMPLES OF WHAT IT WAS YOU

25 NEEDED, THE SECOND OF WHICH IS A SCRIPTING ENGINE IN BETA;

20

1 IS THAT CORRECT?

2 A. THEN IN BETA.

3 Q. A SCRIPTING ENGINE IN BETA.

4 A. IN--

5 Q. EXCUSE ME. THE LAST SENTENCE SAYS, "WE STILL HAD NOT

6 RECEIVED THAT TECHNICAL INFORMATION WHEN THE JUNE 21,

7 1995, MEETING TOOK PLACE."

8 A. CORRECT.

9 Q. AREN'T YOU SAYING THAT YOU DIDN'T HAVE THE BETA OF

10 THE SCRIPTING ENGINE ON JUNE 21, 1995?

11 A. I DON'T THINK THAT'S WHAT I SAID.

12 Q. THANK YOU.

13 GOING BACK TO THE DIALER, ISN'T IT TRUE THAT

14 NETSCAPE HAD LICENSED CODE FROM ANOTHER VENDOR, SHIVA,

15 THAT ENABLED YOU TO DO DIALUP CONFIGURATION?

16 A. AT THAT TIME I BELIEVE WE HAD.

17 Q. BUT ISN'T IT ALSO TRUE THAT YOU DIDN'T ASK SHIVA TO

18 PROVIDE YOU WITH SOFTWARE ENABLING YOU TO DO DIALUP

19 CONFIGURATION IN WINDOWS 95?

20 A. I DON'T KNOW THAT.

21 Q. IF YOU DIDN'T DO IT, WHY DIDN'T YOU DO IT?

22 A. I PRESUME BECAUSE WE THOUGHT WE WERE GOING TO GET IT

23 FROM MICROSOFT.

24 Q. ISN'T IT ALSO TRUE THAT TROY CHEVALIER KNEW THAT

25 THERE WAS NO RNA API IN EXISTENCE ON JUNE 21, 1995?

21

1 A. I DON'T KNOW THAT.

2 Q. ISN'T IT TRUE THAT WITHOUT AN API, YOUR DEVELOPERS

3 WOULD HAVE HAD TO INSTRUCT NAVIGATOR TO REWRITE BINARY

4 CODE IN THE WINDOWS REGISTRY ITSELF?

5 A. WITHOUT IT THEY WOULD HAVE HAD TO DO SOMETHING LIKE

6 THAT.

7 Q. AND ARE THERE REASONS WHY AN ISV WOULD NOT WANT TO DO

8 THAT?

9 A. ARE THERE REASONS WHY YOU WOULDN'T WANT TO?

10 Q. YES.

11 A. IT'S A LOT OF WORK.

12 Q. ANYTHING ELSE BESIDES A LOT OF WORK?

13 A. THERE ARE PROBABLY OTHER REASONS. I MEAN--

14 Q. DOES THE REGISTRY CODE CHANGE OVER TIME?

15 A. IT COULD, DOES.

16 Q. ISN'T IT TRUE THAT MR. CHEVALIER--IS THAT CORRECT?

17 A. CHEVALIER.

18 Q. --CONCLUDED THAT THE SOLUTION PROPOSED BY MICROSOFT

19 TO THIS PROBLEM WAS, FROM A TECHNICAL PERSPECTIVE, NOT

20 UNREASONABLE?

21 A. IT MAY BE.

22 Q. NOW, GOING ON TO THE THIRD EXAMPLE GIVEN OF CERTAIN

23 TECHNICAL DATA YOU NEEDED TO BE READY FOR RELEASE WITH

24 WINDOWS 95 IN PARAGRAPH 106, IT'S IN THE LAST LINE THERE

25 ON PAGE 59, THAT WAS THE MOST RECENT VERSION OF

22

1 WINDOWS 95.

2 A. CORRECT.

3 Q. WHAT BUILD OF WINDOWS 95 DO YOU MEAN?

4 A. I DON'T KNOW. WHATEVER THE LATEST WAS.

5 Q. WAS IT BUILD 490?

6 A. I HAVE NO WAY OF KNOWING THAT.

7 Q. YOU DON'T KNOW WHICH ONE WAS ASKED FOR, WHICH ONE WAS

8 THE LATEST?

9 A. MY ENGINEERS WERE TELLING ME THEY NEEDED TWO TO THREE

10 THINGS TO GET THE PRODUCT READY. I SAID FINE, I WILL HELP

11 YOU OUT. WE WILL TALK ABOUT THAT. WE WERE TALKING ABOUT

12 A LOT OF OTHER THINGS. I NEVER MAINTAINED THAT I HAD THE

13 TECHNICAL ABILITY TO UNDERSTAND THE DETAIL OF SOME OF

14 THESE SPECIFIC TECHNICAL PRODUCTS, NOR DO I MAINTAIN THAT

15 NOW.

16 Q. WELL, I'M NOT ASKING ABOUT DETAILS OF TECHNICAL

17 PRODUCTS. YOU MAKE REFERENCE TO THE MOST RECENT VERSION

18 OF WINDOWS 95.

19 A. THAT'S WHAT MY ENGINEERS TOLD ME THAT THEY WANTED, SO

20 I SAID FINE, I WILL TRY TO GET IT FOR YOU.

21 Q. AND WHAT IS THE BASIS--

22 A. THERE WAS JUST--THEY WERE TELLING US OR ME GETTING

23 READY FOR THIS, THEY SENT ME SOME INFORMATION ASKING FOR

24 THESE THINGS, AND I SAID FINE.

25 Q. WHEN DID THEY TELL YOU THEY WANTED THE MOST RECENT

23

1 BUILD OF WINDOWS 95?

2 A. I DON'T REMEMBER.

3 Q. BUT DO YOU HAVE ANY BASIS FOR BELIEVING THAT

4 BUILD 490 WAS NOT THE MOST RECENT VERSION OF WINDOWS 95 ON

5 JUNE 21, 1995?

6 A. I HAVE INDICATED I HAVE NO IDEA ABOUT THINGS LIKE

7 THAT.

8 MR. WARDEN: I OFFER DEFENDANT'S EXHIBIT 46.

9 MR. BOIES: I DON'T HAVE A COPY.

10 (PAUSE.)

11 MR. BOIES: NO OBJECTION, YOUR HONOR.

12 BY MR. WARDEN:

13 Q. AND I DIRECT THE WITNESS'S AND THE COURT'S ATTENTION

14 TO THE THIRD PARAGRAPH FROM THE BOTTOM OF THE PAGE WHICH

15 SAYS, "ROB, THANKS FOR BUILD 490." AND THIS, OF COURSE,

16 IS FROM NETSCAPE TO MICROSOFT, AND IT'S DATED WEDNESDAY,

17 JUNE 14, 1995.

18 THE COURT: WHERE DOES IT SHOW IT WAS SENT TO

19 MICROSOFT?

20 MR. WARDEN: IT'S FROM TROY, MR. CHEVALIER.

21 TROY@NETSCAPE TO ROBWI@MICROSOFT.COM. MICROSOFT.COM IS

22 MICROSOFT.

23 THE COURT: OKAY. DEFENDANT'S 46 IS ADMITTED.

24 (DEFENDANT'S EXHIBIT NO. 46 WAS

25 ADMITTED INTO EVIDENCE.)

24

1 BY MR. WARDEN:

2 Q. PAGE 60, PARAGRAPH 108 OF YOUR DIRECT.

3 A. PAGE WHAT?

4 Q. PAGE 60, PARAGRAPH 108.

5 A. ALL RIGHT.

6 Q. YOU REFER THERE IN THE THIRD SENTENCE OR FOURTH

7 SENTENCE TO MR. ANDREESSEN TYPING NOTES OF THE JUNE 21

8 MEETING ON HIS NOTEBOOK COMPUTER; DO YOU SEE THAT?

9 A. YES.

10 Q. WHY DID HE TAKE THESE NOTES?

11 A. AT THAT TIME, MARC USED A LAPTOP COMPUTER. IN MOST

12 MEETINGS HE WOULD TAKE NOTES, AS HE DID IN THIS MEETING.

13 AND ALSO INDICATED THAT I MAY HAVE ASKED HIM TO TAKE

14 NOTES.

15 Q. DID YOU INVITE HIM TO ATTEND THE MEETING?

16 A. HE WOULD BE THE MAIN GUY TO BE IN THE MEETING. HE

17 PROBABLY INVITED ME.

18 Q. BECAUSE IT WAS ABOUT TECHNICAL ISSUES?

19 A. YES.

20 Q. DID MR. ANDREESSEN HAVE AS AT LEAST ONE OF HIS

21 REASONS FOR TAKING THESE NOTES THAT, QUOTE, IT MIGHT BE A

22 TOPIC OF DISCUSSION AT SOME POINT WITH THE U.S. GOVERNMENT

23 ON ANTITRUST ISSUES, CLOSED QUOTE?

24 A. NOT THAT I'M AWARE OF.

25 Q. MR. ANDREESSEN'S DEPOSITION WAS TAKEN BY THE

25

1 ANTITRUST DIVISION IN THE STATE OF TEXAS AND OTHER STATES

2 ON AUGUST 28TH, 1997, DURING THE INVESTIGATIVE PERIOD

3 PRIOR TO THIS PROCEEDING, AND HE WAS ASKED THE FOLLOWING

4 QUESTIONS AND HAD GIVEN THE FOLLOWING ANSWERS, (READING):

5 QUESTION: DOES EXHIBIT 29--THAT'S HIS

6 NOTES--APPEAR TO BE A TRUE AND CORRECT COPY OF

7 THE NOTES THAT YOU TOOK AT THAT MEETING?

8 ANSWER: YES.

9 QUESTION: WHY DID YOU TRY TO TAKE VERBATIM

10 NOTES AT A MEETING LIKE THIS?

11 ANSWER: IT WAS A MEETING THAT I THOUGHT I

12 WOULD WANT TO REMEMBER IN GREAT DETAIL. I

13 THOUGHT IT MIGHT BE A TOPIC OF DISCUSSION AT SOME

14 POINT WITH U.S. GOVERNMENT ON ANTITRUST ISSUES.

15 I ALSO WANTED TO MAKE SURE THAT NETSCAPE

16 EXECUTIVES WHO WEREN'T PRESENT KNEW EXACTLY WHAT

17 TRANSPIRED.

18 DID MR. ANDREESSEN EVER TELL YOU THAT HE WAS

19 TAKING THE NOTES FOR THAT PURPOSE?

20 A. HE NEVER TOLD ME THAT.

21 Q. DID YOU ASK HIM TO TAKE NOTES FOR THAT PURPOSE?

22 A. NO. I MAY HAVE ASKED HIM TO TAKE NOTES.

23 Q. NOW, UP TO THIS POINT, BY YOUR OWN TESTIMONY, I

24 BELIEVE, AND THE MANY DOCUMENTS WE HAVE SEEN, ALL OF YOUR

25 DEALINGS WITH MICROSOFT HAD BEEN FRIENDLY, CORDIAL AND

26

1 COOPERATIVE; IS THAT CORRECT?

2 A. OF THE ONES WE IDENTIFIED, I WOULD SAY THOSE WERE.

3 THERE MAY HAVE BEEN OTHER MEETINGS. IN FACT, I THINK

4 THERE WERE, WHERE ON SOME TECHNICAL LEVEL THERE WERE

5 MEETINGS WHERE THERE WAS PUSHING AND SHOVING A LITTLE BIT,

6 BUT I WOULD SAY, IN GENERAL, THE ONES I HAD HAD HAD BEEN

7 FRIENDLY.

8 Q. WHAT REASON WOULD MR. ANDREESSEN HAVE HAD AT THIS

9 POINT TO BELIEVE THAT THESE NOTES MIGHT BE A TOPIC OF

10 DISCUSSION AT SOME POINT WITH THE U.S. GOVERNMENT ON

11 ANTITRUST ISSUES?

12 A. THE ONLY REASON I CAN THINK OF, AT THAT TIME, OR

13 THEREABOUT THAT TIME, WE ALREADY HAD INQUIRIES FROM THE

14 DEPARTMENT OF JUSTICE IN REGARD TO THE AOL MATTER THAT I

15 MENTIONED THE OTHER DAY. THAT WOULD BE THE REASON, I

16 WOULD ASSUME.

17 Q. WAS AOL A TOPIC OF CONVERSATION ON THE AGENDA FOR

18 THIS MEETING?

19 A. NO, BUT I THINK MICROSOFT WAS A TOPIC OF

20 CONVERSATION, AND THAT MAY EXPLAIN WHY HE SAID THAT. I

21 DON'T KNOW. THAT WOULD BE MR. ANDREESSEN'S OPINION.

22 Q. AT THE DEPOSITION THAT WAS ONE OF THE QUESTIONS, NOT

23 MR. ANDREESSEN'S ANSWER, MADE IN REFERENCE TO VERBATIM

24 NOTES. THESE NOTES OF HIS AREN'T VERBATIM NOTES, ARE

25 THEY?

27

1 A. THEY DON'T APPEAR TO BE IN ALL CASES.

2 Q. ABOUT HOW LONG DID THIS MEETING LAST?

3 A. IT WAS A COUPLE OF THREE HOURS, AS BEST AS I CAN

4 REMEMBER.

5 Q. AND HE DIDN'T TAKE DOWN EVERYTHING THAT WAS SAID?

6 A. NO, SIR.

7 Q. ARE THERE STATEMENTS THAT WERE MADE BY ANY OF THE

8 NETSCAPE ATTENDEES AT THE MEETING THAT ARE NOT IN THE

9 NOTES?

10 A. I'M SURE THERE ARE.

11 Q. AND NO ONE FROM NETSCAPE ADVISED THE MICROSOFT

12 REPRESENTATIVES THAT WHAT PURPORTED TO BE NOTES OF THE

13 MEETING WOULD BE TAKEN FOR THE PURPOSE OF HAVING

14 DISCUSSIONS WITH THE ANTITRUST AUTHORITIES; AM I CORRECT?

15 A. I WOULDN'T REMEMBER THAT, NO. I DON'T REMEMBER THAT

16 EVER BEING DISCUSSED.

17 Q. IF THAT HAD BEEN DISCUSSED, WOULDN'T YOU REMEMBER IT?

18 A. I PROBABLY WOULD HAVE.

19 Q. GOING TO PARAGRAPH 109 THAT JUST BARELY BEGINS ON

20 PAGE 60, AND IT'S VERY SHORT, WOULD YOU READ THAT TO

21 YOURSELF, PLEASE.

22 A. "THE TECHNOLOGY DISCUSSIONS WERE LARGELY

23 UNREMARKABLE"--

24 Q. JUST READ IT TO YOURSELF, THANKS.

25 A. YES, I HAVE READ IT.

28

1 Q. WHEN, IN THE MEETING, DID THE TECHNICAL PRESENTATIONS

2 OCCUR?

3 A. PRETTY MUCH THROUGHOUT THE COURSE OF THE MEETING. I

4 REMEMBER THERE WERE DISCUSSIONS AT THE FIRST MEETING.

5 I ALSO REMEMBER THEY BROUGHT IN AND GAVE A

6 DEMONSTRATION, COMPUTER DEMONSTRATION, OF ONE OF THE

7 PRODUCTS AT THE END OF THE MEETING, SO THEY TOOK PLACE

8 OVER THE COURSE OF THE MEETING.

9 Q. WHAT PERCENTAGE OF THE TIME IN THE MEETING WAS TAKEN

10 UP BY TECHNICAL PRESENTATIONS?

11 A. A LARGE PART OF THE TIME. I DON'T REMEMBER.

12 PERCENTAGE-WISE, IT WAS--THE TECHNOLOGY DISCUSSION, AS I

13 REMEMBER, WE WOVE IN AND OUT OF THEM. THEY WERE

14 INTERSPERSED. DIFFERENT MEMBERS OF THE MICROSOFT TEAM

15 SEEMED TO HAVE DIFFERENT AREAS THEY WANTED TO DISCUSS THAT

16 THEY HAD EXPERTISE IN, WHICH IS, YOU KNOW, SORT OF THE

17 GROUP THAT WAS THERE, SO EACH WOULD KIND OF COVER HIS OR

18 HER SPECIALTY.

19 MR. WARDEN: I HAVE HAD MARKED FOR

20 IDENTIFICATION, AND I WOULD LIKE TO PLACE BEFORE THE

21 WITNESS AND THE COURT, DEFENDANT'S EXHIBIT 47.

22 BY MR. WARDEN:

23 Q. IS THIS THE AGENDA FOR THE MEETING ON JUNE 21 BETWEEN

24 NETSCAPE AND MICROSOFT?

25 A. APPEARS TO BE.

29

1 MR. WARDEN: I OFFER IT.

2 MR. BOIES: YOUR HONOR, I COULD BE MISTAKEN, BUT

3 MY RECOLLECTION IS THIS DOCUMENT WAS PRODUCED TO US FROM

4 MICROSOFT'S FILES. THIS IS A MICROSOFT-PRODUCED DOCUMENT,

5 ATTACHED TO ANOTHER TWO PAGES. I HAVE NO OBJECTION TO

6 RECEIPT OF THIS PAGE NOW. IF I'M CORRECT, I THINK THE

7 OTHER TWO PAGES SHOULD BE ADDED TO THE EXHIBIT. IF I'M

8 WRONG, OBVIOUSLY WE WILL HAVE TO DO THAT.

9 MR. WARDEN: WE WILL LOOK TO SEE IF IT WAS

10 ATTACHED.

11 THE COURT: I WILL ACCEPT YOUR REPRESENTATION.

12 MR. WARDEN: I DON'T KNOW WHETHER IT WAS AT THIS

13 POINT.

14 IS THIS ADMITTED, YOUR HONOR?

15 THE COURT: I TAKE IT THERE IS NO OBJECTION?

16 MR. BOIES: THERE IS NO OBJECTION TO THIS PAGE.

17 THE COURT: IF THERE ARE TWO ADDITIONAL PAGES

18 FOUND, THEY WILL BE INCORPORATED INTO THE EXHIBIT, BUT

19 DEFENDANT'S 47 IS ADMITTED.

20 (DEFENDANT'S EXHIBIT NO. 47 WAS

21 ADMITTED INTO EVIDENCE.)

22 BY MR. WARDEN:

23 Q. DID THE MEETING BASICALLY FOLLOW THE AGENDA REFLECTED

24 IN DEFENDANT'S EXHIBIT 47, MR. BARKSDALE?

25 A. I DON'T REMEMBER EXACTLY, BUT I WOULDN'T ARGUE THAT

30

1 IT FOLLOWED IT IN GENERAL. I DON'T KNOW THAT WE STUCK TO

2 THESE EXACT TIMES OR ANYTHING. THESE WERE SOME OF THE

3 ITEMS THAT WERE DISCUSSED. I THINK WE INTENDED FOR IT TO,

4 AND I PRESUME IT DID.

5 Q. SO, AFTER A HALF-HOUR OVERVIEW/REVIEW--WE KNOW THAT

6 THESE TIMES ARE HOPED FOR, NOT ACTUAL--THE NEXT TOPIC ON

7 THE AGENDA IS CLIENT PRODUCTS AND TECHNOLOGIES. DO YOU

8 RECALL THAT THAT WAS THE FIRST DISCUSSION AFTER THE

9 REVIEW?

10 A. I DON'T RECALL, BUT I WOULDN'T QUESTION THAT.

11 Q. AND WAS THAT DISCUSSION LED BY THOMAS REARDON AND

12 CHRIS JONES FROM MICROSOFT?

13 A. AS I HAVE STATED, I DON'T REMEMBER EXACTLY WHAT

14 MR. REARDON OR MR. JONES LOOKED LIKE, SO I NEVER, ON MY

15 OWN RECOLLECTION, REMEMBERED--I NEVER MET THESE MEN

16 BEFORE, NOR SINCE DO I REMEMBER, BUT PURPORTED TO BE

17 THERE. IF THEY SAID THEY LED THE DISCUSSIONS, I WOULDN'T

18 ARGUE WITH THAT.

19 Q. AND DURING THAT DISCUSSION DIDN'T THE MICROSOFT

20 REPRESENTATIVES, WHOMEVER THEY MIGHT HAVE BEEN, GAVE

21 NETSCAPE INFORMATION ON WHAT WAS GOING TO BE IN THE

22 WINDOWS 95 PLATFORM?

23 A. THEY CERTAINLY THAT WAS DISCUSSED DURING THE MEETING.

24 I WOULDN'T ARGUE THAT IT WAS DISCUSSED AT THAT TIME.

25 Q. AND THEY TALKED ABOUT THE WININET API SET; IS THAT

31

1 CORRECT?

2 A. THEY MAY HAVE.

3 Q. AND THEN YOU, YOURSELF, TALKED ABOUT SERVER

4 TECHNOLOGY; IS THAT CORRECT?

5 A. I MAY HAVE.

6 Q. AND DO YOU KNOW, OR DO YOU RECALL, MR. ALLARD FROM

7 MICROSOFT?

8 A. HE'S LISTED AS ONE OF THE PEOPLE HERE.

9 Q. DO YOU RECALL HIS TALKING ABOUT THE CATAPULT API'S?

10 A. AGAIN, I THINK MARC'S NOTES REFERRED TO THAT. I

11 DON'T REMEMBER THAT SPECIFICALLY.

12 Q. DO YOU KNOW WHAT CATAPULT API'S ARE?

13 A. I THINK IN MARC'S NOTES HE TALKS ABOUT THEM. I SAW

14 ANOTHER REFERENCE FROM MARC EVEN QUESTIONING WHAT THEY

15 WERE. TODAY, I DON'T KNOW--I DON'T REMEMBER EXACTLY WHAT

16 THEY WERE. THEY WERE INTERNET API'S, AS I REMEMBER.

17 Q. INTERNET INFORMATION SERVER, API'S?

18 A. SOMETHING OF THAT NATURE.

19 Q. DO YOU RECALL MR. ALLARD'S HAVING DESCRIBED THE

20 ARCHITECTURE OF THE INTERNET INFORMATION SERVER THAT

21 MICROSOFT HAD RECENTLY DEVELOPED?

22 A. I VAGUELY REMEMBER THAT I-S, IT SEEMS TO ME, WAS AN

23 ITEM DISCUSSED.

24 AGAIN, I DON'T KNOW MR. ALLARD SPECIFICALLY, BUT

25 I WILL TAKE YOUR WORD FOR IT THAT HE WAS THE ONE COVERING

32

1 THAT PART OF IT. THE NAMES ARE NOT ASSOCIATED WITH THE

2 TOPIC, SO I FIND IT HARD TO FOLLOW.

3 Q. OKAY. AND DID YOU, MR. BARKSDALE, OR ONE OF YOUR

4 COLLEAGUES FROM NETSCAPE, DISCUSS THE POSSIBILITY OF

5 MARKETING YOUR COMMERCE SERVER OR COMMUNICATIONS SERVER ON

6 TOP OF WINDOWS NT SERVER OR MICROSOFT'S INTERNET

7 INFORMATION SERVER?

8 A. WE PROBABLY DID. I HAD DISCUSSED THAT IN THE EARLY

9 JUNE MEETING WITH THE OTHER THREE GENTLEMEN, AND THAT WAS

10 AN ITEM I WANTED THEM TO CONSIDER, SO I WOULDN'T BE

11 SURPRISED IF THAT WAS DISCUSSED.

12 Q. AND THEN IF THE AGENDA WAS FOLLOWED, THE NEXT SUBJECT

13 WAS OFFERING PRODUCTS AND TECHNOLOGIES. WAS THAT TOPIC

14 DISCUSSED AT SOME TIME DURING THE MEETING?

15 A. I BELIEVE IT WAS, YES.

16 Q. AND DURING THE COURSE OF THAT DISCUSSION, DID YOU AND

17 MIKE HOMER ASK A SERIES OF QUESTIONS ABOUT A MICROSOFT

18 TECHNOLOGY UNDER DEVELOPMENT CALLED "BLACKBIRD"?

19 A. I REMEMBER BLACKBIRD WAS DISCUSSED DURING THE COURSE

20 OF THESE DISCUSSIONS, SO I WOULDN'T ARGUE THAT WE ASKED

21 QUESTIONS ABOUT IT.

22 Q. AND DID MICROSOFT, ONE OF THE MICROSOFT

23 REPRESENTATIVES PRESENT, SAY THAT MICROSOFT WANTED

24 NETSCAPE TO BE ABLE TO WRITE BLACKBIRD CONTENT?

25 A. I THINK THEY DID, AND I THINK MARC'S NOTES REFLECT

33

1 THAT.

2 Q. AND THEY WANTED THE USERS OF YOUR WEB-BROWSING

3 SOFTWARE TO BE ABLE TO RENDER BLACKBIRD CONTENT, DID THEY

4 NOT?

5 A. THAT WAS ONE OF THOSE THINGS I MENTIONED TO YOU

6 EARLIER OF TYPES OF TECHNOLOGIES THEY WERE INTERESTED IN

7 INCLUDING IN OUR BROWSER, YES.

8 Q. AND DO YOU RECALL RICHARD WOLF FROM MICROSOFT?

9 A. WITH THE SAME CAVEATS I HAVE GIVEN BEFORE, SINCE I

10 DIDN'T KNOW THESE PEOPLE.

11 Q. OKAY. DID HE OR SOMEONE FROM MICROSOFT TALK ABOUT

12 DOCOBJECT?

13 A. THAT WAS THE DEMONSTRATION, I BELIEVE, NOW THAT YOU

14 MENTIONED THAT, THAT WAS GIVEN, AND I STEPPED OUT OF THE

15 ROOM DURING THAT DEMONSTRATION.

16 Q. AND THAT WAS A DEMO ON A LAPTOP; RIGHT?

17 A. YES, SIR, I THINK SO.

18 THEY HAD BROUGHT THIS DEMONSTRATION WITH THEM.

19 AND, IN FACT, I THINK ONE OR TWO OTHER PEOPLE MAY HAVE

20 COME INTO THE ROOM TO SEE THAT.

21 Q. AND YOU LEFT?

22 A. I LEFT.

23 I SAW A MINUTE OR TWO OF IT, EXCUSE ME, AND THEN

24 I THINK I HAD TO GO DO SOMETHING ELSE, AND I LEFT AND CAME

25 BACK.

34

1 Q. HOW LONG WERE YOU GONE FROM THE MEETING,

2 APPROXIMATELY?

3 A. I DON'T REMEMBER.

4 Q. DID MICROSOFT ASK NETSCAPE TO SUPPORT DOCOBJECT IN

5 NETSCAPE'S WEB-BROWSING SOFTWARE?

6 A. I BELIEVE THEY DID, YES.

7 Q. AND DOCOBJECT WAS BEING DEVELOPED FOR APPLICATIONS

8 LIKE WORD AND EXCEL THAT WERE BEING WRITTEN FOR

9 WINDOWS 95; ISN'T THAT CORRECT?

10 A. THAT'S CORRECT.

11 Q. DO YOU RECALL BARB FOX FROM MICROSOFT?

12 A. I DO. I BELIEVE I HAVE TESTIFIED OR SAID BEFORE I

13 HAD MET BARB, ACTUALLY, AT ANOTHER COUPLE OF MEETINGS WE

14 HAD WITH MICROSOFT ON THE SECURITY TECHNOLOGIES, AND I

15 BELIEVE SHE WAS AT THE MEETING. SHE'S LISTED HERE AS

16 BEING AT THE MEETING.

17 Q. DO YOU RECALL WHAT DISCUSSION SHE LED, OR

18 PRESENTATION SHE MADE, AT THE MEETING?

19 A. NO, BUT KNOWING HER FIELD OF EXPERTISE, IT WAS

20 PROBABLY THE STT DISCUSSION.

21 Q. AND DID YOU DISCUSS WHETHER MICROSOFT'S STT

22 TECHNOLOGY WAS COMPLIMENTARY TO SLL, WHICH NETSCAPE HAD

23 DEVELOPED?

24 A. MAYBE TO CLEAR IT UP A LITTLE BIT. WE OPERATED

25 DIFFERENT LAYERS OF THE PROTOCOL AND THE BROWSER, SO WE

35

1 HAD DEVELOPED AN OPEN SECURITY PRODUCT CALLED "SECURE

2 SOCKET LAYER," WHICH WAS AVAILABLE TO RUN ON A VARIETY OF

3 PLATFORMS, AND MICROSOFT HAD A SPECIAL NEW TECHNOLOGY

4 CALLED STT THAT THEY WANTED US TO ADOPT OR WORK WITH THEM

5 ON, AND I THINK WE HAD DISCUSSIONS ABOUT THAT, HOW THAT

6 MIGHT BE ACCOMPLISHED.

7 I ALSO BELIEVE THAT'S IN ROSEN'S NOTES OF THE

8 EARLY JUNE MEETING, SO I WOULDN'T BE SURPRISED IF WE

9 DIDN'T TALK ABOUT THAT. I REMEMBER THAT WAS A BIG ISSUE

10 AT THAT TIME BETWEEN OUR COMPANIES AS WELL AS OUR

11 CUSTOMERS, VISA AND MASTERCARD AND THOSE PEOPLE.

12 Q. AND DID MS. FOX DISCUSS THE SERIES OF MEETINGS SHE

13 HAD WITH SOME OF YOUR COLLEAGUES ABOUT THESE TWO

14 TECHNOLOGIES GOING BACK FOR SEVERAL MONTHS?

15 A. LIKE I SAID, I THINK THAT WAS THE FIRST TIME I MET

16 BARB FOX WAS AT ONE OF THOSE EARLIER MEETINGS. SHE WAS

17 UPSTAIRS IN A MEETING, AND I ATTENDED MOST OF THAT

18 MEETING, AND THAT'S WHEN I FIRST MET HER. SHE MAY HAVE

19 BROUGHT THAT BACK UP IN JUNE.

20 Q. NOW, WHEN DID YOU STEP OUT OF THE MEETING FOR YOUR

21 PRIVATE CHAT WITH MR. ROSEN?

22 A. IT SEEMED TO ME WE TOOK A BREAK SOMEWHERE OR ANOTHER

23 IN THE AFTERNOON, AND PEOPLE JUST KIND OF GOT UP AND WENT

24 TO THE RESTROOM AND WHATNOT.

25 Q. AND GOING TO PARAGRAPH 110 OF YOUR TESTIMONY,

36

1 MR. BARKSDALE, AND THE SENTENCE THAT SAYS, "THEY PROPOSE

2 THAT A LINE BE DRAWN," DO YOU SEE THAT?

3 A. YES.

4 Q. WHO FIRST MENTIONED "A LINE" IN THE MEETING?

5 A. AS I HAVE INDICATED, I BELIEVE, IN PRIOR--IN MY

6 DEPOSITION, I DON'T PERSONALLY REMEMBER THESE PEOPLE

7 BECAUSE, LIKE I SAID, I HAD ONLY MET TWO OF THEM

8 PERSONALLY, DAN AND BARBARA, AND THE NOTES OF THE MEETING

9 INDICATE THAT IT WAS CHRIS JONES.

10 Q. AND WHAT WAS--

11 A. AGAIN, I WOULD HAVE TO PUT THE SAME CAVEAT THERE AS I

12 DID ON THE OTHERS. SINCE I DIDN'T KNOW THEM, I WOULD

13 REFER TO THE NOTES.

14 Q. WHAT WAS ON EITHER SIDE OF THIS LINE, TO THE BEST OF

15 YOUR RECOLLECTION, AS YOU SIT HERE TODAY, WITHOUT

16 REFERENCE TO PIECES OF PAPER?

17 A. WELL, THAT WAS THE PART THAT--ACTUALLY, I GOT MAYBE A

18 LITTLE MORE ENGAGED IN THE DISCUSSION ON THE TECHNOLOGY

19 SIDE BECAUSE WHEN IT WAS RAISED ABOUT THIS LINE, AND I

20 TESTIFIED ABOUT THIS ALSO IN MY DEPOSITION, THAT I KEPT

21 ASKING, "WELL, WHERE IS THIS LINE GOING TO END, AND WHAT

22 KEEPS THE LINE FROM MOVING?" AND WE HAD A DISCUSSION

23 ABOUT, "WELL, YOU KNOW, IT HAS TO BE DECIDED ON."

24 AND LATER--BUT TO ANSWER YOUR SPECIFIC QUESTION,

25 THE LINE IMPLIED THAT ABOVE THE BROWSER ON WINDOWS 95, AND

37

1 ON EITHER SIDE OF WINDOWS 95--IN OTHER WORDS, WINDOWS 3.1,

2 MACINTOSH, UNIX--WE COULD DEVELOP PRODUCTS THERE, AND

3 APPLICATIONS ABOVE THE BROWSER APPLICATION WE COULD

4 DEVELOP, THEY WOULD LIKE FOR US--PUT IT THAT WAY--THEY

5 WOULD LIKE FOR US TO DEVELOP THOSE AND WORK WITH

6 MICROSOFT; AND THAT THEY, MICROSOFT, WERE GOING TO TAKE

7 THE BROWSER AND BUILD IT FREE WITH THE OPERATING SYSTEM,

8 OR PUT IT TOGETHER WITH OPERATING SYSTEM IN SUCH A WAY

9 THAT IT HAD NO ECONOMIC VALUE. AND NETSCAPE, WE WERE SORT

10 OF FOOLISH TO EVEN CONSIDER DOING THAT.

11 Q. WHAT WOULD BE THE APPLICATION ABOVE THE BROWSER ON

12 WINDOWS 95?

13 A. WELL, THAT WAS PART OF--THE TROUBLING PART OF THE

14 DISCUSSION. IT WOULD BE A LITTLE DIFFICULT TO FIGURE OUT

15 WHAT THAT MIGHT BE UNLESS YOU GO UP TO THE SERVER WHERE

16 THEY WERE WANTING US TO TALK ABOUT APPLICATIONS LIKE WHERE

17 YOU ASKED ME EARLIER ABOUT THESE OTHER APPLICATIONS WE HAD

18 BUILT.

19 THERE ARE APPLICATIONS THAT RUN IN CONJUNCTION

20 WITH BROWSERS, THE ISV'S THAT I MENTIONED THAT WERE BUILT

21 PARTLY ON OUR PLATFORM TODAY OR PARTLY ON IE. THOSE KINDS

22 OF APPLICATIONS, THERE ARE A NUMBER OF SPECIFIC

23 APPLICATIONS LIKE THE INTUIT APPLICATION THAT RUNS AROUND

24 THE BROWSER, THE AOL APPLICATION THAT RUNS AROUND THE

25 BROWSER. AND THAT'S WHERE IT GOT VERY, VERY CONFUSING TO

38

1 ME BECAUSE THE LINE SEEMED TO AUTOMATICALLY EXCLUDE WHAT

2 WE THOUGHT WAS GOING TO BE ONE OF OUR VERY BEST PRODUCTS.

3 PRIOR TO THAT, I HAD THOUGHT THAT MICROSOFT

4 CERTAINLY INTENDED TO BUILD A BROWSER, BUT I NEVER--IT

5 NEVER SUNK IN ON ME, I GUESS, THAT IT WAS GOING TO BE FREE

6 WITH THE OPERATING SYSTEM. I THOUGHT IT WOULD COMPETE

7 WITH OUR PRODUCT, AND WE WOULD COMPETE ON THE MERITS AND

8 SO FORTH.

9 AND THAT'S THE WAY--AND SO I KEPT THIS

10 CONVERSATION ABOUT WHERE IS THE LINE GOING TO BE DRAWN,

11 AND HERE WE ARE A LITTLE COMPANY, AND YOU ARE A BIG

12 COMPANY WITH UNLIMITED RESOURCES, YOU COULD MOVE THAT LINE

13 ANY TIME YOU WANT TOWARDS OUR ECONOMIC INTEREST, AND

14 THAT'S JUST THE WAY PEOPLE WORK. AND IT IRRITATED ME THAT

15 THEY BROUGHT UP THIS LINE. THAT WAS THE FIRST LINE

16 DISCUSSION I HEARD. SO, THE LINE IMPLIED DIVIDING THE

17 MARKET BETWEEN THEIR PRODUCT AND OUR PRODUCTS, AND IT

18 BOTHERED ME.

19 Q. THERE IS A LINE BETWEEN OPERATING SYSTEMS AND

20 APPLICATIONS; ISN'T THAT CORRECT?

21 A. I HAVE BEEN SAYING THAT TO THE DEPARTMENT OF JUSTICE,

22 NOW, FOR THREE YEARS. IT'S BETWEEN BROWSERS AND OPERATING

23 SYSTEMS.

24 Q. IS THERE ANYTHING GOING ON HERE OTHER THAN A

25 DIFFERENCE OF OPINION BETWEEN YOU AND MICROSOFT WHERE THE

39

1 LINE IS BETWEEN AN OPERATING SYSTEM AND A BROWSER? I

2 MEAN, AN APPLICATION?

3 A. A DIFFERENCE OF OPINION? I DON'T UNDERSTAND WHAT YOU

4 MEAN BY THAT. OBVIOUSLY, WE FEEL STRONGLY THAT A BROWSER

5 IS AN APPLICATION AND THAT A MANUFACTURER OF AN OPERATING

6 SYSTEM THAT CONTROLS 90-PLUS PERCENT OF THE WORLD'S

7 PLATFORMS AND JUST PULLS IT DOWN INTO IT HAS STEPPED

8 ACROSS THE LINE, YES, SIR.

9 Q. SO, THAT'S YOUR REAL OBJECTION, THAT THEY PULLED THE

10 BROWSER INTO THE OPERATING SYSTEM. YOU WANTED THEM TO

11 LEAVE IT OUT; IS THAT RIGHT?

12 A. STILL DO, STILL DO, STILL DO.

13 Q. AND THEY TOLD YOU THEY WERE GOING TO PUT IT IN?

14 A. THEY DID, AND THEY HAVE.

15 Q. HAD YOU EVER HAD A TECHNICAL MEETING WITH AN

16 OPERATING SYSTEM VENDOR BEFORE THE JUNE 21, 1995, MEETING?

17 A. YES, SIR. I SAID I HAD MEETINGS WITH BARB FOX, I HAD

18 MEETINGS WITH MICROSOFT, I HAD MEETINGS--

19 Q. THEY HAD EXTENSIVE TECHNICAL PRESENTATIONS LIKE THE

20 ONES AT THIS MEETING?

21 A. EXTENSIVE TECHNICAL WITH A MANUFACTURER OF AN

22 OPERATING SYSTEM PRIOR TO THIS MEETING? IT SEEMS TO ME I

23 SAT THROUGH SOME TECHNICAL BRIEFS FROM APPLE IN THE PAST,

24 CERTAINLY TECHNICAL MEETINGS WITH IBM AND THEIR OPERATING

25 SYSTEMS OVER THE COURSE OF MY BUSINESS CAREER, BUT NOT

40

1 WITH MICROSOFT ON A TECHNICAL DISCUSSION ON THE OPERATING

2 SYSTEM COMPONENTS OTHER--LET ME THINK NOW--THAN THE ONE

3 ABOUT THE SECURITY PROTOCOLS, WOULD BE THE ONLY ONE I CAN

4 REMEMBER, SITTING HERE RIGHT NOW. I MAY HAVE HAD OTHERS.

5 Q. HAD MR. ANDREESSEN HAD SUCH MEETINGS BEFORE?

6 A. YOU WOULD HAVE TO ASK HIM. I DON'T KNOW. I PRESUME

7 HE HAD.

8 Q. AND MR. ANDREESSEN WAS NOW 23 YEARS OLD; IS THAT

9 RIGHT?

10 A. YOU WOULD HAVE TO ADD FROM WHAT I TOLD YOU YESTERDAY,

11 BUT HE WOULD BE PRETTY YOUNG, I REMEMBER THAT. HE'S VERY

12 YOUNG.

13 MR. HOMER HAD BEEN IN THE OPERATING SYSTEM

14 BUSINESS. MR. HOMER HAD SIX, SEVEN, EIGHT, TEN YEARS IN

15 THIS BUSINESS WITH APPLE, WITH GO, AND SO HE CERTAINLY

16 WOULD HAVE BEEN IN TECHNICAL DISCUSSIONS ON THESE THINGS.

17 HE WAS IN THE MEETING.

18 Q. HAD MICROSOFT SUGGESTED AT THIS MEETING OR OTHERWISE,

19 AND I BELIEVE YOU MAY HAVE SAID YES ALREADY, BUT I'M GOING

20 TO ASK YOU, THAT NETSCAPE DEVELOP A BUSINESS CREATING

21 VALUE-ADDED APPLICATIONS THAT TOOK ADVANTAGE OF

22 WINDOWS 95?

23 A. I BELIEVE THEY DID.

24 THEY CERTAINLY TALKED ABOUT THAT AT THE EARLY

25 MAY--EARLY JUNE MEETING.

41

1 Q. WHAT IS THE INTERNET EXPLORER TUNEUP KIT?

2 A. NOW YOU'RE JUMPING AHEAD.

3 Q. I AM.

4 A. IT IS A RECENTLY RELEASED PRODUCT THAT NETSCAPE WILL

5 ALLOW YOU TO DOWNLOAD OFF OUR SITE, OR YOU COULD GET IT

6 FROM OTHER SITES, THAT INCLUDES SMART-BROWSING

7 FUNCTIONALITY AS A FUNCTION THAT YOU COULD ADD TO YOUR

8 INTERNET EXPLORER FREE OF CHARGE.

9 Q. SO, IT RUNS ON TOP OF ALL OF WINDOWS 98; IS THAT

10 CORRECT?

11 A. IT WOULD RUN ON TOP OF THE--I THINK IT MIGHT BE MORE

12 ACCURATE TO SAY IT RUNS IN CONJUNCTION WITH THE BROWSER OF

13 WINDOWS 98.

14 Q. AND IT TAKES LESS THAN 30 SECONDS TO DOWNLOAD OVER A

15 TYPICAL 28.8K MODEM CONNECTION?

16 A. YES. WELL, I MEAN IT'S QUICK.

17 Q. AND IT POINTS USERS OF WINDOWS WEB-BROWSING SOFTWARE

18 AT YOUR PORTAL SITE; ISN'T THAT CORRECT?

19 A. AT WHAT SITE?

20 Q. AT YOUR PORTAL SITE.

21 A. YES, IT DOES.

22 Q. WHY DO YOU MAKE THIS PRODUCT?

23 A. WELL, TO ENCOURAGE THOSE POOR MISBEGOTTEN SOULS WHO

24 USE IE THAT THERE MIGHT BE ANOTHER PORTAL THEY WOULD WANT

25 TO LOOK AT. IT'S LIKE A PLUG-IN, I THINK IS A MORE

42

1 ACCURATE TERM FOR THE PRODUCT. THERE ARE MANY, MANY

2 PLUG-INS ON THE INTERNET THAT DO VARIOUS LITTLE QUICK

3 FUNCTIONS THAT YOU ADD TO THESE BROWSERS, AND THAT'S OUR

4 ATTEMPT TO GIVE THEM ACCESS TO SMART BROWSING.

5 IT DOESN'T ACTUALLY POINT THEM TO OUR PORTAL SITE

6 IN THE NORMAL SENSE. SMART BROWSING IS A FUNCTION THAT

7 YOU COULD JUST TYPE IN THE NAME AND URL BLOCK, LIKE FORD

8 MOTOR COMPANY OR FORD, AND IT GOES TO OUR CENTER WHERE WE

9 LOOK UP IN A LIST OF SEVERAL HUNDRED-THOUSAND NAMES IN

10 DICTIONARY TERMS AND GIVE YOU ACCESS TO IT ON A FREE

11 UNFETTERED BASIS THAT IS NOT, EVEN ACCORDING TO WALT

12 MOSSBERG THIS MORNING IN THE JOURNAL, PREJUDICIAL TO OUR

13 SITE OR ANY OTHER SITES. IT'S JUST A WAY OF GETTING YOU

14 QUICK ACCESS TO DIFFERENT THINGS ON THE INTERNET.

15 Q. COULD YOU HAVE DEVELOPED ONE OF THESE TUNEUP KITS FOR

16 WINDOWS 95?

17 A. THERE MAY BE SOME TECHNICAL REASON WE COULDN'T HAVE.

18 I DON'T KNOW WHAT THAT MIGHT BE. I THINK THAT WE

19 DEVELOPED THE TUNEUP KIT TO RUN WITH IE PRODUCT, WHETHER

20 IT'S RUNNING TOP OF WINDOWS 95 OR WINDOWS 98. SO,

21 APPARENTLY, WE COULD.

22 IF YOU'RE RUNNING AN IE, I THINK WE COULD TUNE

23 YOU UP AND HELP YOU OUT.

24 Q. DIDN'T MICROSOFT REPEATEDLY URGE NETSCAPE BACK IN

25 1995 AND THEREAFTER TO DEVELOP ACTIVEX CONTROLS?

43

1 A. YES, THEY DID.

2 Q. AND--

3 A. BUT THEY ENCOURAGED EVERYBODY TO DO THAT.

4 Q. ISN'T THE TUNEUP KIT AN ACTIVEX CONTROL?

5 A. IT IS.

6 Q. DO YOU KNOW WHAT THAT MEANS, ACTIVEX CONTROL?

7 A. IT IS A TERM OF A PROPRIETARY TECHNOLOGY THAT

8 MICROSOFT HAS THAT ALLOWS YOU TO PUT VARIOUS FUNCTIONS

9 INSIDE OF A MICROSOFT-OPERATING-SYSTEM-BASED PRODUCT SO

10 THAT YOU CAN CONTROL VARIOUS FUNCTIONS, VARIOUS

11 COMPONENTS, NOT JUST BROWSERS, BUT OTHERS. WE REJECTED IT

12 AS A TECHNOLOGY BECAUSE IT WAS ONLY FOR WINDOWS, AND YOU

13 COULDN'T RUN IT ON MAC OR UNIX OR WHATEVER, SO WE TRIED TO

14 AVOID IT.

15 WE DO CERTAIN ACTIVEX CONTROLS, BUT NOT ALL, AND

16 WE DID WRITE THIS PRODUCT, AND IT MAY HAVE BEEN THE FIRST

17 ONE WE HAVE WRITTEN THAT DIDN'T NEED TO BE OPEN STANDARD

18 BECAUSE IT WAS GEARED RIGHT AT IE, WHICH, IN THIS CASE, IS

19 PROPRIETARY.

20 NOW, BEYOND THAT I'M--I COULDN'T GIVE YOU A WHOLE

21 DICHOTOMY ON ACTIVEX.

22 Q. ISN'T ACTIVEX, IN FACT, NOT PROPRIETARY AND, INSTEAD,

23 MANAGED BY THE OPEN GROUP?

24 A. NO, SIR. IT WAS SUBMITTED TO THE OPEN GROUP. IT WAS

25 NEVER APPROVED AS AN OPEN STANDARD IN ANY INTERNET

44

1 PROTOCOL THAT I'M AWARE OF.

2 Q. DURING THE JUNE 21, 1995, MEETING, DID MARC

3 ANDREESSEN TALK ABOUT DICKING AROUND WITH LOW-LEVEL STUFF

4 AS SOMETHING HE DIDN'T WANT TO HAVE TO DO IN DEVELOPING

5 NETSCAPE'S BROWSING SOFTWARE?

6 A. I DON'T KNOW. HE MAY HAVE. I DON'T REMEMBER THAT,

7 BUT HE MAY HAVE.

8 Q. WHAT IS LOW-LEVEL STUFF, IF YOU KNOW?

9 A. I PRESUME FUNCTIONS THAT WE WOULD LIKE TO SEE IN THE

10 OPERATING SYSTEM THAT WE WOULD NOT HAVE TO REPLICATE IN

11 THE CLIENT OR BROWSER.

12 Q. AND IF MR. ANDREESSEN, IN FACT, DIDN'T WANT TO DO

13 THIS, WHY WOULDN'T HE WANT TO DO THAT?

14 A. WORK.

15 Q. AND AT THAT MEETING, HE LEARNED WHAT THE LOW-LEVEL

16 STUFF IN WINDOWS 95 WAS GOING TO BE; RIGHT?

17 A. I DON'T KNOW THAT WE LEARNED IN THE SENSE THAT YOU

18 ASK IT, ANYTHING THAT WE--OF WHAT WAS GOING TO BE IN IT.

19 NOW, I CERTAINLY THINK WE LEARNED MORE ABOUT WHAT SOME OF

20 THOSE FUNCTIONS WERE. I DON'T THINK THAT THEY WERE--I DO

21 REMEMBER THE OPENDOC THING, WE DIDN'T KNOW A LOT ABOUT

22 THAT, AND THAT WAS TO A SURPRISE TO SOME OF THEM. WE

23 LEARNED ABOUT THAT. BUT BLACKBIRD AND THINGS OF THAT

24 NATURE, PEOPLE HAD BEEN READING ABOUT BLACKBIRD FOR TWO

25 YEARS PRIOR TO THAT. IT NEVER APPEARED. OR IF IT DID, IT

45

1 WAS CHANGED TO BECOME DIFFERENT PRODUCTS LIKE ACTIVEX.

2 Q. NOW, THE MORE THE THIS LOW-LEVEL STUFF WAS PUT INTO

3 THE OPERATING SYSTEM, THE SMALLER YOUR BROWSER WOULD HAVE

4 TO BE; ISN'T THAT CORRECT?

5 A. CERTAINLY, THOSE FUNCTIONS THAT WERE COMPLEMENTARY

6 THAT COULD BE DONE IN OPERATING SYSTEM THAT WOULD HELP THE

7 PRODUCT RUN BUT WERE NOT CONSIDERED TO BE PART OF THE

8 BROWSER WOULD HELP IT OR VICE VERSA, YES.

9 Q. GOING BACK TO PAGE 61 OF YOUR DIRECT, YOU MAKE

10 REFERENCE TO MICROSOFT'S MAKING NETSCAPE A PREFERRED ISV.

11 WHAT IS A PREFERRED ISV?

12 A. I THINK, IN GENERAL, IT IS A TERM THAT MICROSOFT USES

13 TO INCLUDE A CERTAIN CLASS OF INTERNET--OF INDEPENDENT

14 SOFTWARE VENDORS. I THINK IT'S A SET OF THEIR DEVELOPER

15 GROUP. AND IN THIS CASE, THEY USED THE TERM--I DON'T KNOW

16 WHETHER IT WAS SPECIFICALLY THAT PART OR JUST A GENERIC

17 EXPRESSION OF BEING PREFERRED, PREFERRED IN FRONT OF

18 OTHERS WHO WERE NOT PREFERRED.

19 Q. AND THEY HAD MENTIONED THE SAME POINT TO YOU DIRECTLY

20 AT YOUR JUNE 2 MEETING; IS THAT CORRECT?

21 A. I THINK WE HAD TALKED ABOUT A SPECIAL RELATIONSHIP,

22 IF WE EMBEDDED THEIR VIEWERS, THAT THAT WOULD GIVE US SOME

23 PREFERENTIAL TREATMENT. I BELIEVE WE DID, YES, SIR.

24 Q. AND AT THIS JUNE 21 MEETING, DID YOU REFER TO YOUR

25 GOD-GIVEN RIGHT TO A 95 PERCENT MARKET SHARE OF BROWSERS?

46

1 A. WELL, AS I SAID IN MY DIRECT TESTIMONY, THAT'S A JOKE

2 I HAVE USED SO MANY TIMES IN THE LAST 20 YEARS THAT IT MAY

3 HAVE BEEN SOMETHING I WOULD HAVE SAID.

4 I WOULD HOPE THAT MY SHAREHOLDERS WOULD WANT ME

5 TO GET 95 PERCENT OF A MARKET AND MONOPOLY.

6 Q. WAS THERE A LOT OF JOKING AT THE MEETING?

7 A. I WOULDN'T CALL A STATEMENT LIKE THAT AS A JOKE. I

8 WOULD SAY THAT IT WAS MEANT TO BE HUMOROUS. I DON'T

9 REMEMBER, THOUGH, A LOT OF THE, YOU KNOW, HIGH-FIVING AND

10 YUCKING IT UP, BUT IT WASN'T ALWAYS, YOU KNOW, INTENSE

11 THIS WAY, BUT IT GOT INTENSE, AND IT WOULD--JUST LIKE YOU

12 AND ME RIGHT NOW; TOING AND FROING, AS IT WERE.

13 Q. WITHIN THE CONFINES OF APPROPRIATE BEHAVIOR IN A

14 BUSINESS MEETING, WAS THERE HUMOR?

15 A. YES, I'M SURE THERE WAS FROM TIME TO TIME.

16 Q. THERE MIGHT EVEN BE A DIFFERENCE OF VIEW OF WHAT'S

17 APPROPRIATE BEHAVIOR IN A BUSINESS MEETING?

18 A. THAT'S CORRECT.

19 THE COURT: WOULD THIS BE AN APPROPRIATE TIME FOR

20 A RECESS?

21 MR. WARDEN: IT WOULD BE FINE.

22 (BRIEF RECESS.)

23 BY MR. WARDEN:

24 Q. MR. BARKSDALE, I REFER YOU TO PAGE 62, PARAGRAPH 112,

25 OF YOUR DIRECT TESTIMONY WHERE YOU SUGGEST THAT MICROSOFT

47

1 HAD BLATANTLY IMPLIED THAT WE SHOULD EITHER STOP COMPETING

2 WITH MICROSOFT OR MICROSOFT WOULD KILL YOU. DO YOU SEE

3 THAT?

4 A. YES, SIR, I DO.

5 Q. IS THERE ANY REFERENCE TO SUCH A THREAT IN

6 MR. ANDREESSEN'S NOTES OF THIS MEETING?

7 A. I BELIEVE MR. ANDREESSEN'S NOTES REFER TO HIS

8 INTERPRETATION OF THESE THINGS. I HAD MY OWN

9 INTERPRETATION.

10 Q. YOU SAY YOU WOULD HAVE CORRECTED HIS NOTES, IF YOU

11 HAD ANY CONCERNS, DOWN AT THE BOTTOM OF THE PAGE; IS THAT

12 RIGHT?

13 A. CORRECT.

14 Q. DO YOU KNOW WHETHER THERE WAS ANY STATEMENT IN HIS

15 NOTES TO THE EFFECT OF WHAT'S IN YOUR FIRST SENTENCE OF

16 PARAGRAPH 112?

17 A. WELL, IT'S THROUGHOUT HIS NOTES THAT THEY HAD THE

18 WILL AND THE WAY TO DO IT; AND THEREFORE, THAT WAS THE

19 SUBSTANCE OF WHAT WAS BEING SAID.

20 Q. WHO, FROM MICROSOFT, SAID SOMETHING EITHER DIRECTLY

21 TO THIS EFFECT OR THAT IMPLIED IT?

22 A. WELL, AS I SAID IN MY TESTIMONY, THERE WERE MANY

23 STATEMENTS ABOUT THE ABILITY TO TAKE ALL OF THIS PRODUCT

24 THAT WE HAD WORKED HARD ON AND WERE BUILDING A MAJOR PART

25 OF OUR BUSINESS AROUND AND PUT IT INSIDE OF THEIR PRODUCT

48

1 THAT EFFECTIVELY KILLED YOU BECAUSE YOU DON'T HAVE YOUR

2 AIR SUPPLY. YOU DON'T HAVE YOUR REVENUE, AND THAT WAS THE

3 DISCUSSION THAT I SAY WAS THE JONES--THE LINE BEING DRAWN,

4 THE RELATIONSHIP BETWEEN THE INVESTMENT IN THE COMPANY,

5 THE ABILITY TO GET OR NOT TO GET CERTAIN THINGS IF WE SORT

6 OF BEHAVED, WHEN YOU LEAVE THIS ROOM, YOU WILL HAVE A

7 DIFFERENT GROUP.

8 SO THAT WAS--IN MY JUDGMENT AT THE MEETING AND MY

9 JUDGMENT AT THIS TIME WAS THE CLEAR STATEMENT THAT WAS

10 BEING MADE TO MY LITTLE COMPANY BY THIS GREAT BIG COMPANY.

11 Q. LONG BEFORE THE JUNE 21ST, 1995, MEETING, YOU AND

12 YOUR COLLEAGUES AT NETSCAPE KNEW THAT MICROSOFT WAS GOING

13 TO PUT A BROWSER INTO WINDOWS 95, DID YOU NOT?

14 A. NO, SIR.

15 Q. YOU DID NOT KNOW THAT? IT WAS--

16 A. WHAT I SAID WAS WE KNEW THEY WERE GOING TO PROVIDE A

17 BROWSER. IT WAS NOT CLEAR THAT IT WAS INSIDE--THIS IS THE

18 POINT YOU WERE MAKING EARLIER, ABOUT WHETHER INTEGRATED OR

19 SEPARATED IS A MEANINGFUL TERM OR MATTER OF OPINION, AND

20 WE FELT LIKE THEY HAD EVERY INTENTION BECAUSE THEY

21 LICENSED SPYGLASS. IT WAS OBVIOUS THEY WERE GOING TO DO

22 SOMETHING ABOUT IT, BUT IT WAS NOT CLEAR TO US IT WAS

23 GOING TO BE INTEGRATED INTO WINDOWS 95.

24 AND IT WAS NOT CLEAR TO US IT WAS GOING TO FREE

25 TO ALL THESE OPERATING SYSTEMS THAT MICROSOFT DIDN'T EVEN

49

1 MAKE.

2 Q. BUT BILL GATES HAD TOLD THAT TO A GROUP, INCLUDING

3 JIM CLARK, IN OCTOBER 1994, HADN'T HE?

4 A. WELL, YOU MADE THAT STATEMENT YESTERDAY. I DON'T

5 KNOW WHAT BILL GATES TOLD JIM CLARK. JIM CLARK HAS NEVER

6 RELAYED TO ME THAT BILL GATES TOLD HIM ANYTHING.

7 Q. WELL, WHEN HE GAVE THE TESTIMONY UNDER OATH TO THAT

8 EFFECT IN HIS DEPOSITION IN THIS CASE--I'M REFERRING TO

9 MR. CLARK--HE WAS NOT ACTING AS A SALESMAN, WAS HE?

10 A. THAT'S--YESTERDAY, YOU TOLD ME ABOUT THAT TESTIMONY.

11 I NEVER SEEN THAT TESTIMONY. ARE YOU ASKING ME IF

12 MR. CLARK TOLD ME? MR. CLARK DID NOT TELL ME THAT.

13 Q. I DIDN'T ASK YOU WHETHER MR. CLARK TOLD YOU THAT OR

14 NOT.

15 DO YOU HAVE ANY REASON FOR DISBELIEVING

16 MR. CLARK'S SWORN TESTIMONY TO THAT EFFECT?

17 A. THAT'S NOT WHAT YOU ASKED ME. YOU ASKED ME DID

18 MR. CLARK TELL ME THERE AND, THEREFORE, DID I KNOW IT? I

19 DIDN'T KNOW IT BECAUSE I DIDN'T KNOW HIS TESTIMONY--

20 MR. WARDEN: YOUR HONOR, PLEASE ASK THE WITNESS

21 TO ANSWER THE QUESTION THAT WAS ASKED.

22 BY MR. WARDEN:

23 Q. I DIDN'T ASK WHAT MR. CLARK TOLD YOU. MY PRESENT

24 QUESTION IS: DO YOU HAVE ANY REASON FOR DISBELIEVING

25 MR. CLARK'S SWORN TESTIMONY THAT BILL GATES SAID TO A

50

1 GROUP, INCLUDING MR. CLARK, IN OCTOBER OR LATE SEPTEMBER

2 OF 1994, THAT MICROSOFT WAS GOING TO INCLUDE BROWSING IN

3 THE OPERATING SYSTEM WITHOUT CHARGE?

4 A. I HAVE NO REASON TO DISBELIEVE MR. CLARK OR ANY OTHER

5 DEPOSITION THAT YOU HAVE.

6 Q. GOING BACK TO THE JUNE 21 MEETING, WAS THERE ANY

7 DISCUSSION AT THE MEETING OF NETSCAPE'S USING ANY

8 FACILITIES PROVIDED BY THE WIN 32 API SET?

9 A. I BELIEVE THERE WERE.

10 Q. IS THERE ANYTHING WRONG, IN YOUR JUDGMENT, WITH

11 MICROSOFT WANTING A COLLABORATOR OR PARTNER WHO WOULD TAKE

12 MICROSOFT'S CORE SERVICES AND BUILD ON TOP OF THEM TO

13 CREATE SOLUTIONS FOR CUSTOMERS?

14 A. SERVICES AS OPPOSED TO APPLICATIONS?

15 Q. TAKE CORE SERVICES AND BUILD ON TOP OF THEM TO CREATE

16 SOLUTIONS FOR CUSTOMERS, IS THE QUESTION.

17 A. WITH THE CAVEAT THAT I DON'T BELIEVE THAT BROWSER IS

18 A CORE SERVICE, I WOULD AGREE WITH THAT STATEMENT.

19 Q. AND, IN FACT, ISN'T THAT WHAT JIM CLARK HAD SAID IN

20 HIS DECEMBER 1994 E-MAIL NETSCAPE'S BUSINESS WAS?

21 A. AGAIN, THAT WAS THE FIRST TIME I HAD SEEN THE E-MAIL.

22 HE MAY HAVE SAID THAT BEFORE. I SAW THE E-MAIL YESTERDAY

23 FOR THE FIRST TIME.

24 Q. AND ISN'T THAT WHAT MR. ROSEN REPORTED IN ONE OF THE

25 EXHIBITS IN FRONT OF YOU THAT JOHN DOEHR HAD SAID

51

1 NETSCAPE'S BUSINESS WAS?

2 A. I AGREE WITH THAT. I SAID THAT.

3 Q. AND AM I CORRECT THAT IT WAS THE PUNISHMENT TO

4 NETSCAPE IF DIDN'T BECOME MICROSOFT'S

5 PARTNER/COLLABORATOR, THAT IT WOULD BECOME A NORMAL ISV?

6 A. THAT WAS ONE OF THE STATEMENTS MADE, I BELIEVE, YES,

7 SIR.

8 Q. WHAT DID A NORMAL ISV DO?

9 A. WHAT CAN THEY DO?

10 Q. YES, VIS-A-VIS MICROSOFT.

11 A. IT WOULD BE IN A RELATIONSHIP WITH MICROSOFT AS A

12 PLATFORM PROVIDER, PROVIDING CORE SERVICES THAT AN ISV

13 COULD BUILD ON TOP OF APPLICATIONS.

14 Q. AND IS NETSCAPE AN ISV FOR BOTH WINDOWS 95 AND

15 WINDOWS 98?

16 A. YES, SIR, WE ARE.

17 Q. DOES NETSCAPE SUBSCRIBE TO MICROSOFT DEVELOPER

18 NETWORK?

19 A. I BELIEVE WE DO.

20 Q. DOES NETSCAPE HAVE ACCESS TO MICROSOFT DEVELOPER

21 RELATIONS GROUP?

22 A. I BELIEVE WE DO.

23 Q. DID NETSCAPE RECEIVE BETA COPIES OF WINDOWS 98?

24 A. I WOULD ASSUME WE DID.

25 Q. AND, IN FACT, ISN'T NETSCAPE'S WEB-BROWSING SOFTWARE

52

1 PERFECTLY INTEROPERABLE WITH WINDOWS 98, EVEN THOUGH

2 WINDOWS 98 CONTAINS FULLY INTEGRATED WEB-BROWSING

3 FUNCTIONALITY?

4 A. I WOULD ASSUME THAT'S A TRUE STATEMENT.

5 Q. AT THE JUNE 21 MEETING, WAS THERE DISCUSSION ABOUT

6 NETSCAPE BUILDING SERVER PRODUCTS THAT RAN ON TOP OF

7 SERVERS USING WINDOWS NT?

8 A. WE DID, AND WE ARE.

9 Q. WAS THERE DISCUSSION AT THAT MEETING OF MICROSOFT

10 PROMOTING NETSCAPE'S COMMERCIAL OR COMMUNICATION SERVER?

11 A. YES, I BELIEVE WE DID.

12 Q. HAD YOU DEVELOPED VERSIONS OF THOSE PRODUCTS FOR

13 WINDOWS NT AT THAT TIME?

14 A. ON THE SERVER SIDE, YES, I BELIEVE WE WERE SHIPPING

15 AN NT PRODUCT.

16 Q. DID YOU BELIEVE IN JUNE 1995 THAT WINDOWS NT WOULD

17 BECOME AN INCREASINGLY IMPORTANT SERVER OPERATION?

18 A. SURE.

19 Q. WOULD IT HAVE BEEN COMMERCIALLY VALUABLE TO NETSCAPE

20 FOR MICROSOFT TO PROMOTE NETSCAPE'S SERVER PRODUCTS IN

21 CONJUNCTION WITH MICROSOFT'S SERVER SOFTWARE?

22 A. IT WOULD HAVE BEEN A COMMERCIALLY--AS LONG AS THEY

23 LET US DO IT WITH THEM, YEAH.

24 Q. GOING TO PARAGRAPH 114 ON PAGE 65 OF YOUR DIRECT

25 TESTIMONY--

53

1 A. PARAGRAPH 114?

2 Q. YES, MR. BARKSDALE.

3 A. YES, I GOT IT.

4 Q. --DID YOU RECEIVE ANYTHING FROM MICROSOFT RELATED TO

5 THE API'S THAT YOU REFERRED TO IN PARAGRAPH 114 PRIOR TO

6 OCTOBER OF 1995?

7 A. DID WE RECEIVE ANYTHING?

8 Q. YES.

9 A. WE MAY HAVE.

10 Q. ISN'T IT TRUE, MR. BARKSDALE, THAT MICROSOFT PROMISED

11 THE SPECIFICATION OF THE DIALER RNS/API TO YOU ON A

12 PARTICULAR DATE IN JULY AND DELIVERED THAT SPECIFICATION

13 WITHIN ONE DAY OF THE PROMISED DATE?

14 A. THAT'S NOT MY UNDERSTANDING. THEY DELIVERED A

15 VERSION THAT DIDN'T WORK. THE WORKING VERSION OF THE

16 PRODUCT WAS, WITHOUT QUESTION, SEVERAL MONTHS LATE,

17 ACCORDING TO ENGINEERS ON THE PROJECT, AND CAUSED OUR

18 PRODUCT TO BE LATE. THAT'S JUST A FACT.

19 Q. ISN'T IT TRUE THAT MICROSOFT PROMISED THE ALPHA CODE

20 FOR THE RNA API THAT IS THE DIALER ON A PARTICULAR DATE IN

21 JULY AND DELIVERED THAT CODE WITHIN ONE DAY OF THE

22 PROMISED DATE?

23 A. LIKE I SAY, I DON'T THINK IT WORKED.

24 Q. IT WAS THE ALPHA VERSION; RIGHT? DID YOU GET IT AT

25 THE TIME IT WAS PROMISED?

54

1 A. WE WERE NOT ASKING FOR THAT. WE WANTED SOMETHING

2 THAT WORKED THAT WE COULD SHIP OUR PRODUCT WITH. THEY

3 GAVE US SOMETHING THAT THEY SAID WAS ALPHA VERSION.

4 AGAIN, YOU WOULD HAVE TO GET THE TECHNICIANS INVOLVED, BUT

5 I BELIEVE THEY STAND TO AMEND TO SAY WHAT THEY GOT DIDN'T

6 WORK AND DIDN'T ALLOW US TO BUILD THE PRODUCT.

7 Q. DO YOU HAVE ANY REASON FOR BELIEVING THAT WASN'T THE

8 MOST CURRENT VERSION OF THAT API AT THE TIME IT WAS

9 DELIVERED TO YOU?

10 A. DO I HAVE ANY REASON TO BELIEVE IT WASN'T THE MOST

11 CURRENT VERSION?

12 Q. YES, THAT'S THE QUESTION.

13 A. I DO NOT. IT DIDN'T WORK.

14 Q. ISN'T IT ALSO TRUE THAT NETSCAPE RECEIVED FURTHER

15 DEVELOPED VERSIONS OF THE DIALER, THE RNA API CODE, IN

16 AUGUST OF 1995?

17 A. THAT'S WHAT I'M SAYING. THEY GOT IT WORKING BETTER,

18 OR AT LEAST WHAT WE GOT DELIVERED WAS WORKING BETTER, AND

19 THAT PROGRESSED DURING THE COURSE. BUT BY THEN, THEY HAD,

20 OF COURSE, RELEASED WINDOWS 95, IN AUGUST.

21 Q. YES.

22 DO YOU HAVE ANY REASON TO BELIEVE YOU DIDN'T GET

23 THE VERSIONS OF THE RNA API CODE, WHICH YOU CALLED

24 "DIALER," ON A TIMELY BASIS IN ACCORDANCE WITH THEIR

25 DEVELOPMENT?

55

1 A. MY ENGINEERS TOLD ME, THEN AND NOW, THAT THEY FELT

2 LIKE MICROSOFT WAS DRAGGING THEIR FEET ON DELIVERING THE

3 PRODUCT IN ORDER TO GET IT WORKING IN OUR PRODUCT. SO I

4 HAVE NO REASON TO BELIEVE THAT THE ENGINEERS THAT WORKED

5 FOR ME WERE LYING TO ME ABOUT IT.

6 Q. WOULD YOU TAKE THE POSITION THAT THE RELEASE OF

7 WINDOWS 95 SHOULD HAVE BEEN HELD UP UNTIL THIS DIALER API

8 WAS FULLY DEVELOPED?

9 A. OF COURSE NOT.

10 Q. AND ISN'T IT TRUE, MR. BARKSDALE, THAT THROUGHOUT THE

11 SUMMER OF 1995, NETSCAPE HAD DIRECT ACCESS TO THE

12 MICROSOFT ENGINEERS WHO WERE BUILDING THE DIALER API?

13 A. I DON'T KNOW THAT.

14 Q. THE VERY ENGINEERS WHO BUILT WINDOWS 95?

15 A. I DON'T KNOW THAT.

16 Q. DO YOU RECALL AT THE OUTSET OF YOUR TESTIMONY WHEN I

17 ASKED YOU ABOUT THE DETAILED CHRONOLOGY THAT GARY REBACK

18 PROVIDED TO THE DEPARTMENT OF JUSTICE ABOUT A MONTH AFTER

19 THE JUNE 21 MEETING--IT'S BEEN MARKED AS DEFENDANT'S

20 EXHIBIT 1 AND RECEIVED.

21 A. I APOLOGIZE, SIR. DO I REMEMBER THAT YOU SHOWED ME

22 THAT DOCUMENT?

23 Q. YES.

24 A. I DO REMEMBER THAT, YES.

25 Q. AND THE PURPOSE OF THAT DOCUMENT WAS TO GIVE THE

56

1 GOVERNMENT ACCURATE INFORMATION; IS THAT NOT SO?

2 A. I PRESUME SO. I DIDN'T PARTICIPATE IN THE CREATION

3 OF THE DOCUMENT. I DON'T KNOW WHAT ITS PURPOSE WAS.

4 Q. WELL, AS A CORPORATE POLICY, YOU WOULDN'T DECEIVE THE

5 FEDERAL GOVERNMENT, WOULD YOU?

6 A. I DON'T BELIEVE I EVER SAW THAT MEMO.

7 Q. I'M ASKING ABOUT NETSCAPE. WOULD NETSCAPE DECEIVE

8 THE FEDERAL GOVERNMENT?

9 A. I HOPE NOT.

10 Q. WAS THERE ANY REASON FOR NETSCAPE TO OMIT ANY OF THE

11 BAD ACTS OF MICROSOFT FROM THIS DETAILED CHRONOLOGY?

12 A. SIR, I DON'T KNOW WHERE MR. REBACK GOT THE

13 CHRONOLOGY. I DON'T KNOW IF HE GOT THAT FROM RECORDS,

14 FROM SOMEBODY WHO DIDN'T KNOW WHAT WAS HAPPENING, FROM

15 SOMEBODY WHO DID KNOW WHAT WAS HAPPENING. THE DOCUMENT IS

16 A DOCUMENT BY MR. REBACK.

17 Q. HE WAS YOUR COUNSEL; RIGHT?

18 A. HE WAS ONE OF OUR OUTSIDE COUNSEL, BUT I DON'T KNOW

19 THAT I EVER SAW THE DOCUMENT. IT MAY OR MAY NOT BE

20 ACCURATE. I CAN'T ATTEST TO ITS ACCURACY. THAT'S ALL I'M

21 SAYING TO YOU.

22 Q. AND THIS DOCUMENT WAS PROVIDED--THAT IS, DEFENDANT'S

23 EXHIBIT 1--TO THE DEPARTMENT OF JUSTICE ON BEHALF OF

24 NETSCAPE, NOT MR. REBACK'S OTHER CLIENTS; CORRECT?

25 A. SIR, I THINK THE DOCUMENT SPEAKS FOR ITSELF. I DON'T

57

1 KNOW ABOUT THE DOCUMENT.

2 Q. THAT'S FINE.

3 A. I CAN'T ARGUE THAT.

4 Q. LET'S TAKE A LOOK AT THE DOCUMENT. DO YOU HAVE IT

5 THERE IN FRONT OF YOU, DEFENDANT'S EXHIBIT 1?

6 A. I THINK IT'S WAY DOWN ON THE BOTTOM OF THIS STACK.

7 Q. WELL, LET'S FISH IT OUT.

8 A. YES, SIR, I HAVE IT.

9 Q. DID YOU SAY YOU DIDN'T KNOW WHERE MR. REBACK HAD

10 GOTTEN HIS INFORMATION? IS THAT RIGHT?

11 A. I DON'T KNOW WHERE HE GOT IT, SIR. I SEE SOME OF

12 THESE REFERENCE E-MAILS AND THINGS OF THAT NATURE.

13 Q. WELL, IT'S PRETTY DETAILED AND GOES THROUGH LOTS AND

14 LOTS OF STUFF AND HAS NAME INDEX AND SO FORTH; RIGHT? AND

15 THEN THE NETSCAPE NAME INDEX STARTS WITH YOU AND GOES ON

16 WITH LOTS OF THINGS ON LOTS OF DATES; AM I CORRECT?

17 A. YES, SIR.

18 Q. MARC ANDREESSEN TESTIFIED AT HIS DEPOSITION PAGE 62,

19 LINE FIVE...

20 (PAUSE.)

21 MR. WARDEN: I WITHDRAW THAT STATEMENT, THAT

22 QUESTION.

23 BY MR. WARDEN:

24 Q. DO YOU BELIEVE MIKE HOMER PREPARED THIS CHRONOLOGY

25 FOR MR. REBACK?

58

1 A. I DON'T KNOW.

2 Q. MIKE HOMER WAS PRESENT AT THE JUNE 21 MEETING?

3 A. YES, SIR.

4 Q. ALL RIGHT. TAKING A LOOK AT THIS DOCUMENT, IT BEGINS

5 WITH OCTOBER '94 MICROSOFT AND NETSCAPE. THAT IS THE

6 CHRONOLOGY PART OF IT; IS THAT CORRECT?

7 A. YES.

8 Q. AND IT SAYS, "MICROSOFT APPROACHES NETSCAPE WITH

9 INQUIRY ABOUT BUYING SOURCE CODE, WHICH NETSCAPE

10 DECLINES." DO YOU SEE THAT?

11 A. YES.

12 Q. IT DOESN'T SAY ANYTHING ABOUT MR. GATES'S STATEMENT

13 TO THE GROUP, INCLUDING MR. CLARK, IN OCTOBER OF '94,

14 SEPTEMBER, THAT MICROSOFT INTENDED TO INCLUDE BROWSING

15 SOFTWARE IN WINDOWS 95 AND NOT CHARGE SEPARATELY FOR IT,

16 DOES IT?

17 A. HOW IS THAT RELATED TO NETSCAPE DECLINING?

18 Q. I'M NOT SUGGESTING IT IS. BUT THERE IS AN ENTRY FOR

19 OCTOBER '94, AND THE FACT I JUST RECITED IS NOT INCLUDED

20 IN THAT ENTRY, IS IT?

21 A. NO, SIR, IT ISN'T.

22 Q. AND THERE, AS YOU GO ON INTO DECEMBER 1994, THERE IS

23 NO REFERENCE TO MR. CLARK'S E-MAIL OF DECEMBER 29, 1994,

24 INVITING MICROSOFT NOT ONLY TO USE YOUR CODE, IN FACT,

25 TRYING TO SELL THEM YOUR CODE, BUT ALSO TAKING AN EQUITY

59

1 INTEREST IN NETSCAPE, IS THERE?

2 A. THE LAST SENTENCE OF MR. CLARK'S MEMO SAYS HE'S NOT

3 TOLD ANYBODY IN THE COMPANY ABOUT IT. OBVIOUSLY, HE

4 WOULDN'T TELL OUTSIDE COUNSEL ABOUT IT.

5 Q. IS MR. CLARK A HIGHLY SECRETIVE MAN?

6 A. HE COULD BE VERY SECRETIVE, YES, SIR, HE CAN.

7 Q. AND HE WAS THE CEO IN DECEMBER OF 1994?

8 A. THAT WOULD HAVE BEEN ABOUT HIS LAST WEEK, YES, SIR.

9 HE WAS.

10 BUT IT WOULDN'T SURPRISE ME.

11 Q. THERE WAS NO QUESTION.

12 THE COURT: YOU CAN'T VOLUNTEER INFORMATION,

13 MR. BARKSDALE. IF YOU HAVE AN ANSWER TO THE QUESTION, YOU

14 COULD ANSWER IT. YOU COULD GIVE AN EXPLANATION. BUT ANY

15 INFORMATION THAT YOU THINK OUGHT TO BE IN THE RECORD AND

16 ISN'T, AFTER YOU HAVE FULLY ANSWERED MR. WARDEN'S

17 QUESTION, YOU WILL HAVE TO WAIT FOR YOUR COUNSEL TO ELICIT

18 THAT ON REDIRECT.

19 THE WITNESS: I UNDERSTAND, YES, SIR.

20 MR. WARDEN: THANK YOU, YOUR HONOR.

21 BY MR. WARDEN:

22 Q. THE DECEMBER 1994 ENTRY IN THIS DETAILED CHRONOLOGY

23 DOES NOT SAY THAT THE MEETING AT NETSCAPE, ITEM NUMBER

24 THREE, MICROSOFT VISITS NETSCAPE, WAS AT NETSCAPE'S

25 INVITATION, DOES IT?

60

1 A. I APOLOGIZE. WHICH MEETING?

2 Q. NUMBER FOUR, MICROSOFT VISITS NETSCAPE, DECEMBER

3 1994, ITEM THREE, MICROSOFT VISITS NETSCAPE. DO YOU SEE

4 THAT?

5 A. RIGHT.

6 Q. IT DOESN'T SAY THAT THAT MEETING OR VISIT WAS AT

7 NETSCAPE'S REQUEST--THAT IS, SPECIFICALLY MR. CLARK'S

8 REQUEST--DOES IT?

9 A. IT DOESN'T SAY THAT.

10 Q. GOING ON INTO 1995, I TAKE IT THAT THERE IS A TYPO IN

11 ITEM NUMBER FIVE, MICROSOFT VISITS NETSCAPE MAY '94. THAT

12 SHOULD BE MAY '95; AM I CORRECT?

13 A. I BELIEVE THAT WOULD BE RIGHT, YES, SIR.

14 Q. WELL, BEFORE THAT, IT DOESN'T SAY THAT MICROSOFT

15 PROVIDED MARC ANDREESSEN WITH SDKS FOR WINDOWS 95 IN APRIL

16 OF 1995, DOES IT?

17 A. SDKS WERE GENERALLY AVAILABLE TO EVERYBODY, BUT IT

18 DOESN'T SAY THAT, RIGHT.

19 Q. AND IT DOESN'T MENTION THE COMMUNICATIONS WITH JON

20 MITTELHAUSER, DOES IT?

21 A. DOES NOT MENTION THAT.

22 Q. AND IT DOESN'T MENTION YOUR SERIES OF CONVERSATIONS

23 WITH DAN ROSEN, DOES IT?

24 A. IF DOESN'T MENTION THAT.

25 Q. AND IT DOESN'T MENTION, AS YOU TESTIFIED, THAT YOU

61

1 THOUGHT ON JUNE 2ND THAT THERE WAS A POSSIBILITY THAT THE

2 TWO COMPANIES WOULD HAVE A COOPERATIVE RELATIONSHIP, DOES

3 IT?

4 A. NO, SIR.

5 Q. IN FACT, IT DOESN'T MENTION THE JUNE 2 MEETING AT

6 ALL, DOES IT?

7 A. IT DOESN'T APPEAR TO, NO, SIR.

8 Q. WHY WOULD YOU OMIT THAT MEETING? IT'S A MEETING

9 BETWEEN YOU AS NETSCAPE'S CEO WITH TWO OF THE SENIOR

10 MICROSOFT EXECUTIVES PAUL MARITZ AND NATHAN MYHRVOLD AS

11 WELL AS YOUR OLD COLLEAGUE, DAN ROSEN?

12 MR. BOIES: OBJECTION.

13 THE COURT: SUSTAINED. HE DIDN'T WRITE THIS.

14 MR. WARDEN: I KNOW THAT.

15 THE COURT: YOUR QUESTION IS, "WHY DID YOU OMIT

16 THIS."

17 MR. WARDEN: I BEG YOUR PARDON.

18 THE COURT: LET ME MAKE A POINT, MR. WARDEN. YOU

19 DON'T NEED TO TAKE THIS MAN THROUGH THIS DOCUMENT AND TELL

20 US WHAT'S NOT IN THERE. THE DOCUMENT SPEAKS FOR ITSELF.

21 YOU ARE WASTING YOUR CROSS-EXAMINATION TIME ON DOING THIS.

22 MR. WARDEN: THIS IS GOING TO BE A VERY BRIEF

23 EXAMINATION, AND I THINK YOUR HONOR WILL FIND IT

24 PERTINENT.

25 THE COURT: ALL RIGHT.

62

1 MR. WARDEN: AND I APOLOGIZE FOR SAYING "YOU."

2 BY MR. WARDEN:

3 Q. THE DRAFTSMAN OF THE DOCUMENT DOES NOT MENTION THE

4 MEETING THAT YOU HAD ON JUNE 2 WAS MARITZ, MYHRVOLD, AND

5 ROSEN, DOES IT?

6 A. NO, SIR.

7 Q. AND DOESN'T SAY YOU FOUND THEM VERY FRIENDLY AND

8 NONTHREATENING ON THAT DAY, DOES IT?

9 A. NO, SIR.

10 Q. IT DOESN'T SAY THAT ON JUNE 2ND, MICROSOFT OFFERED TO

11 PROVIDE YOU WITH EARLY DISCLOSURE OF ANY STANDARDS OR

12 PROTOCOLS THAT WOULD ALLOW YOU TO IMPROVE YOUR BROWSER,

13 DOES IT?

14 A. NO, IT DOESN'T.

15 Q. AND IT DOESN'T SAY THAT THE POSSIBILITY OF AN

16 INVESTMENT BY MICROSOFT AND NETSCAPE WAS FIRST DISCUSSED

17 JUNE 2ND WITH YOU DIRECTLY, DOES IT?

18 A. NO, SIR.

19 Q. NOW, I DIRECT YOUR ATTENTION TO THE ENTRY FOR THE

20 JUNE 21ST, 1995, MEETING IN MOUNTAIN VIEW ON PAGE THREE,

21 ITEM NUMBER 17.

22 A. GOT IT.

23 Q. WOULD YOU READ THAT ENTRY IN ITS ENTIRETY TO

24 YOURSELF, PLEASE.

25 (WITNESS REVIEWS DOCUMENT.)

63

1 A. YES, SIR.

2 Q. HAVE YOU DONE SO?

3 A. I HAVE.

4 Q. NOW, THIS DETAILED CHRONOLOGY SUBMITTED TO THE

5 JUSTICE DEPARTMENT DOESN'T SAY ANYTHING ABOUT A STUNNING

6 PROPOSAL TO DIVIDE MARKETS HAVING BEEN MADE AT THIS

7 MEETING, DOES IT?

8 A. NO, SIR.

9 Q. HAD YOU COMMUNICATED THE MAKING OF THAT PROPOSAL, AS

10 YOU ALLEGE, AND YOUR STUNNED REACTION TO COUNSEL?

11 A. TO MR. REBACK?

12 Q. TO COUNSEL, TO ANY COUNSEL.

13 A. I DON'T KNOW THAT I HAD, NO, SIR.

14 Q. WOULDN'T YOU WANT YOUR COUNSEL TO KNOW THAT WHAT YOU

15 CHARACTERIZE AS A STUNNING NAKED MARKET DIVISION PROPOSAL

16 HAD BEEN MADE TO YOU?

17 A. NOT NECESSARILY, NO.

18 Q. DIDN'T YOU WANT THE DEPARTMENT OF JUSTICE TO BRING

19 THIS VERY LAWSUIT TO MOVE YOUR BIGGEST POTENTIAL

20 COMPETITOR IN WHAT YOU CALLED THE BROWSING MARKET OUT OF

21 YOUR WAY?

22 A. NOT AT THIS TIME, NO, SIR.

23 Q. WHEN DID YOU DECIDE YOU WANTED THAT?

24 A. I THINK WHEN COMPAQ CANCELED OUR AGREEMENT AND TOOK

25 US OUT OF THE OEM BUSINESS, I SAID I HAD ENOUGH, AND IT'S

64

1 TIME TO STOP ALL OF THIS, AND THIS WAS A FEW MONTHS LATER.

2 Q. BUT AT THIS TIME, YOU WANTED YOUR GOD-GIVEN RIGHT TO

3 95 PERCENT MARKET SHARE, DIDN'T YOU?

4 A. SIR, I TOLD YOU I JOKED AROUND WITH FEDERAL EXPRESS

5 IN 1979, AND IT WAS A JOKE, AND THERE WAS NOTHING WRONG

6 WITH HAVING A MONOPOLY. IT WAS AGAINST THE LAW TO TIE

7 ANOTHER PRODUCT TO YOUR MONOPOLY PRODUCT.

8 Q. MR. BARKSDALE, I WOULD LIKE YOU TO HAVE BEFORE YOU

9 NOT JUST DEFENDANT'S EXHIBIT 1, BUT DEFENDANT'S

10 EXHIBIT 49.

11 A. YES, SIR, I HAVE IT.

12 Q. THIS IS THE E-MAIL FROM MICROSOFT TO MIKE HOMER

13 PRESENTING A DISCUSSION LIST FOR THE JUNE 21, 1995,

14 MEETING; IS THAT CORRECT?

15 A. YES, SIR.

16 Q. AND ITEM NUMBER FIVE THERE, WHICH WE SAW A WHILE AGO,

17 SAID MICROSOFT AGREES TO GIVE NETSCAPE INSIGHT INTO THOSE

18 FEATURES OF THE WINDOWS 95 OPERATING SYSTEM THAT WILL BE

19 AVAILABLE FOR NETSCAPE'S USE IN CREATING NEW VERSIONS OF

20 ITS BROWSER. DO YOU SEE THAT?

21 A. YES, SIR.

22 Q. I SUGGEST TO YOU, MR. BARKSDALE, THAT IF YOU LOOK AT

23 THE WHOLE RECORD OF EVENTS UP TO THE JUNE 21, 1995,

24 MEETING, INCLUDING PARTICULARLY DEFENDANT'S EXHIBIT 49,

25 BUT MANY OTHER EVENTS, AND THEN YOU LOOK AT DEFENDANT'S

65

1 EXHIBIT 1 PREPARED LITTLE OVER A MONTH LATER, THAT THE

2 ONLY FAIR CONCLUSION THAT CAN BE REACHED IS THAT MARC

3 ANDREESSEN INVENTED OR IMAGINED A PROPOSAL TO DIVIDE

4 MARKETS AND THAT YOU AND YOUR COMPANY HAD SIGNED ONTO THAT

5 INVENTION OR IMAGINARY CONCOCTION IN ORDER TO ASSIST IN

6 THE PROSECUTION OF THIS LAWSUIT.

7 A. IS THAT A QUESTION?

8 Q. IT IS.

9 A. WELL, I ABSOLUTELY DISAGREE WITH YOU. THAT'S ABSURD.

10 Q. IS THERE ANYTHING ELSE IN THE WRITTEN RECORD OF YOUR

11 DEALINGS WITH MICROSOFT, BESIDES MR. ANDREESSEN'S NOTES,

12 THAT CORROBORATE, IN ANY WAY, THE ALLEGATION THAT ANYONE

13 MADE ANY KIND OF A MARKET DIVISION PROPOSAL ON JUNE 21,

14 1995?

15 A. AS I HAVE SAID, I WAS IN THE MEETING. I KNOW WHAT I

16 KNOW. I WAS A WITNESS TO IT, AND YOU WEREN'T.

17 Q. YEAH, BUT YOU TESTIFIED NO ONE USED THE WORDS "MARKET

18 DIVISION."

19 A. I TESTIFIED THAT THE SUBSTANCE OF ANY TIME YOU DRAW A

20 LINE IS DIVIDING THE MARKET.

21 Q. LINES BETWEEN APPLICATIONS AND OPERATING SYSTEMS?

22 A. LINES ALMOST ANYWHERE THAT WOULD SEPARATE ONE

23 COMPANY'S PRODUCTS FROM ANOTHER, PARTICULARLY IF THEY KNEW

24 THE COMPANY A WAS TRYING TO BUILD THAT PRODUCT AND IT WAS

25 GOING TO BE THEIR AIR SUPPLY.

66

1 Q. WELL, LET'S GO TO PARAGRAPH 118 ON PAGE 67.

2 BY THE WAY, THERE WAS NO MENTION ON JUNE 21 OF

3 ANY AIR SUPPLY, WAS THERE?

4 A. YOU ASKED ME MY RECOLLECTION AND WHAT I WAS THINKING,

5 AND I'M NOW COMBINING WITH FOUR YEARS EXPERIENCE IN THIS

6 MATTER, AND CERTAINLY AIR SUPPLY IS NOW VERY CLEAR WHAT IT

7 MEANS.

8 Q. WAS THERE ANY DISCUSSION OF AIR SUPPLY PUTTING PEOPLE

9 OUT OF BUSINESS ON JUNE 21?

10 A. THERE WAS A CLEAR THREAT THAT IF THEY WERE GOING TO

11 GIVE AWAY A PRODUCT WE WERE GETTING OUR MAJOR SOURCE OF

12 REVENUE FROM, THAT THAT WAS GOING TO HAVE A MAJOR EFFECT

13 ON OUR ABILITY TO SUSTAIN OUR PRODUCT AND OUR COMPANY.

14 Q. IS A STATEMENT OF FACT A THREAT?

15 A. A STATEMENT OF FACT LIKE I'M GOING TO KILL YOU, IS

16 THAT A THREAT? IT COULD BE, SURE.

17 Q. WAS SUCH A STATEMENT MADE ON JUNE 21?

18 A. A STATEMENT OF FACT AS I'M GOING TO GIVE AWAY THIS

19 PRODUCT AND INTEGRATE MY PRODUCT, IS THAT A THREAT?

20 THAT'S A THREAT, IF THEY KNOW IN THE MEETING THAT I'M VERY

21 DEPENDENT ON THAT PRODUCT.

22 Q. WERE THEY DOING ANYTHING OTHER THAN STATING WHAT WAS

23 KNOWN TO THE WHOLE WORLD WHEN THEY RECITED THAT FACT?

24 A. ABSOLUTELY. I TOLD YOU. THEY DID NOT HAVE ANY

25 STATEMENT TO THE EFFECT THEY WERE GOING TO BE GIVING AWAY

67

1 THIS PRODUCT ON EVERY PLATFORM KNOWN TO MAN THAT THEY WERE

2 GOING TO BE GIVING IT AWAY AND INTEGRATING IT INTO THEIR

3 PRODUCT. I NEVER HEARD THAT.

4 Q. IF THEY SAID THAT IN A PUBLIC FORUM A WEEK BEFORE

5 THEY HAD A MEETING WITH YOU AND THEN REPEATED IT IN THEIR

6 MEETING WITH YOU, WOULD IT HAVE BEEN A THREAT?

7 A. SIR, I DON'T KNOW WHAT YOU MEAN EXACTLY BY THAT. I

8 KNOW THAT IF MR. GATES STANDS UP IN A PLATFORM AFTER

9 MR. CLARK STANDS UP ON A PLATFORM AND SAYS, "THIS PUNK IS

10 GOING TO BE OUT OF BUSINESS BECAUSE I'M GOING TO GIVE AWAY

11 THE PRODUCT," THAT'S A THREAT THEN, THAT'S A THREAT LATER.

12 BUT, IF I DIDN'T KNOW ABOUT THAT THREAT, IT WOULD NOT BE A

13 THREAT UNTIL I HEARD IT, AND I'M TELLING YOU ABOUT THIS

14 MEETING THAT I WAS IN.

15 Q. ARE PEOPLE PROHIBITED BY THE ANTITRUST LAWS, IN YOUR

16 JUDGMENT, FROM STATING WHAT THEIR FUTURE BUSINESS PLANS

17 ARE?

18 A. NOT THAT I KNOW OF.

19 Q. ALL RIGHT. PAGE 67, PARAGRAPH 118.

20 MR. BOIES: YOUR HONOR, BEFORE HE GOES ON TO

21 ANOTHER SUBJECT, WE HAVE SOME DOCUMENTS TO BE ADMITTED

22 UNDER RULE 106 THAT I HAVE REVIEWED WITH COUNSEL FOR THE

23 DEFENDANTS, AND THEY HAVE NO OBJECTION.

24 MR. WARDEN: I THINK THEY OUGHT TO BE PUT IN ON

25 REDIRECT, BUT I DON'T HAVE ANY OBJECTION.

68

1 THE COURT: IS THAT FOR COMPLETENESS?

2 MR. BOIES: YES. THEY ARE GOVERNMENT'S EXHIBIT

3 35, 240, 241, 242, 243, 244, 246, AND 248. AND I HAVE A

4 COURTESY COPY FOR THE COURT.

5 THE COURT: ALL RIGHT.

6 MR. WARDEN: YOUR HONOR, I HAVE NO OBJECTION, BUT

7 I DON'T WANT THAT STATEMENT TO BE TAKEN AS MEANING I AGREE

8 THAT THEY'RE REQUIRED FOR COMPLETENESS UNDER 106.

9 THE COURT: I WILL NOT SO TAKE IT, MR. WARDEN.

10 MR. WARDEN: THANK YOU.

11 THE COURT: ALL RIGHT. GOVERNMENT'S 35, 240,

12 242, 243, 244, 246, AND 248 ARE ADMITTED. FOR THE RULE OF

13 COMPLETENESS.

14 (GOVERNMENT'S EXHIBITS NOS. 35,

15 240, 242, 243, 244, 246, AND 248

16 WERE ADMITTED INTO EVIDENCE.)

17 MR. BOIES: YOUR HONOR, I WOULD ALSO OFFER

18 GOVERNMENT'S EXHIBIT 33, WHICH IS MR. ANDREESSEN'S NOTES

19 THAT HAVE BEEN EXTENSIVELY DISCUSSED.

20 MR. WARDEN: I THOUGHT ALL THOSE DOCUMENTS WERE

21 RECEIVED--ALL OF YOUR EXHIBITS IN HIS DIRECT TESTIMONY,

22 WHICH I BELIEVE THEY ARE, I THINK THE COURT RECEIVED WHEN

23 THEY DENIED OUR MOTION IN LIMINE.

24 IS THAT CORRECT, YOUR HONOR? I BELIEVE YOUR

25 RULING WAS THE DIRECT TESTIMONY AND THE EXHIBITS

69

1 REFERENCED WERE--

2 THE COURT: YES.

3 MR. WARDEN: WERE RECEIVED OVER OUR OBJECTION?

4 THE COURT: THAT'S CORRECT. I WON'T RESIST

5 ANOTHER COURTESY COPY.

6 FOR THE RECORD, GOVERNMENT'S EXHIBIT 33 IS

7 ADMITTED, IF NOT PREVIOUSLY ADMITTED.

8 (GOVERNMENT'S EXHIBIT NO. 33 WAS

9 ADMITTED INTO EVIDENCE.)

10 THE WITNESS: I APOLOGIZE. WHERE AM I?

11 BY MR. WARDEN:

12 Q. YOU HAVE BEEN INTERRUPTED AND DISTRACTED. YOU HAVE

13 NO NEED TO APOLOGIZE, BUT LOOK AT PARAGRAPH 118 ON PAGE 67

14 OF YOUR WRITTEN DIRECT AND, SPECIFICALLY, THE FIRST

15 SENTENCE THEREOF.

16 A. YES, SIR.

17 Q. WHERE YOU MAKE THE STATEMENT, "IN MARCH 1996, IN

18 RESPONSE TO THE COMBINED THREAT OF JAVA NAVIGATOR,

19 MICROSOFT ATTEMPTED TO TURN THE INTERNET FROM AN OPEN

20 SYSTEM TO A MICROSOFT PROPRIETARY SYSTEM." DO YOU SEE

21 THAT?

22 A. YES, SIR.

23 Q. WHAT'S THE BASIS FOR THAT STATEMENT? HOW DO YOU KNOW

24 THAT MICROSOFT DID ANYTHING IN RESPONSE TO THE COMBINED

25 THREAT OF JAVA NAVIGATOR?

70

1 A. BY GOING TO SAY WHAT I THOUGHT THEY DID.

2 Q. I'M SORRY?

3 A. I GO ON TO SAY--

4 Q. WE WILL COME TO THAT. THAT'S THE BASIS FOR THE

5 STATEMENT?

6 A. THE ACTION, YES, SIR.

7 Q. OKAY. AND WHAT IS A PROPRIETARY SYSTEM?

8 A. IT WOULD BE A PRODUCT THAT WOULD ONLY RUN ON--FOR

9 EXAMPLE, IN THE SOFTWARE WORLD, IT WOULD BE A PRODUCT THAT

10 WOULD ONLY RUN IN ONE ENVIRONMENT AND NOT OTHERS, I

11 SUPPOSE WOULD BE THE SIMPLEST DEFINITION.

12 Q. AND IS IT POSSIBLE TO TURN THE INTERNET FROM AN OPEN

13 SYSTEM TO A PROPRIETARY SYSTEM?

14 A. IT IS, YES, SIR.

15 Q. OKAY. LOOKING AT ACTIVEX, YOU SAY THAT WAS

16 MICROSOFT'S EFFORT TO MAKE SOFTWARE DEVELOPERS CREATE

17 SOFTWARE CONTENT BINDING THE INTERNET TO WINDOWS.

18 A. YES.

19 Q. HOW CAN MICROSOFT MAKE SOFTWARE DEVELOPERS CREATE

20 SOFTWARE THROUGH ACTIVEX OR THING ELSE?

21 A. WELL, VARIOUS WAYS. THEY CAN PROVIDE IT TO THEIR

22 DEVELOPERS. IF IT IS THE ONLY PROTOCOL AVAILABLE TO THEIR

23 DEVELOPERS TO DEVELOP THOSE PRODUCTS ON WINDOWS PLATFORM,

24 IT WOULD, IN FACT, MAKE THEM BECAUSE THEY ARE DEPENDENT ON

25 WINDOWS PLATFORM AS DEVELOPER'S PLATFORM, JUST LIKE WITH

71

1 THEIR VERSION OF JAVA. IF THEY DID NOT OFFER ANOTHER

2 VERSION OF JAVA OR ANOTHER VERSION OF ACTIVEX, IT WOULD BE

3 PROPRIETARY.

4 Q. SO, ACTIVEX WOULD REQUIRE THEM, IS YOUR TESTIMONY, IT

5 REQUIRES PEOPLE TO WRITE SOFTWARE BINDING THE INTERNET TO

6 WINDOWS; IS THAT RIGHT?

7 A. IF A DEVELOPER CREATED A PRODUCT UNDER ACTIVEX, IT

8 WOULD WORK ONLY TO MICROSOFT'S ADVANTAGE AND ONLY ON THEIR

9 PLATFORM.

10 Q. THE DEVELOPER DIDN'T HAVE TO CREATE IT USING ACTIVEX,

11 DID HE?

12 A. NO, SIR.

13 Q. HE DIDN'T HAVE TO CREATE ANY DESIGN WHERE YOU DISCUSS

14 OPERATING SYSTEMS. DO YOU SEE THAT?

15 A. YES, I DO.

16 Q. WHAT ARE THE FUNCTIONS OF AN OPERATING SYSTEM,

17 WITHOUT REFERENCE TO DOCUMENTS?

18 A. BASIC FUNCTION OF AN OPERATING SYSTEM IS TO ACT AS A

19 TRAFFIC COP, IF YOU WILL, AMONG THE SYSTEM RESOURCES,

20 PERIPHERALS, MEMORY AND PROCESSING UNIT AND BUS TO KEEP IT

21 ORGANIZED AND WORKING TOGETHER EFFICIENTLY, YOU KNOW.

22 EFFICIENTLY.

23 Q. HAVE THE FUNCTIONS OF OPERATING SYSTEMS CHANGED OVER

24 TIME?

25 A. THEY HAVE CHANGED IN THAT THEY HAVE ADDED CERTAIN

72

1 FUNCTIONS, BUT IT'S STILL BASICALLY THE SAME FUNCTION AS

2 THE FIRST OPERATING SYSTEMS INTRODUCED IN THE LATE 1950S.

3 Q. GOING TO PARAGRAPH 71 ON PAGE 40, WHICH DISCUSSES OR

4 MENTIONS VARIOUS OPERATING SYSTEMS.

5 A. YES, SIR.

6 Q. DO YOU KNOW WHAT LINUX IS?

7 A. YES, SIR.

8 Q. DO YOU KNOW WHO WROTE IT?

9 A. YES. A YOUNG MAN IN SCANDINAVIA, LINUS MYHRVOLD OR

10 SOMETHING.

11 Q. HOW MANY USERS DOES LINUX HAVE?

12 A. I DON'T KNOW.

13 Q. IS IT AT LEAST 8 MILLION?

14 A. I HAD SEEN THAT FIGURE DISCUSSED. I HAD SEEN

15 MICROSOFT POO-POO THAT NUMBER, BUT I HAVE SEEN THAT NUMBER

16 AS PROMOTED BY OTHERS. MICROSOFT TENDS TO SAY IT'S MUCH

17 LESS THAN THAT, BUT I DON'T KNOW HOW MANY THEY HAVE. IT'S

18 A FREEWARE APPLICATION.

19 Q. WELL, HAVE YOU GIVEN FINANCIAL BACKING--THAT IS, YOU,

20 NETSCAPE, HAVE A COMPANY CALLED "RED HAT" WHICH IS THE TOP

21 LINUX VENDOR, HAVE YOU NOT?

22 A. VENDOR, THEY ARE A SUPPORT COMPANY FOR IT, YES. WE

23 MADE AN INVESTMENT ALONG WITH INTEL AND SOME OTHER

24 COMPANIES.

25 Q. AND IN CONNECTION WITH MAKING THAT INVESTMENT, DID

73

1 YOU CHECK OUT THE FACTS WITH RESPECT TO LINUX, INCLUDING

2 HOW MANY PEOPLE HAVE IT AND SO ON?

3 A. THE PEOPLE ON OUR STAFF MAY HAVE. I DIDN'T.

4 Q. YOU SAID INTEL HAD ALSO MADE AN INVESTMENT; IS THAT

5 CORRECT?

6 A. I THINK THEY DID. THERE MAY BE SOME OTHERS. THERE

7 WERE SOME OTHER PEOPLE WHO INVESTED IN IT. WE WERE ONE

8 INVESTOR.

9 Q. DOES NETSCAPE BELIEVE THAT LINUX IS A SECURE AND

10 ROBUST OPERATING SYSTEM?

11 A. WE DO.

12 Q. DO YOU BELIEVE IT'S A HIGHLY STABLE HIGH-PERFORMANCE

13 PLATFORM?

14 A. WE DO.

15 Q. AND THE RED HOT OR RED HAT COMPANY, HAS THAT

16 ATTRACTED SUBSTANTIAL VENTURE CAPITAL FROM A NUMBER OF

17 FIRMS?

18 A. I BELIEVE THEY HAVE GOTTEN SOME INVESTMENTS. I DON'T

19 KNOW IF I WOULD CHARACTERIZE IT AS SUBSTANTIAL, BUT I

20 THINK THEY MAY THINK IT GOT SOME GOOD INVESTORS.

21 Q. IN ADDITION, HAS ORACLE BACKED RED HAT?

22 A. I THINK THEY HAVE.

23 Q. INFORMIX, HAVE THEY BACKED RED HAT?

24 A. MAY HAVE.

25 Q. SYBASE?

74

1 A. MAY HAVE.

2 Q. IBM?

3 A. MAY HAVE.

4 Q. COMPUTER ASSOCIATES?

5 A. DON'T KNOW.

6 Q. AND YOU'RE NOT SURE ABOUT INTEL?

7 A. I MAY HAVE CONFUSED INTEL WITH ORACLE WHEN I SAID

8 "INTEL." THEY HAD SEVERAL PEOPLE WHO INVESTED IN IT.

9 Q. DO YOU KNOW WHAT APPLICATIONS EXIST FOR LINUX?

10 A. NOT SPECIFICALLY, BUT I KNOW OUR BROWSER RUNS ON TOP

11 OF LINUX, AND I KNOW THAT OTHER PRODUCTS RUN WITH THEM. I

12 KNOW OUR ENGINEERS USE IT, USE THE PRODUCTS.

13 Q. ANY OTHERS?

14 A. I WOULD ASSUME THAT THERE IS A GROWING NUMBER OF

15 APPLICATIONS THAT RUN ON TOP OF IT. IT TENDS TO BE, AS I

16 UNDERSTAND IT, A PLATFORM THAT A LOT OF TECHNICAL

17 PROFESSIONALS LIKE AND PREFER FOR DEVELOPING APPLICATIONS.

18 IT SUPPORTS A VERY BROAD RANGE OF PERIPHERALS.

19 Q. GOING TO PARAGRAPH 72, LOOKING AT THE FIRST LINE,

20 WHAT DO YOU MEAN BY LOCK-IN THERE?

21 A. PRINCIPAL LOCK-IN WOULD BE THAT IT'S THE THEORY OF

22 INCREASING RETURNS THAT HAD BEEN WRITTEN ABOUT SO MUCH

23 LATELY. IT SAYS THAT THE ADVANTAGE OF HAVING A BIG

24 DEVELOPER OR BIG DEVELOPER PLATFORM BROADLY DISTRIBUTED IS

25 DEVELOPERS CREATE A LOT OF APPLICATIONS; AND THEREFORE, IT

75

1 DRIVES OUT THE OTHERS, LIKE VHS IN THE VIDEOTAPE WORLD

2 DROVE OUT BETA BECAUSE PEOPLE BEGAN--ONCE IT TIPPED OVER

3 TOWARDS VHS, PEOPLE BEGAN TO DEVELOP MOTION PICTURES JUST

4 FOR VHS, SO BETA WENT OUT OF BUSINESS. THAT WOULD BE A

5 LOCK-IN BY VHS.

6 Q. WHEN DID YOU FIRST BECOME CONVERSANT OR FAMILIAR WITH

7 THE TERMS LOCK-IN, NETWORK EFFECTS, INCREASING RETURNS?

8 A. WELL, I DON'T KNOW. I HAVE A LONG BUSINESS CAREER.

9 I SUPPOSE I READ ABOUT NETWORK EFFECTS, YOU KNOW, FOR A

10 WHILE. THAT WAS WRITTEN BY SOME PEOPLE AT STANFORD. I

11 REMEMBER THE DISCUSSIONS OF MATTERS LIKE THESE.

12 Q. ARE THESE TERMS YOU USE IN YOUR ORDINARY CONVERSATION

13 AND CORRESPONDENCE?

14 A. IT'S A TERM I WOULD USE IF YOU ASKED ME TO DESCRIBE

15 HOW THIS HAPPENED THAT MICROSOFT GOT A LOCK IN. THAT

16 WOULD BE, I WOULD SAY THAT THE DEVELOPERS BEGAN DEVELOPING

17 LARGE QUANTITY, AND AS THEY DO THAT, IT TENDS TO CREATE

18 MORE AND MORE OF MARKET AND DRIVES OTHERS OUT. IN OUR

19 INDUSTRY AND OUR BUSINESS, WE READ ABOUT THESE THINGS

20 TRYING TO BUILD BUSINESS STRATEGIES. FOR EXAMPLE, A BOOK,

21 INSIDE THE TORNADOES BY JAMES MOORE, TALKS ABOUT THIS.

22 INSIDE THE TORNADOES WAS A VERY POPULAR BOOK THREE YEARS

23 AGO THAT TALKS ABOUT THE TYING AND INCREASING RETURNS AND

24 HOW YOU BUILD--TRY TO GET MARKET SHARE, AND IT USES

25 MICROSOFT AS THE BEST EXAMPLE OF THIS ON THE PLANET, TO

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1 THEIR CREDIT.

2 Q. DID YOU USE THIS TERMINOLOGY BEFORE YOU BECAME

3 INVOLVED WITH THE DEPARTMENT OF JUSTICE IN CONNECTION WITH

4 THE INVESTIGATION THAT LED TO THIS LAWSUIT?

5 A. LOCK-IN.

6 Q. AND NETWORKING EFFECTS AND INCREASING RETURNS.

7 A. I THINK I DISCUSSED NETWORK EFFECTS AND INCREASING

8 RETURNS SINCE THE TERMS WERE POPULAR. I DON'T REMEMBER

9 WHETHER THAT WAS BEFORE OR AFTER I JOINED NETSCAPE. AT

10 FEDERAL EXPRESS WE WORKED VERY HARD ON GETTING BROAD

11 DISTRIBUTION, GET PEOPLE USED TO USING OUR PRODUCTS SO WE

12 WOULD GET MORE PRODUCTS BECAUSE WE WENT MORE PLACES.

13 THERE IS A GREAT COMMONALITY IN THE NETWORK

14 EFFECT BETWEEN BUILDING FEDERAL EXPRESS AND BUILDING MCCAW

15 CELLULAR AND BUILDING NETSCAPE IN TERMS OF THE NETWORK

16 EFFECT.

17 Q. WELL, IN FACT, BOTH FEDERAL EXPRESS AND A TELEPHONE

18 COMPANY HAVE NETWORKS, DO THEY NOT?

19 A. THAT'S WHAT I'M TALKING ABOUT.

20 Q. AND BROWSER DEVELOPERS AND VENDORS OR OPERATING

21 SYSTEM VENDORS DON'T HAVE NETWORKS IN THE SAME SENSE THAT

22 FEDERAL EXPRESS OR THE TELEPHONE COMPANY HAVE THEM, DO

23 THEY?

24 A. ALL I'M SAYING IS THE NETWORK CREATED IS THAT THE

25 POWER OF A NETWORK IS THE NUMBER OF OTHER USERS THAT

77

1 DEPEND ON YOU. SO, EVEN THOUGH YOU MAY NOT BE DIRECTLY

2 CONNECTED TO THE OTHER USERS, IF YOU WRITE THE ONE BIG

3 WORD APPLICATION AND EVERYBODY WANTS TO USE THAT, THAT IS

4 A NETWORK OF WORD USERS.

5 Q. YOU ALSO REFER IN THE FIRST PARAGRAPH OF 72 TO

6 MICROSOFT'S HAVING A MONOPOLY POSITION IN PC OPERATING

7 SYSTEMS. DO YOU SEE THAT?

8 A. ON THE NEXT PAGE?

9 Q. NO, RIGHT IN THE SAME SENTENCE WE WERE LOOKING AT.

10 A. I SEE IT.

11 Q. WHEN DID MICROSOFT ACHIEVE THAT POSITION, IN YOUR

12 JUDGMENT?

13 A. PROBABLY WHEN OS-2 BECAME NONCOMPETITIVE, WHICH WOULD

14 BE ROUGHLY, I BELIEVE, IN THE EARLY NINETIES.

15 Q. YOU REFERRED TO A WIDE VARIETY OF APPLICANTS FOR

16 WINDOWS, DISCUSSING THE NETWORK EFFECTS.

17 A. IN THE PREVIOUS PARAGRAPH I TALK ABOUT THAT, YES.

18 Q. ISN'T IT TRUE THAT UNIX HAS HAD TROUBLE ATTRACTING

19 APPLICATIONS BECAUSE IT COMES IN MANY FLAVORS?

20 A. THAT WOULD BE ONE OF THE REASONS, YES, SIR.

21 Q. SO, THAT AN APPLICATION WRITTEN TO ONE COMPANY'S UNIX

22 DOESN'T NECESSARILY WORK ON ANOTHER COMPANY'S UNIX; IS

23 THAT RIGHT?

24 A. THAT'S CORRECT.

25 Q. OKAY. LET'S GO TO PAGE 42, PARAGRAPH 74, WHERE WE

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1 SEE NETWORK EFFECT THAT WE ALREADY TALKED ABOUT.

2 DOES NETWORK EFFECTS CONTRIBUTE TO NETSCAPE'S

3 GETTING 85 PERCENT OR MORE OF ALL BROWSER SOFTWARE USE BY

4 1995?

5 A. IT MAY BE OF A SLIGHTLY DIFFERENT TYPE BECAUSE IT

6 REALLY DID HAVE A CONNECTED NETWORK, BUT WE HAD A LARGE

7 BASE OF USERS. AND CONSEQUENTLY, DEVELOPERS BEGAN

8 DEVELOPING FOR OUR BROWSER, AND THAT HELPED CREATE THE

9 NEED FOR MORE BROWSERS FROM US.

10 Q. LOOKING AT PARAGRAPH 76, WHAT'S A CROSS-PLATFORM

11 BROWSER?

12 A. A CROSS-PLATFORM BROWSER WOULD GENERALLY BE A TERM

13 THAT IT WOULD RUN ON MORE THAN ONE OPERATING SYSTEM OR

14 PLATFORM.

15 Q. DOES THAT MEAN WITH A SINGLE CODE BASE?

16 A. SOME COMPONENTS MIGHT IF THEY WERE WRITTEN IN JAVA.

17 OTHER COMPONENTS MIGHT NOT, THAT THEY COULD BE WRITTEN IN

18 THE SAME LANGUAGE BUT MODIFIED TO SUPPORT VARIOUS API'S

19 FROM A VERY DIFFERENT OPERATING SYSTEM.

20 Q. LEAVING JAVA ASIDE, THEY WOULD HAVE TO BE PORTED?

21 A. YES, IT MEANS TO PORT OR CHANGE FROM ONE OPERATING

22 SYSTEM TO ANOTHER. YOU TAKE A BASE AND MODIFY IT AND PORT

23 IT. THAT IS A GENERAL WAY THAT WE DO IT AND OTHERS DO IT,

24 I BELIEVE.

25 Q. WITH THE EXCEPTION OF JAVA, I TAKE IT NETSCAPE HAS

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1 NEVER DEVELOPED A SINGLE PIECE OF BROWSING SOFTWARE THAT

2 RUNS ON ALL PLATFORMS?

3 A. CERTAIN COMPONENTS DO, BUT NO, SIR. THEY ARE

4 DIFFERENT PRODUCTS AND DIFFERENT STOCK KEEPING UNITS.

5 Q. DID NETSCAPE ATTEMPT TO DEVELOP BROWSING SOFTWARE

6 EXCLUSIVELY IN JAVA SO IT WOULD BE TRULY CROSS-PLATFORMED?

7 THE COURT: ASK THAT AGAIN.

8 BY MR. WARDEN:

9 Q. DID NETSCAPE ATTEMPT TO DEVELOP BROWSING SOFTWARE

10 EXCLUSIVELY IN JAVA SO THAT IT WOULD BE TRULY

11 CROSS-PLATFORMED?

12 A. YES, SIR, WE DID.

13 Q. BEFORE PURSUING THAT, WHEN YOU PORT TO ANOTHER

14 PLATFORM--I'M NOT TALKING ABOUT JAVA NOW--THE INCENTIVE TO

15 DO THAT DEPENDS ON THE NUMBER OF COPIES OF THAT PLATFORM

16 THAT ARE OUT IN USE; IS THAT CORRECT?

17 A. CORRECT.

18 Q. AND GOING BACK TO THE ALLEGED UNLAWFUL PROPOSAL AND

19 THREATS AT THE JUNE 21 MEETING FOR A MOMENT, DID YOU

20 COMPLAIN TO OR OTHERWISE COMMUNICATE WITH MR. MARITZ OR

21 MR. GATES AFTER THAT MEETING ABOUT THE PROPOSAL THAT YOU

22 SAY HAD STUNNED YOU?

23 A. I DON'T BELIEVE I DID, NO.

24 MR. WARDEN: YOUR HONOR, MR. LACOVARA IS ADVISING

25 ME BY NOTE THAT WE HAVE NO MORE EXHIBITS REMARKED IN THE

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1 EXAMINATION, SO I WILL EITHER TAKE A VERY BRIEF RECESS AND

2 MARK SOME OR WE CAN CONCLUDE.

3 AND I MIGHT ADVISE THE COURT THAT I WILL HAVE--I

4 WILL CERTAINLY FINISH ON MONDAY.

5 THE COURT: ALL RIGHT. WHY DON'T WE CONCLUDE,

6 SINCE THIS IS THE WEEKEND.

7 MR. WARDEN: THANK YOU, YOUR HONOR.

8 MR. BOIES: YOUR HONOR, ON SCHEDULING, BECAUSE OF

9 THE LENGTH OF THIS EXAMINATION, WE HAVE GOTTEN INTO A

10 LITTLE BIT OF A PROBLEM WITH SOME OF OUR NEXT COMING

11 WITNESSES. OUR PLAN IS TO HAVE MR. TEVANIAN FROM APPLE BE

12 OUR NEXT WITNESS.

13 THE COURT: ALL RIGHT.

14 MR. BOIES: THAT WAS OUR ORIGINAL PLAN.

15 UNFORTUNATELY, HE IS GOING TO BE TIED UP IN A HEARING WITH

16 HIS COUNSEL IN CALIFORNIA STARTING ON WEDNESDAY OF NEXT

17 WEEK, SO WHAT WE ARE GOING TO DO IS TO MOVE MR. COLBURN,

18 WHO HAD BEEN OUR THIRD WITNESS, UP TO BE OUR SECOND

19 WITNESS. AND HE WILL BE ON THE STAND ON WEDNESDAY IN

20 ORDER TO PERMIT COUNSEL FOR MICROSOFT TO HAVE ADEQUATE

21 TIME TO PREPARE FOR MR. COLBURN AND SINCE THIS IS A

22 CHANGE. WE ARE GOING TO USE TUESDAY, TO THE EXTENT WE ARE

23 NOT OCCUPIED, AS WE APPARENTLY WILL NOT BE WITH

24 MR. BARKSDALE, TO DO THE DEPOSITIONS OF MR. GATES.

25 THE COURT: ALL RIGHT. ARE YOU GOING TO HAVE

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1 REDIRECT?

2 MR. BOIES: WE WILL HAVE SOME REDIRECT, BUT I

3 ANTICIPATE THAT IT WILL NOT BE MORE THAN A COUPLE OF

4 HOURS.

5 THE COURT: WE COULD DO THAT ON TUESDAY IF

6 MR. WARDEN FINISHES ON MONDAY?

7 MR. BOIES: YES.

8 THE COURT: DEVOTE THE REST OF THE DAYS TO

9 DEPOSITIONS?

10 MR. BOIES: YES, AND START WITH MR. COLBURN ON

11 WEDNESDAY.

12 THE COURT: THAT WOULD BE PERFECTLY ALL RIGHT.

13 MR. WARDEN: THANK YOU, YOUR HONOR.

14 THE COURT: HAVE A PLEASANT WEEKEND.

15 (WHEREUPON, AT 4:35 P.M., THE HEARING WAS

16 ADJOURNED UNTIL 10:00 A.M, MONDAY, OCTOBER 26, 1998.)

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82

1 CERTIFICATE OF REPORTER

2

3 I, DAVID A. KASDAN, RPR, COURT REPORTER, DO

4 HEREBY TESTIFY THAT THE FOREGOING PROCEEDINGS WERE

5 STENOGRAPHICALLY RECORDED BY ME AND THEREAFTER REDUCED TO

6 TYPEWRITTEN FORM BY COMPUTER-ASSISTED TRANSCRIPTION UNDER

7 MY DIRECTION AND SUPERVISION; AND THAT THE FOREGOING

8 TRANSCRIPT IS A TRUE RECORD AND ACCURATE RECORD OF THE

9 PROCEEDINGS.

10 I FURTHER CERTIFY THAT I AM NEITHER COUNSEL FOR,

11 RELATED TO, NOR EMPLOYED BY ANY OF THE PARTIES TO THIS

12 ACTION IN THIS PROCEEDING, NOR FINANCIALLY OR OTHERWISE

13 INTERESTED IN THE OUTCOME OF THIS LITIGATION.

14 ______________________ 15 DAVID A. KASDAN

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