MS/DOJ: Netscape hurt itself, Myhrvold says

Microsoft acted as a 'pro-competitive force' among ISPs, and any losses Netscape Communications suffered in browser usage were the result of its own mistakes, says Microsoft executive Cameron Myhrvold in written testimony released as part of its antitrust trial. 'Any erosion in Netscape's usage share of Web browsing software can more plausibly be explained by its own poor business decisions and its insensitivity to the needs of ISPs, especially smaller ISPs,' he says.

Microsoft acted as a "pro-competitive force" among Internet service providers (ISPs), and any losses Netscape Communications suffered in browser usage were the result of its own mistakes, says Microsoft executive Cameron Myhrvold, in written testimony released as part of the software giant's antitrust trial.

Myhrvold's 57-page testimony responds to government allegations that the company used exclusive contracts with ISPs to thwart Netscape's ability to distribute its browser.

"Any erosion in Netscape's usage share of Web browsing software can more plausibly be explained by its own poor business decisions and its insensitivity to the needs of ISPs, especially smaller ISPs," said Myhrvold in his testimony.

"Netscape's decision to charge ISPs high prices for its Web browsing software was not a strategy that was sustainable over the long term," said Myhrvold, who is a vice president in Microsoft’s Internet Customer Unit.

Microsoft gave its browsing software away for free, an action the government has alleged is predatory pricing and illegal under antitrust laws. Netscape ultimately stopped charging for its browser.

Myhrvold was expected to begin testifying in person at the trial tomorrow. He follows William Poole, senior director of business development for Windows at Microsoft, who was on the witness stand today.

Myhrvold's testimony paints Microsoft as the underdog when it entered the browser market in late 1995 and early 1996. At that time, Netscape had more than 80% "usage share" of that market.

Microsoft "worked hard" to gain acceptance among ISPs by redesigning its Web browsing software and in "developing ways of supporting ISPs that would help them grow their business," said Myhrvold.

One way Microsoft offered support to ISPs was to allow them to customise Internet Explorer, said Myhrvold.

Even ISPs that signed up for Microsoft's Windows 95 Referral Server Program, a program that provided users with a list of ISPs, continued to ship "millions" of copies of Netscape's browser, he said.

Those shipments, said Myhrvold, continued "during the very period in which the government claims that Microsoft was forcing them to distribute only Internet Explorer."

(Patrick Thibodeau is a senior writer at Computerworld.)

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