Harvard, MIT fighting Microsoft demand

Catching a whiff of what it thinks is a smoking gun, Microsoft has requested research from professors at Harvard University and MIT for its defense in a pending federal antitrust trial. But the universities are fighting that request in court. They fear that if confidential notes and tapes for a forthcoming book called 'Competing on Internet Time: Lessons From Netscape and its Battle with Microsoft' are taken, it will compromise their ability to conduct academic resarch in future.

Catching a whiff of what it thinks is a smoking gun, Microsoft has requested research from professors at Harvard University and Massachusetts Institute of Technology (MIT) for its defense in a pending federal antitrust trial. However, the universities are fighting that request in court.

Microsoft has subpoenaed the researchers' notes and tapes from their interviews with Netscape Communications executives, according to Michael Cusumano, professor at MIT's Sloan School of Management. In them, Netscape employees and executives, including company head Marc Andreessen, make detailed statements about Netscape's mistakes and missteps, and Microsoft wants to use the material to show that Netscape's own business decisions, not Microsoft's unfair practices, caused Netscape's browser market share to falter, Cusumano said.

The research, performed by Cusumano and David Yoffie of Harvard Business School, is part of the two professors' forthcoming book, called "Competing on Internet Time: Lessons From Netscape and its Battle with Microsoft."

Microsoft got hold of Netscape's copy of the manuscript by subpoenaing it several weeks ago as part of its defense strategy in its upcoming antitrust trial in US District Court, according to Cusumano. The Redmond, Washington-based software giant then subpoenaed Cusumano and Yoffie last Friday, seeking access to the primary material on which the book is based, Cusumano said. The primary material includes tape recordings of interviews, notes and transcripts of interviews, and documents pertaining to the authors' communications of any kind with present and former Netscape employees, he said.

The deadline for Cusumano and Yoffie to turn over the material was yesterday, but Microsoft's subpoena for the research has been challenged in US District Court by the universities on behalf of the two professors, Cusumano said.

Microsoft's eagerness to have access to Netscape executives' comments is understandable, given Cusumano's description of them.

The 60 hours of tape include interviews lasting from one to three hours of around 40 Netscape executives and employees, some of whom detail "a number of business decisions and technology decisions that didn't work out so well," Cusumano said. "There were significant delays and technical decisions that did not work out, there's no doubt about that," he said.

For example, Netscape officials say that they rushed their browser to market very quickly and consequently did not have sufficient time to modularise the product adequately, which made it difficult to test it for quality or add new features, Cusumano said.

The code ended up being a mess, Cusumano said Netscape officials concede on the tape. "The term they use is 'spaghetti code'," he said. In the time it took to redefine it, Microsoft caught up with a solid browser of its own, Cusumano said the tapes record.

Another mistake Netscape officials discuss on tape is their decision to rewrite Navigator and Communicator in Java, according to Cusumano. "They probably wasted eight months on that," from July 1997 to February of this year, when they canceled the project, he said.

Cusumano said he is negotiating with Microsoft, hoping to avoid a judicial order to turn the research over to Microsoft. "We're willing to let Microsoft have a third party verify the accuracy of the quotes in the book," but Microsoft rejected that offer, he said.

Cusumano said it is up to the court to decide whether mistakes by Netscape or unfair practices by Microsoft caused Netscape to rapidly lose market share. Netscape once dominated the browser market by a wide margin, but now Netscape lost nine points of market share among U.S. users in the first half of this year while Microsoft gained not quite five points, according to a brand new study by market researcher International Data.

However, Cusumano was not neutral about the possibility of the court compelling him to turn over his research to Microsoft.

"We did this research under an explicit nondisclosure agreement with Netscape," Cusumano said. "The only reason people talked openly was because the promises of confidentiality."

But from a legal standpoint, the argument that the tapes and notes are confidential is irrelevant, according to Charles Biggio, partner at Akin, Gump, Strauss, Hauer & Feld, LLP in New York and a former senior official in antitrust division of the U.S. Department of Justice.

Claims of confidentiality may affect how the documents are treated in court, but will not affect whether the judge permits them to be in court in the first place, Biggio said.

"Microsoft has a lot of confidential information that it can't withhold from the government on the basis of it being confidential," and the same is true for other parties involved in the case, Biggio said. "Pure confidentiality wouldn't be a defense to producing the information," he said.

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