MS/DOJ: Netscape exec in first public deposition

The former CFO of Netscape Communications kept his cool, his humor and his former company's story intact while being questioned in court by a Microsoft attorney over events leading up to America Online's recent acquisition of Netscape. Microsoft is deposing Peter Currie and other officials involved in the merger to utry and undermine the government's claim in its the antitrust trial that Microsoft is a monopoly without any real competition.

The former chief financial officer of Netscape Communications kept his cool, his humor and his former company's story intact while being questioned in court by a Microsoft attorney over events leading up to America Online's recent acquisition of Netscape.

Microsoft is deposing Peter Currie and other officials involved in the merger in an attempt to undermine the government's claim in its antitrust trial against Microsoft that the software giant is a monopoly without any real competition.

However Microsoft attorney Michael Lacovara also wanted to show that decisions regarding the merger were made with the intent of influencing the government's antitrust case.

Microsoft offered no documents today to support its collusion charge, but the four-hour deposition ended with a promise from Microsoft officials that the best was yet to come.

Meanwhile, government attorneys said Currie's deposition won't affect the antitrust case. "I don't think the witness was very much help to Microsoft," said David Boies, the lead government attorney.

While Currie added new light on the merger, he said little that would undercut earlier testimony by Netscape Chief Executive Officer James Barksdale concerning the impact Microsoft had on his company once Microsoft began giving Internet Explorer away.

At today's deposition, which was opened to the public by court order and held in a downtown hotel here, Microsoft attorney Lacovara spent a lot of effort questioning Currie about the timing of the then secret negotiations between AOL and Netscape.

The merger was code-named "Odyssey." Netscape was referred to as "Bird Dog," Sun Microsystems, which acquired some of Netscape's technology as part of the deal, was called "Zeus" and AOL was called either "Apollo " or "Ace."

Discussions between the companies began in late August last year and were moving rapidly by September, said Currie. "It seemed as though we were on quite a fast time frame," he said.

But negotiations soon stopped, with a "hiatus" that lasted for about a month or so, according to Currie. Meanwhile, the government's antitrust trial against Microsoft began in late October with Netscape CEO Barksdale called as the first witness.

Netscape was worried AOL would back out of the deal because it feared the animosity of Microsoft, Currie said. "If AOL got cold feet or weak-kneed the deal would vanish," he said.

Currie, in response to questions from Lacovara, said the antitrust trial had little impact on merger talks. Although it was discussed in a "general sense," there was agreement that the case was "a separate issue," he said.

US Department of Justice officials may have been told in September about the merger, Currie said, but he wasn't sure. Separately, Boies said the DOJ wasn't alerted to the merger talks until mid-November.

After the deposition, Lacovara told reporters that his questions about when the DOJ was notified about the merger talks were based on "good faith" -- meaning that Microsoft has something it can use to back up the questions. Microsoft is clearly trying to show that the merger was delayed until after the trial had begun and Barksdale had testified.

Microsoft will likely resume that line of questioning on Friday, when it deposes Michael Popov, vice president at Sun and a key figure in the merger agreement, in San Francisco.

As far as the merger's impact on competition, Lacovara used documents prepared by the investment firm Morgan Stanley Dean Witter & Co. which described the merger as an "industry defining moment." But

Currie was dismissive about that analysis and sarcastically referred to the "self-congratulatory" tone of the documents.

Currie also said that while Netscape had lobbied hard to get AOL to use its browser technology instead of Microsoft's, it had no assurance that would occur as a result of the merger. In any event, issues about

future expectations didn't play a major role in the merger talks, he said.

"When you get a room of CFOs and comptrollers you don't talk about next generation anything," said Currie.

The Microsoft antitrust trial has been in recess since the end of February. It is expected to resume May 17 or later due to another case being heard by the judge.

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