10.13.20

Transcripts of Bill Gates’ Lies: Part III

Posted in Antitrust, Bill Gates, Courtroom, Microsoft at 9:23 am by Dr. Roy Schestowitz

Part 3 (of a total of 4)

Gates deposition 1998

Summary: Techrights is curating and maintaining plain text versions of the Gates deposition of 1998, in which years if not decades of the company’s abuses were scrutinised in a face-to-face fashion

Previous parts: Part I, Part II

Videos of the deposition: First part, second part, third part, fourth part, fifth part, sixth part, seventh part, eighth part, ninth part, tenth part, eleventh part, and last part

Selected transcripts of the deposition: Few annotated transcripts and longer transcripts


1 IN THE UNITED STATES DISTRICT COURT
2 FOR THE DISTRICT OF COLUMBIA
3
4
5 UNITED STATES OF AMERICA, )
) No. CIV 98-1232(TPJ)
6 Plaintiff, )
) VOLUME II
7 vs. ) (Afternoon Session)
)
8 MICROSOFT CORPORATION, ) CONFIDENTIAL
)
9 Defendant. )
)
10
11
12 CONTINUATION OF THE DEPOSITION OF BILL
13 GATES, a witness herein, taken on behalf of the
14 plaintiffs at 12:35 p.m., Friday, August 28, 1998, at
15 One Microsoft Way, Redmond, Washington, before
16 Katherine Gale, CSR, pursuant to Subpoena.
17
18
19
20
21
22
23 REPORTED BY:
Katherine Gale
24 CSR No. 9793
Our File No. 1-49006 25

1 APPEARANCES OF COUNSEL:
2 FOR THE UNITED STATES OF AMERICA:
3 UNITED STATES DEPARTMENT OF JUSTICE
BY PHILLIP R. MALONE
4 KARMA M. GIULIANELLI
450 Golden Gate Avenue
5 Box 36046
San Francisco, California 94102
6 (415) 436-6660
7 BOIES & SCHILLER LLP
BY DAVID BOIES
8 80 Business Park Drive
Armonk, New York 10504-1710
9 (914) 273-9800
10 FOR MICROSOFT CORPORATION:
11 MICROSOFT CORPORATION
LAW AND CORPORATE AFFAIRS
12 BY DAVID A. HEINER
WILLIAM H. NEUKOM
13 One Microsoft Way
Redmond, Washington 98052
14 (425) 936-3103
15 SULLIVAN & CROMWELL
BY RICHARD J. UROWSKY
16 125 Broad Street
New York, New York 10004
17 (212) 558-3546
18
FOR THE PLAINTIFF STATES:
19
STATE OF NEW YORK
20 OFFICE OF ATTORNEY GENERAL
BY STEPHEN D. HOUCK
21 GAIL P. CLEARY
THEODORE ZANG
22 120 Broadway
New York, New York 10271-0332
23 (212) 416-8275
24 ALSO PRESENT: PRISCILLA ALVAREZ, Paralegal
25 MICHEL CARTER, Video Operator

BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 I N D E X
2
3 WITNESS EXAMINATION BY PAGE
4 Bill Gates Mr. Boies 391
5
6 GOVERNMENT
EXHIBITS:
7
372 E-mail dated 4/14/97 399
8
373 E-mail dated 7/1/97 404
9
374 E-mail dated 8/25/97 441
10
375 E-mail dated 10/12/97 469
11
376 E-mail dated 4/17/97 393
12
377 E-mail dated 6/12/97 453
13 with Attachment
"How to Get To 30%
14 Share In 12 Months"
15 378 E-mail dated 5/14/97 449
16 379 E-mail dated 6/18/97 496
17
18
19
20
21
22
23
24
25
BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 BILL GATES,
2 a witness herein, having been previously duly sworn,
3 was deposed and testified as follows:
4
5 THE VIDEOGRAPHER: The time is 12:35.
6 We're going back on the record. This is Tape 3 of
7 the videotaped deposition of Bill Gates on August 28.
8
9 EXAMINATION (Continued)
10 BY MR. BOIES:
11 Q In connection with Intuit, Mr. Gates,
12 insofar as you were aware, was there any effort to
13 get Intuit to agree that Intuit would not promote
14 Netscape's browser?
15 A I'm not aware of any -- anything
16 specifically related to promotion. As I said, I
17 didn't deal with them directly. You could say
18 that -- ask them not to support Netscape as their
19 standard supported browser. It's a change in their
20 promotion of Netscape.
21 Q Yes. I take that point. Let me make
22 the question a little more precise.
23 Other than an attempt to get Intuit to
24 make Internet Explorer into its default browser, did
25 Microsoft make any effort, that you're aware of, to
391 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 get Intuit not to support or advertise Netscape's
2 browser?
3 A It's kind of a strange question because
4 Intuit never would have specifically advertised
5 someone's browser. So I don't know what -- what do
6 you mean by promotion when you give that example?
7 Q Well, I'm really just asking for what
8 Microsoft did. And if you don't understand the
9 question, Mr. Gates, you can tell me and I will
10 rephrase the question.
11 A Isn't that what I just did?
12 Q Saying that you didn't understand the
13 question?
14 A Uh-huh.
15 Q Okay. Let me put another question to
16 you.
17 Did Microsoft, insofar as you are
18 aware, try to get Intuit to agree not to enter into
19 any kind of marketing or promotion agreements with
20 Netscape?
21 A I don't know.
22 Q Did you have discussions with anyone
23 concerning what Microsoft was trying to get from
24 Intuit?
25 A I might have sent e-mail about it at
392 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 some point.
2 Q Do you remember the content of that
3 e-mail?
4 A No.
5 Q Do you remember anything at all about
6 the content of that e-mail?
7 A Well, I don't know that it's an e-mail
8 either. I said I might have sent e-mail. It may
9 have been many e-mails. So no, I don't remember
10 anything beyond the fact that there may have been
11 e-mail about this, and I may have made my views about
12 the subject known.
13 Q Let me ask you to look at a document
14 that has been previously marked as Government Exhibit
15 376.
16 This purports to be an e-mail dated
17 April 17, 1997 from Brad Chase to you and some other
18 people which is forwarding on an e-mail of earlier in
19 the day on April 17 from Mr. Will Poole to Brad
20 Chase. The subject of both e-mails is Intuit Terms
21 Agreed.
22 (The document referred to was marked as
23 Government Exhibit 376 for identification and is
24 attached hereto.)
25 Q BY MR. BOIES: Do you see that?
393 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A Well, it's just a forward, yeah.
2 Q Do you recall receiving this e-mail?
3 A No.
4 Q Do you have any doubt that you received
5 a copy of this e-mail?
6 A No.
7 Q There are --
8 A I don't have any reason to doubt. I
9 don't know that I received the e-mail. I don't have
10 any reason to doubt it. But since I don't remember
11 it --
12 Q Did you ever see this e-mail before?
13 A I don't remember ever seeing it.
14 Q Under the heading "Intuit obligations"
15 it says, "Bundle IE3 (Quicken) and IE4 (other
16 products)."
17 Do you see that?
18 A Uh-huh.
19 Q Were you told in April 1997 that Intuit
20 had agreed to bundle IE3 and IE4 with its products?
21 A I don't remember that specifically.
22 Q Farther down on under "Intuit
23 obligations," there is an obligation that reads,
24 quote,
25 "Not enter into marketing or
394 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 promotion agreements with Other
2 Browser manufacturers for
3 distribution or promotion of Intuit
4 content."
5 Do you see that?
6 A Uh-huh.
7 Q Were you told in words or in substance
8 in or about April of 1997 that Intuit had agreed not
9 to enter into marketing or promotion agreements with
10 other browser manufacturers for distribution or
11 promotion of Intuit content?
12 A I don't remember being told that.
13 Q Do you have any reason to doubt that
14 you were told that?
15 A In the sense that one of the e-mails
16 that may have come into my mailbox might have related
17 to that, I don't -- I don't doubt it. Certainly
18 wasn't something that could have been very
19 significant to me because I don't have a recollection
20 of it.
21 Q The last Intuit obligation that is
22 listed here is, quote,
23 "Create 'differentiated
24 content' area for Intuit Channel that
25 is available only to IE users," close
395 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 quote.
2 Do you see that?
3 A Uh-huh.
4 Q Were you told in words or in substance
5 in or about April of 1997 that Intuit had agreed with
6 Microsoft that Intuit would create a differentiated
7 content area for Intuit's channel that would be
8 available only to IE users?
9 A I don't remember being told that nor do
10 I understand what it means.
11 Q Have you ever had any discussions with
12 anyone within Microsoft about the possibility of
13 content providers creating content area that would
14 only be available to IE users?
15 A I don't -- no. I don't understand
16 that. I mean, it -- if the URL was there, you can
17 get to it.
18 Q So what you're saying is that this
19 obligation that Intuit said to have taken on is an
20 obligation that you don't understand at all what it
21 means; is that what you're telling me?
22 A No. I'm saying these words that are on
23 this piece of paper, I don't understand what they
24 mean.
25 Q Do you understand the concept?
396 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A I don't know what it means.
2 Q Okay.
3 Did you ever ask Mr. Poole what it
4 meant?
5 A Nope.
6 Q Did you ever ask Mr. Chase what it
7 meant?
8 A No.
9 Q Did you ever ask anybody what it meant?
10 A Those words, no.
11 Q Or the concept that is described by
12 those words?
13 A I don't understand those words. So
14 it's hard for me to relate to the concept. I don't
15 understand the words.
16 Q Let me be sure that I understand what
17 you don't understand.
18 Are you telling me that you don't
19 understand what it would mean for Intuit to create a
20 differentiated content area?
21 A That's in quotes.
22 Q Yes. For the Intuit Channel that would
23 be available only to IE users?
24 A I'm not sure what they mean by that.
25 Q Do you have any idea what they mean by
397 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 that?
2 A No. It's confusing to me.
3 Q All right, sir.
4 When did Microsoft enter into an
5 agreement with Intuit to make IE Intuit's default
6 browser?
7 A I don't know the date of our agreement
8 with Intuit.
9 Q Do you know approximately?
10 A Well, before you showed me this e-mail,
11 I would have said, no. Looking in this e-mail it
12 suggests that it was sometime before April 17, 1997.
13 Q Just so you're not misled by the e-mail
14 the e-mail talks about when the terms are agreed, it
15 doesn't say that the agreement has yet been signed;
16 is that correct?
17 A I hadn't thought about that
18 distinction.
19 Q I think the first line you may want to
20 look at it where it says,
21 "We have agreed on all
22 salient terms in our term sheet and
23 are going to contract."
24 A Oh, you're right. You're right. I
25 guess I'd have to get a copy of it to know what date
398 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 it has. I think there was an agreement reached,
2 though.
3 Q Are you aware of any terms in that
4 agreement other than terms that are identified here?
5 A No.
6 Q Let me ask you to look at a document
7 that has been previously marked as Government Exhibit
8 372.
9 This is an e-mail to you from Ben
10 Slivka dated April 14, 1997. And the subject is,
11 quote, "Java review with you," close quote.
12 (The document referred to was marked as
13 Government Exhibit 372 for identification and is
14 attached hereto.)
15 Q BY MR. BOIES: Did you receive this
16 e-mail in or about April of 1997, Mr. Gates?
17 A I don't remember.
18 Q The e-mail begins that the author is
19 working with Paul Maritz to set up a two -- to
20 three-hour review for you on your Java efforts.
21 Do you see that?
22 A On our Java efforts.
23 Q On Microsoft's Java efforts?
24 A No. I think it's Ben Slivka's group.
25 Q And he is a Microsoft group; right?
399 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A Yes. He's part of Microsoft but not
2 all of Microsoft.
3 Q So you would interpret this that he is
4 working with Paul Maritz to set up a two- to
5 three-hour review for you of part of Microsoft's Java
6 efforts but not all of Microsoft's Java efforts; is
7 that what you're saying?
8 A Yeah. The work his group is doing.
9 Q The work his group is doing on Java;
10 right?
11 A Right.
12 Q Okay.
13 And he lists what he describes as some
14 pretty pointed questions that you, Mr. Gates, had
15 about Java.
16 Do you see that?
17 A Well, I'm not sure those are the
18 pointed questions. It says, "I want to make sure I
19 understand your issues/concerns."
20 Q Well, that's actually the last part of
21 a sentence that begins, quote:
22 "When I met with you last,
23 you had a lot of pretty pointed
24 questions about Java, so I want to
25 make sure I understand your
400 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 issues/concerns."
2 That's what the sentence says; correct,
3 sir?
4 A Right.
5 Q And when Mr. Slivka says "I met with
6 you last," he's talking about you, Mr. Gates; correct
7 sir?
8 A Yes.
9 Q And when he says, "You had a lot of
10 pretty pointed questions about Java," he's again
11 talking about you, Mr. Gates; correct?
12 A Right.
13 Q And then he lists what he refers to as
14 a start:
15 "1. What is our business
16 model for Java?
17 "2. How do we wrest control
18 of Java away from Sun?"
19 Do you see that?
20 A Uh-huh.
21 Q Sometime prior to April 14, 1997, had
22 you conveyed to Mr. Slivka that one of your pointed
23 questions about Java was, quote, "How do we wrest
24 control of Java away from Sun?"
25 A I don't think I would have put it that
401 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 way. Certainly was an issue about the popularity of
2 Sun's runtime APIs versus our runtime APIs.
3 Q Is it your testimony that you didn't
4 raise the question of "How do we wrest control of
5 Java away from Sun?" with Mr. Slivka?
6 A I'll say again, I doubt I used words
7 like that. But there certainly was an issue of the
8 popularity of our runtime APIs versus runtime APIs.
9 Q Just so that the record's clear. I'm
10 not asking you about whether there was a question
11 about the popularity of your runtime APIs or their
12 runtime APIs. What I'm asking is whether you told
13 him in words or in substance that you wanted to know
14 how Microsoft could wrest control or get control of
15 Java away from Sun.
16 MR. HEINER: Objection. Asked and
17 answered twice.
18 MR. BOIES: I think he said he didn't
19 remember using those words. What I now want to try
20 to find out is whether he used those words or
21 conveyed that substance.
22 MR. HEINER: And he doesn't remember
23 using those words.
24 MR. BOIES: And I'm asking him whether
25 he conveyed that in words or in substance.
402 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 MR. HEINER: He testified as to
2 substance.
3 MR. BOIES: I don't believe he did.
4 But I'm in any event putting the question to the
5 witness.
6 THE WITNESS: I don't remember anything
7 about "control" as a word or in substance. But there
8 was an issue about the popularity of our runtime APIs
9 versus Sun's runtime APIs.
10 Q BY MR. BOIES: I take it you know
11 Mr. Slivka?
12 A Uh-huh.
13 Q You've got to answer "yes" or "no"
14 audibly so the reporter can take it down.
15 A Yes.
16 Q And you believe him to be a person of
17 competence and integrity?
18 A Yes.
19 Q Do you have any reason to believe that
20 he would have misstated what you told him when you
21 met with him last before April 14, 1997?
22 MR. HEINER: Objection.
23 THE WITNESS: In no way does this
24 purport to be a restatement of things I said to Ben
25 Slivka.
403 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q BY MR. BOIES: Well, Mr. Gates, what
2 this memorandum says is, quote,
3 "When I met with you last,
4 you had a lot of pretty pointed
5 questions about Java, so I want to
6 make sure I understand your issues
7 and concerns."
8 "Here's a start, can you
9 please add any that I'm missing?"
10 And then he lists six, the second of
11 which is, "How do we wrest control of Java away from
12 Sun?"
13 You see that in the exhibit, do you
14 not, sir?
15 A Uh-huh, yes.
16 Q Let me ask you to look at a document
17 that has been previously marked as Government Exhibit
18 373. It's a one-page exhibit and the second item on
19 the page is a message from you to Paul Maritz dated
20 June 16, 1997, on the subject of, quote, "Java
21 schism," close quote.
22 (The document referred to was marked as
23 Government Exhibit 373 for identification and is
24 attached hereto.)
25 Q BY MR. BOIES: Did you send this
404 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 message, Mr. Gates?
2 A I don't remember it. But I don't have
3 any reason to doubt that I did.
4 Q What did you mean by, quote, "Java
5 schism," close quote?
6 A I think the e-mail speaks for itself.
7 Q The e-mail may very well speak for
8 itself. But what I want to know is --
9 A I could have written a mail that says,
10 "A point that is important
11 to me is to have PURE JAVA
12 applications that do a lot HAVE to
13 ship a full runtime instead of being
14 able to count on the runtime being
15 shipped with the operating system,"
16 and so on.
17 Q Maybe my question wasn't clear. What
18 I'm trying to get you to do is to tell me what you
19 meant by the term "Java schism."
20 A It's a heading for this piece of
21 e-mail. The e-mail is the communication, not the
22 heading.
23 Q I understand that, sir. But what I'm
24 asking is: You chose the heading, did you not, sir?
25 A It appears I typed that.
405 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Right. And why did you choose this
2 heading for this memo? What were you meaning to
3 convey by the term "Java schism"?
4 A Exactly what I put into the message.
5 Q Well, sir, what did you mean by
6 "schism"?
7 A It explains that in the message.
8 Q I'm asking you to explain it in your
9 words what you mean by the word "schism."
10 A I'm drawing a distinction between pure
11 Java apps and where they get their runtime bits.
12 Q And is that the schism that you're
13 referring to?
14 A That's what this e-mail is about, and
15 that's -- and I titled it "Java schism" when I wrote
16 that e-mail. And the question is: "How do pure Java
17 applications get their runtime bits?"
18 Q Could you read that answer back,
19 please?
20 (Answer read.)
21 Q BY MR. BOIES: What is on the two sides
22 of the schism, Mr. --
23 A The bits you get from the browser, the
24 bits you get elsewhere. And the mail couldn't be
25 clearer. It's asking about two sources of the bits.
406 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 You can get bits from the browser, you can get bits
2 somewhere else.
3 Q Okay.
4 Now, where else can you get the bits?
5 A They can ship with the application.
6 Q And why was it important to you to have
7 pure Java applications that have the characteristics
8 that you described in here?
9 A I didn't want to have to have the
10 browser get so large that it would have all the
11 runtime bits for all the applications.
12 Q And so where would the bits be?
13 A With the application.
14 Q And what you're saying is that it's
15 important to you that Microsoft develop pure Java
16 applications that have a lot of bits in them so that
17 those bits don't have to be in the browser. Is that
18 the case?
19 A No. It doesn't say anything about
20 Microsoft developing pure Java applications.
21 Q You're right, it doesn't.
22 A And it's clearly not about that.
23 Q What is it about then, sir?
24 A It's about pure Java applications in
25 general.
407 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Did you believe that it was desirable
2 to have as many pure Java applications as possible?
3 A It has nothing to do with this e-mail.
4 The answer is no. But if you think it has something
5 to do with this e-mail, you're -- that's incorrect.
6 Q Okay. I think that it may or may not
7 be productive for you to speculate as to what I
8 think. What I am trying to do is I'm trying to get
9 your testimony about this e-mail and about your views
10 of Java more generally.
11 A I thought so.
12 Q And first let me ask a general
13 question, and that is: Did you believe that from
14 Microsoft's standpoint it was desirable to have as
15 many pure Java applications as possible?
16 A We weren't focused on that as a goal,
17 no.
18 Q In fact, is it fair to say that you
19 preferred fewer pure Java applications to more pure
20 Java applications?
21 A We preferred more applications that
22 took advantage of our APIs, and so we worked with
23 ISVs to maximize the number that took advantage of
24 our APIs.
25 Q And your APIs were not pure Java APIs;
408 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 correct?
2 A No. Some were, and some weren't.
3 Q Yes, sir, some were, and some weren't.
4 But the APIs that you wanted people to
5 use were APIs that were not pure Java APIs; correct,
6 sir?
7 A No. We were glad to have people use
8 both.
9 Q Were you indifferent as to whether they
10 used your pure Java APIs or your proprietary APIs?
11 MR. HEINER: Objection.
12 THE WITNESS: You've introduced the
13 word proprietary, and that completely changes the
14 question. So help me out, what do you want to know?
15 Q BY MR. BOIES: Is the term "proprietary
16 API" a term that you're familiar with, sir?
17 A I don't know what you mean by it.
18 Q Is it a term you're familiar with in
19 your business?
20 A I really don't know what you mean. You
21 mean an API that you have a patent on?
22 Q Mr. Gates, is the term "proprietary
23 API" a term that is commonly used in your business?
24 A Let me give you --
25 Q All I'm trying to do --
409 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A -- the common meanings that those words
2 could have. And then you can pick one of them, and
3 ask me a question about it.
4 Q No. All I need --
5 A Just -- you want me to define
6 "proprietary API" or not?
7 Q No, I don't want you to define
8 "proprietary API." I didn't ask you to define
9 proprietary API. I asked you a simple question
10 whether the term "proprietary API" was commonly used
11 in your business.
12 Now, I'm prepared to sit here as long
13 as you want to to answer questions that I haven't
14 asked. But I have a certain number of questions that
15 I'm going to ask at the end of these other answers.
16 Now, this is a simple question. You can say "yes,"
17 "no," or "It is used in lots of different ways." But
18 then I can choose what to follow up on. Or you can
19 simply make whatever statements you want, and I'll go
20 back to my question afterwards.
21 MR. HEINER: The witness is simply
22 trying to help you through a difficult subject
23 matter. That's all that's happening. It's not
24 offensive.
25 MR. BOIES: It is not offensive. But
410 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 all I am saying is with due respect, this witness's
2 efforts do not help me clarify difficult subjects.
3 MR. HEINER: They could help. But go
4 ahead and read the question one more time, or state
5 it again and he can answer it.
6 MR. BOIES: Okay.
7 Q Is the term "proprietary API" a term
8 that is commonly used in your business?
9 A I don't know how common it is. It has
10 many different meanings.
11 Q Is it a term that you have used in your
12 business?
13 A Sometimes.
14 Q Okay. Now, is it fair to say that when
15 you use the term "proprietary APIs" sometimes you
16 mean one thing and sometimes you mean something else?
17 A That's right.
18 Q Would you give me the different
19 meanings that you sometimes ascribe to the term
20 "proprietary APIs" when you use that term?
21 A It can mean an API that only happens to
22 be available from one company. It can mean an API
23 that for some reason related to intellectual property
24 can only be available from one company, and, of
25 course, that's never a black and white thing. It can
411 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 mean an API that somebody's chosen not to take to a
2 standards body. Those are three different things you
3 might mean by it.
4 Q I just want to be sure that the answer
5 is clear.
6 I'm not asking what I might mean by it
7 or what a person might mean by it. What I'm trying
8 to do is get you to tell me meanings that you ascribe
9 to that term when you use it.
10 A I've used all three of those.
11 Q Okay.
12 Are there other meanings that you have
13 ascribed to the term "proprietary API" in your use of
14 that term?
15 A Not that I can think of right now.
16 Q Okay.
17 Now, with respect to the API in
18 Windows, there are both Java APIs and non-Java APIs;
19 is that fair?
20 A I hate to tell you this, but what you
21 mean by "Java" there is subject to massive ambiguity.
22 Q Let me try to put the question this
23 way: In Windows there are pure Java APIs, there are
24 impure Java APIs, and there are APIs that have
25 nothing to do with Java; is that fair?
412 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 MR. HEINER: Objection. I guess at
2 this point I'll have to say that if we're going to
3 talk about pure Java APIs, you'll have to take the
4 time to go down that path as well, which I know
5 you're happy to do of defining what that term means.
6 MR. BOIES: I mean what the witness
7 meant when he wrote this e-mail on June 16, 1997.
8 MR. HEINER: Fine.
9 THE WITNESS: I don't see anything
10 about APIs.
11 Q BY MR. BOIES: Do you see "PURE
12 JAVA" --
13 A Yeah. But I don't see APIs.
14 Q -- in capital letters?
15 And I can spend as much time as we have
16 to on this. I think it shouldn't be necessary, but
17 if we have to, we will.
18 MR. HEINER: Mr. Boies, the difficulty
19 is -- I don't mean to be at all rude, but it's
20 partly -- you know, it's partly the complexity of the
21 subject matter and the difficulty you're having in
22 posing these questions. Java is a complex subject.
23 MR. BOIES: Java is a complex subject.
24 But when somebody talks about pure Java APIs, I don't
25 think that that is something that the witness can't
413 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 answer.
2 THE WITNESS: But you said that the
3 e-mail talks about pure Java API. And it doesn't.
4 MR. BOIES: No. I said pure Java.
5 THE WITNESS: No. You said APIs.
6 Q BY MR. BOIES: Mr. Gates, let me ask a
7 question. If you can't answer the question, you
8 can't answer the question.
9 Does Windows include pure Java APIs?
10 A There's a -- in some versions of
11 Windows there are some Java runtime APIs which at one
12 time Sun labeled as pure Java APIs.
13 Subsequently they changed in a way that
14 was not upwards compatible, so it's actually kind of
15 confusing.
16 Q Does Windows have any APIs that you
17 would consider to be pure Java APIs?
18 A Today?
19 Q Yes.
20 A Yeah. I guess the AWT 1.1 stuff you
21 might think of that way.
22 Q Anything else?
23 A I don't know what you mean "anything
24 else." Are we enumerating?
25 Q Any other API in Windows that you would
414 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 consider to be pure Java APIs, Mr. Gates?
2 A I know there's more. I don't know the
3 technical names for them.
4 Q And does Microsoft have a version of
5 Java that is not what you refer to in your memo as
6 pure Java?
7 A I have no idea what you mean by that
8 question.
9 Q Okay.
10 Does Windows include APIs that are
11 written in what is described as a form or version of
12 Java but not pure Java?
13 A Are you talking about the language?
14 Q If you don't understand the question,
15 Mr. Gates, you can simply say you don't understand
16 the question.
17 A Okay. I'm sorry. I don't understand
18 the question.
19 Q Good. Okay. That's what I'm trying to
20 do. What I'm trying to do is get on the record what
21 you say you understand and what you say you don't
22 understand.
23 MR. HEINER: Any time that the witness
24 clearly indicates he doesn't understand the question
25 but doesn't preface it with the words "I don't
415 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 understand the question." If you want that
2 convention --
3 MR. BOIES: I do, because I don't want
4 speeches as to what the witness does think if he
5 simply doesn't understand the question.
6 THE WITNESS: No. But I was pointing
7 out to you the part of the question that I didn't
8 understand because it was ambiguous.
9 MR. BOIES: Would you read the answer
10 back, please, or the statement.
11 (The following answer was read:
12 "A Are you talking about the language?")
13 MR. BOIES: No. I'm not talking about
14 the language if by "the language," you mean all the
15 things that you said about the Java language when we
16 were talking about Java yesterday. Now, let me go
17 back to me asking the questions, if I can.
18 Q As part of an effort to take control of
19 Java away from Sun in the terms used by Mr. Slivka in
20 his memo with Mr. Gates -- to you dated April 14,
21 1997, did Microsoft make an effort to get people to
22 use a version of Java APIs that was not pure Java
23 APIs?
24 MR. HEINER: Objection.
25 THE WITNESS: That's a very compound --
416 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 I don't understand the question.
2 Q BY MR. BOIES: Okay.
3 In an attempt to, in Mr. Slivka's
4 words, wrest control of Java away from Sun, did
5 Microsoft make an effort to get programmers to write
6 to APIs that could be used to run applications on
7 Windows but not on all other operating systems to
8 which a pure Java written program could be run?
9 A I wouldn't say that was part of
10 anything to do with controlling Java. But we do
11 promote the use of the unique Windows APIs.
12 Q And with respect to the unique Windows
13 APIs, are some of those APIs APIs that Microsoft
14 describes as Java APIs or has in the past?
15 A All of our APIs can be called from
16 Java. So now I don't know what you mean by a Java
17 API. Usually somebody would mean something that you
18 can only call from Java or something you can call
19 from Java whether you can call it from other
20 languages or not.
21 Our APIs we make available to a broad
22 set of languages including Java but others as well.
23 Q Mr. Gates, you've been sued by Sun
24 Microsystems over Java, have you not?
25 A There's a lawsuit with Sun.
417 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Well, there's a lawsuit with Sun, and
2 it's a lawsuit with Sun relating to the use of Java;
3 right?
4 A It relates to a very specific contract
5 that we have with Sun.
6 Q And does that very specific contract
7 with Sun relate to Java?
8 A It's a license to various Sun
9 technologies related to Java.
10 Q Now, you're familiar with that lawsuit,
11 are you not, sir?
12 A Not very.
13 Q Not very?
14 Do you know what the contentions in
15 that lawsuit are?
16 A No.
17 Q Never tried to find out? Is that your
18 testimony?
19 A I haven't read the complaint, if that's
20 your question.
21 Q That's not my question.
22 My question is whether you've ever
23 tried to find out the substance of the allegations
24 about Java that Sun is making in its lawsuit against
25 Microsoft.
418 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A My understanding of their allegations
2 is very limited.
3 Q What is your understanding of their
4 allegations?
5 A I haven't read the contract between
6 Microsoft and Sun.
7 Q I'm asking you about the allegations in
8 the complaint, not whether you've read the contract.
9 I'm asking you for your understanding, which I know
10 you've already said is very limited. But I'm asking
11 for your understanding of what allegations Sun makes
12 in its claim against Microsoft.
13 A I think there's some dispute about they
14 were supposed to make the test cases public and
15 upwards compatible, and they didn't make them public,
16 and they weren't upwards compatible. And that
17 relates to the contract that I haven't read.
18 Q And that's what you think they allege
19 in the complaint?
20 A Well, that -- those are certain things
21 that they were required to do, I believe.
22 Q My question is not about what you
23 believe they were required to do, Mr. Gates. My
24 question is: What is your understanding about the
25 complaint that they make about what you did, about
419 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 what Microsoft did?
2 Do you understand the question?
3 A You're asking me to summarize their
4 lawsuit?
5 Q I'm asking you to tell me what you know
6 about the claims they make in that lawsuit. You said
7 you know something about it, but it's very limited.
8 All I'm trying to do is get you to tell me what it is
9 you know about the claims they make in their lawsuit.
10 A I think they want us to ship JNI.
11 Q Is that all you know about their
12 claims?
13 A I think there was something about a
14 trademark.
15 Q What about the trademark?
16 A Whether we could use the trademark.
17 I'm not sure.
18 Q Don't you know, Mr. Gates, one of the
19 allegations that they make is that you're taking
20 their trademark and applying it to things that it
21 shouldn't be applied to?
22 A Yeah. I think there's a trademark
23 issue. I'm not sure what they're saying about the
24 trademark.
25 Q Do you know anything that they're
420 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 saying about the trademark according to your present
2 testimony?
3 A I know there's a dispute about the
4 trademark.
5 Q Well, don't you know that one of the
6 things they're alleging is that Microsoft is taking
7 their trademark and applying it to things that
8 shouldn't be applied to according to them?
9 A I'm not sure that's right.
10 Q You're not sure?
11 A Because I don't think we used their
12 trademark, I'm not sure. I'm kind of confused about
13 that. I've never seen us using their trademark, so
14 I'm a little confused about how that relates to any
15 dispute with Sun.
16 Q Did you ever try to find that out?
17 A What?
18 Q What the claims were more than your
19 present knowledge.
20 A I read something that was on our web
21 site about four days ago.
22 Q About the Sun lawsuit?
23 A Yeah. Bob Muglia had some statements.
24 Q Other than that, did you ever try to
25 find out what Microsoft is being charged with, what
421 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 they're alleged to have done wrong?
2 A I've had discussions with Maritz
3 saying: Do I need to learn about this lawsuit? Do I
4 need to spend a lot of time on it?
5 Q What did he say?
6 A He said, no, he's focused on that and I
7 can focus on other things.
8 Q Is one of the things that you're
9 focused on trying, in Mr. Slivka's words, to wrest
10 control or get control, if wrest is a word that you
11 don't like, of Java away from Sun?
12 A No.
13 Q How did you think Microsoft could get
14 control of Java away from Sun?
15 MR. HEINER: Objection.
16 THE WITNESS: I honestly don't know
17 what you mean by "control of Java." I know those
18 words are in that e-mail from Mr. Slivka. But when
19 you're asking me the question, I don't know what you
20 mean "control of Java."
21 Q BY MR. BOIES: Is it your testimony,
22 Mr. Gates, that as you sit here today under oath you
23 have no idea what Mr. Slivka meant when he said that
24 one of the pointed questions that you had raised with
25 him was how to get control of Java away from Sun?
422 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A I told you, I think it related to our
2 attempt to make our runtime APIs the most popular
3 runtime APIs.
4 Q And not the Java APIs from Sun; is that
5 what you're saying?
6 A Well, let's not label the APIs, not the
7 unique ones that Sun was promoting.
8 Q When you say the unique ones that Sun
9 was promoting, what were the unique ones that Sun was
10 promoting called?
11 A I'm not sure what they're called. I
12 think AWT 1.2 maybe or JDK 1.2.
13 Q And is it your best testimony that
14 that's what you think this would have meant back in
15 April of 1997, sir?
16 A That what meant?
17 Q Getting control of Java away from Sun.
18 The thing we've been talking about here.
19 A Is that the same as "wrest control"?
20 You keep reading me these words from the e-mail.
21 Q Well, I'm trying to get away from the
22 word "rest" because you say you don't remember that
23 exact word. So I'm trying to use a word that's more
24 neutral like get or obtain control.
25 A And I've told you, I can't understand
423 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 what's meant by "control" there. I know that we're
2 trying to make our APIs popular with developers.
3 Q How does making your APIs popular with
4 developers relate to obtaining control of Java, if at
5 all?
6 A I don't know what it means to control
7 Java. How can somebody control Java? What does that
8 mean?
9 Q Is it your testimony that you have no
10 idea what that means?
11 A To control Java? I don't think anyone
12 can control Java. It's like saying controlling Basic
13 or COBOL.
14 Q Do you really mean that, sir?
15 A Yes.
16 Q And I'm going to press this just
17 another 30 seconds and then I will stop. But I
18 really do want to be sure that I have given you a
19 full and fair opportunity.
20 Is it your testimony that as you sit
21 here today under oath that you have no idea what is
22 meant by control of Java as used in this e-mail to
23 you by Mr. Slivka?
24 A I've said several times I think he must
25 be referring to our effort to make our APIs the most
424 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 popular APIs. But that wouldn't give us control of
2 Java. So I'm having a hard time relating it to these
3 specific words.
4 Q Well, without relating it to the
5 specific words, how would getting people to use your
6 APIs get control of Java? Why do you relate those
7 two in your mind?
8 A Because he probably means the Java
9 runtime, not Java.
10 Q Let's say he means the Java runtime.
11 A Then he's talking about the competition
12 of APIs.
13 Q Is it fair to say, Mr. Gates, that you
14 interpret this as how does Microsoft get, obtain,
15 control of Java runtime? Is that what you're saying?
16 A I think that's the most likely
17 explanation of what he meant. I still don't
18 understand the word "control" there because it's not
19 the word I'd use.
20 Q Well, according to Mr. Slivka it is the
21 word you used, is it not, sir?
22 MR. HEINER: Objection.
23 THE WITNESS: We've already been
24 through that.
25 Q BY MR. BOIES: But looking at this
425 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 doesn't refresh your recollection about having used
2 that word?
3 A It does not.
4 Q Have you ever said in words or in
5 substance to anyone that you wanted to obtain control
6 over Java or under -- over Java runtimes?
7 A I don't remember using those words.
8 Q Do you remember conveying that concept
9 or conveying that substance?
10 A If by "that concept" you mean conveying
11 the idea that we wanted our runtime APIs to be the
12 most popular, then the answer is yes.
13 Q Why did you want your runtime APIs to
14 be the most popular?
15 A By having our runtime APIs be the most
16 popular it means that people are more likely to
17 license Windows because there's applications that
18 take advantage of the unique innovations that are in
19 the Windows product.
20 Q Why does the fact that their
21 applications that take advantage of the unique APIs
22 that are in the Windows product make people more
23 likely to license Windows?
24 A Because it shows off the unique
25 innovations of Windows.
426 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q How does it show off the unique
2 innovations of Windows?
3 A Well, let's say, for example, they call
4 our tasking APIs, then it shows off the unique way
5 that we've done tasking. Let's say they call our
6 clipboard APIs, then it shows off the advances we've
7 made in data exchange which are very advanced.
8 Q Is it your testimony that trying to get
9 applications writers to write to Windows' own APIs
10 was something that you were trying to do only for the
11 reason that you've identified?
12 MR. HEINER: May I have that read back,
13 please?
14 (Question read.)
15 THE WITNESS: I think there's
16 additional reasons as well.
17 Q BY MR. BOIES: Isn't it a fact,
18 Mr. Gates, that one of the reasons that you were
19 trying -- that Microsoft was trying to get control
20 over the Java runtimes or Java, as it's described in
21 Mr. Slivka's memorandum, was to prevent Java or Java
22 runtimes from supporting competition with Windows?
23 MR. HEINER: Objection.
24 THE WITNESS: I don't know what you
25 mean by "control." That means I don't understand the
427 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 question.
2 Q BY MR. BOIES: Okay.
3 Did you ever participate in any
4 discussions within Microsoft as to the extent of
5 which Java or Java runtimes posed a threat to
6 Microsoft's position with respect to the Windows
7 platform?
8 A Yeah. I've already told you that there
9 came a point where we viewed Sun's unique Java
10 runtime APIs as a -- as a part of the competitive
11 environment, a competitor.
12 Q Okay.
13 Now, why were the Java APIs from Sun a
14 competitor?
15 A Well, if people just used the least
16 common denominator APIs, then they don't show off the
17 innovations that we're doing in Windows, and it makes
18 it less attractive to people to license Windows or
19 update Windows.
20 Q Now, what I'm trying to do -- and you
21 may think you've answered this question, but I don't
22 think the record makes it clear in any event.
23 What I'm trying to do is distinguish
24 between that reason which you've given me a couple
25 times and any other reason that may exist.
428 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Do you understand what I'm asking?
2 A No.
3 Q Okay. Let me try it again.
4 Isn't it true, Mr. Gates, that in
5 addition to whatever desire you may have had to show
6 off your Windows capabilities that you say you had,
7 that one of the things that was going on here was
8 your trying, Microsoft's trying, to prevent Java from
9 getting wide enough distribution so that it could
10 support applications programming for platforms other
11 than Windows?
12 A No.
13 Q Not at all, sir?
14 A There's no limitation of distribution.
15 Q Didn't ask whether there was any
16 limitation of distribution. I asked you whether in
17 any way the desire to prevent Java from developing
18 applications that could be used on platforms other
19 than Windows motivated what Microsoft was doing in
20 connection with Java.
21 MR. HEINER: Objection. That's a
22 distinctly different question.
23 THE WITNESS: What does it mean Java
24 developing applications?
25 Q BY MR. BOIES: I actually didn't recall
429 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 that I used that phrase.
2 THE WITNESS: Can you read me the
3 question?
4 (The following question was read:
5 "Q I asked you whether in
6 any way the desire to prevent Java
7 from developing applications that
8 could be used on platforms other than
9 Windows motivated what Microsoft was
10 doing in connection with Java.")
11 MR. BOIES: Can you answer that
12 question, Mr. Gates. If you can't, I'll rephrase it.
13 But if you can answer, I'd like an answer.
14 THE WITNESS: I don't know what you
15 mean "Java developing applications."
16 Q BY MR. BOIES: Isn't it a fact,
17 Mr. Gates, that in addition to whatever other reasons
18 you say you had for what you did with Java and
19 Windows APIs, part of what you were trying to do was
20 to prevent Java from having a wide enough
21 distribution so that it could support programs that
22 could be used on platforms other than Windows?
23 A We had no way of preventing Java from
24 being used on other platforms. It is used on other
25 platforms.
430 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q That wasn't my question, sir. My
2 question is whether or not part of what you and
3 Microsoft was trying to do was to limit the
4 distribution of Java sufficiently so that you could
5 thereby limit or reduce the extent to which
6 applications were written that could be used on
7 platforms other than Windows.
8 A No. In fact, we sell the most popular
9 Java tools in the market.
10 Q It is your testimony, then, sitting
11 here, that Microsoft was not at all motivated by a
12 desire to limit the extent to which Java could be
13 used to develop applications programming that could
14 be used on platforms other than Microsoft's Windows?
15 Is that your testimony?
16 A Yes.
17 Q All right, sir.
18 Was your concern over Netscape's
19 browser at all related to the fact that Netscape's
20 browser was viewed within Microsoft as a method of
21 distributing Java?
22 MR. HEINER: Objection. At the risk of
23 belaboring the record.
24 Would you care to state the question
25 more precisely and perhaps develop a better record?
431 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Or do you want to stick with the question you have?
2 MR. BOIES: If the witness tells me he
3 can't understand that question, that's an answer. If
4 he can understand the question, I'd like to have an
5 answer.
6 MR. HEINER: In addition to that
7 there's an objection based on that, so that's a
8 second consideration.
9 THE WITNESS: Well, you have to read
10 the question again. Sorry.
11 (The following question was read:
12 "Q Was your concern over
13 Netscape's browser at all related to
14 the fact that Netscape's browser was
15 viewed within Microsoft as a method
16 of distributing Java?")
17 MR. HEINER: Another objection.
18 Foundation.
19 MR. BOIES: Okay. I think the
20 foundation objection may be well-taken. Let me ask
21 the foundation question.
22 Q Did Microsoft believe that Netscape's
23 browser was a means of distributing Java APIs?
24 A Well, Netscape had some APIs in its
25 browser. I'm not sure if you would refer to them as
432 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Java APIs or not.
2 Q It's not a question whether I would
3 refer to them that way or not, Mr. Gates. What I'm
4 asking you is what you and Microsoft believe.
5 And my question is: Did you and others
6 at Microsoft believe that Netscape's browser was a
7 method for distributing Java APIs?
8 A There were APIs in the Netscape
9 browser. I don't think they were strictly Java APIs
10 or even in a direct sense specifically.
11 Q Have you completed your answer, sir?
12 A Uh-huh.
13 MR. BOIES: Can I have the question
14 read back again?
15 (The following question was read:
16 "Q It's not a question
17 whether I would refer to them that
18 way or not, Mr. Gates. What I'm
19 asking you is what you and Microsoft
20 believe.
21 "And my question is: Did
22 you and others at Microsoft believe
23 that Netscape's browser was a method
24 for distributing Java APIs?")
25 Q BY MR. BOIES: Can you tell me that,
433 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 sir?
2 A There were APIs in Netscape browser
3 some of which under some definition of Java APIs
4 you'd call Java APIs.
5 Q And was there concern within Microsoft
6 that the distribution of these things that you say
7 could be called Java APIs would adversely affect
8 Microsoft?
9 A Our concern is always to get people to
10 develop Windows applications. And to the degree that
11 there's other APIs people to develop to, there's some
12 competition for the attention of developers and
13 focusing on those APIs. But that doesn't relate to
14 distribution.
15 MR. BOIES: Can I have my question read
16 back again, please?
17 (The following question was read:
18 "Q And was there concern
19 within Microsoft that the
20 distribution of these things that you
21 say could be called Java APIs would
22 adversely affect Microsoft?")
23 Q BY MR. BOIES: Could I have an answer
24 to that question, please, sir?
25 A No, not the distribution.
434 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Let me ask you to look at a document
2 that has been previously marked as Government Exhibit
3 349. The first message in this exhibit is an e-mail
4 from Paul Maritz to you and a number of other people
5 dated July 14, 1997; correct, sir?
6 A That's what it appears to be, yes.
7 Q Did you receive this e-mail, sir?
8 A I don't remember it. But I don't have
9 any reason to doubt that I did.
10 Q Mr. Maritz writes to you in the third
11 sentence, quote,
12 "If we look further at
13 Java/JFC being our major threat, then
14 Netscape is the major distribution
15 vehicle."
16 Do you see that, sir?
17 A Uh-huh.
18 Q Do you recall Mr. Maritz telling you in
19 words or in substance that Netscape was the major
20 distribution vehicle for the Java/JFC threat to
21 Microsoft?
22 A No.
23 Q Did you believe in July of 1997 that
24 Java/JFC was a major threat to Microsoft as
25 Mr. Maritz writes here?
435 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A It was a significant issue for his
2 group in terms of how ISVs would choose to focus
3 their development in the future.
4 Q Did you believe in July of 1997 that
5 Java/JFC was a major threat to Microsoft?
6 A In the form that it existed as of that
7 day, maybe not. But if we looked at how it might be
8 evolved in the future, we did think of it as
9 something that competed with us for the attention of
10 ISVs in terms of whether or not they would take
11 advantage of the advanced features of Windows.
12 Q Do you have any understanding as to
13 what Mr. Maritz meant when he wrote to you about
14 Java/JFC being a major threat to Microsoft?
15 A Yeah. I just answered that.
16 Q What did you understand Mr. Maritz to
17 mean when he says Java/JFC was Microsoft's major
18 threat?
19 A I just answered that.
20 Q You'll have to give me an answer,
21 Mr. Gates, because if you did answer it, it's not an
22 answer that I can understand how it applies to the
23 particular question I'm asking.
24 A I said we looked at how the various
25 runtime APIs which was always confusing, you know,
436 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 where they were going or what they were doing. And
2 "JFC" is just a term for some of those, how they
3 might evolve in a way that would take away the focus
4 of developers in terms of writing applications that
5 would take unique advantage of Windows features.
6 Q I understand that you say that that was
7 an issue for you. Why was that a major threat to
8 Microsoft, if you have any understanding?
9 A Well, if people stopped writing
10 applications that took advantage of Windows runtime
11 APIs, that would mean that users wouldn't have access
12 to the innovative features that we were putting into
13 Windows.
14 Q Why was that a major threat to
15 Microsoft?
16 A If ISVs weren't writing applications to
17 take unique advantage of Windows, then it wouldn't
18 show off the Windows innovation and so users wouldn't
19 have much reason to update Windows or to license any
20 new versions of Windows.
21 Q You referred to JFC in a couple answers
22 ago and, of course, that's here in the memo. What
23 does "JFC" stand for as you understand it?
24 A I was always a little confused about
25 that, and it changed over time. It stands for Java
437 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Foundation Classes.
2 Q Mr. Maritz writes here that Netscape is
3 the major distribution vehicle for Java and Java
4 Foundation Classes.
5 Do you see that?
6 A That's at the end of that sentence?
7 Q Yes.
8 A Uh-huh.
9 Q Do you see that?
10 A Yes.
11 Q Now, in a prior answer you said you
12 didn't understand how the browser was a distribution
13 vehicle. Does this refresh your recollection that at
14 least within Microsoft in July of 1997 Netscape was
15 viewed as the major distribution vehicle for Java?
16 A Not for Java. And in my view, the
17 browser wasn't a key distribution channel. Maritz
18 may or may not have agreed with that. But you can
19 always ship the runtime with the applications.
20 Q Mr. Maritz here says, "Netscape is the
21 major distribution vehicle."
22 Now, it's clear to you, is it not, sir,
23 that he means the major distribution vehicle for Java
24 and Java Foundation Classes?
25 A He doesn't mean for Java.
438 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Well, sir, he says --
2 A I told you many times about the use of
3 the word "Java." And I'm not sure you heard me.
4 When people use the word "Java," they don't mean just
5 Java.
6 Q So when Mr. Maritz here used the word
7 "Java," in this e-mail that you say you don't recall
8 receiving, you're telling me that he meant something
9 other than just Java?
10 A He -- I bet he meant some runtime APIs,
11 not Java.
12 Q Okay.
13 Let's assume that you're right, let's
14 assume that when he talks about Java he means Java
15 runtime APIs. Would you then agree that what he is
16 saying here is that Netscape is the major
17 distribution vehicle for Java runtime APIs and Java
18 Foundation Classes?
19 A That appears to be what he's saying in
20 this e-mail.
21 Q And what was Mr. Maritz's position in
22 July of 1997?
23 MR. HEINER: Asked and answered too
24 many times.
25 THE WITNESS: Yeah. I've answered this
439 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 three times.
2 MR. BOIES: I'm not sure you did as to
3 this particular point in time. And one of the things
4 that you have told me is that the titles changed.
5 And so one of the things I want to be sure the record
6 is clear on is what Mr. Maritz's position was as of
7 the time of this key document.
8 MR. HEINER: You can cut and paste the
9 transcript any way you want in your briefs and in
10 your opening and closing argument. The witness has
11 testified as to his title many times.
12 Q BY MR. BOIES: Mr. Gates, what was
13 Mr. Maritz's title on July 14, 1997?
14 A I think group vice president.
15 Q What was he group vice president of?
16 A I don't know what the title would have
17 said after that. But he managed the group that
18 contained all of our Windows activities.
19 Q Was he group vice president for
20 Platforms?
21 A I'm not sure. I'm sure if it contained
22 the word "Platforms," it didn't just say Platforms,
23 because he's got Office and some other things also.
24 Q But within his responsibilities would
25 have been Windows?
440 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A That's right.
2 Q Let me ask you to look at a document
3 that has been marked as Government Exhibit 374. This
4 is an e-mail to you from Tod Nielsen dated August 25,
5 1997, with copies to Brad Chase.
6 (The document referred to was marked as
7 Government Exhibit 374 for identification and is
8 attached hereto.)
9 Q BY MR. BOIES: Did you receive this
10 e-mail, sir?
11 A I don't remember receiving it. But I
12 don't have any reason to doubt that I did.
13 Q Let me ask you to look at the seventh
14 paragraph down. That's the third paragraph from the
15 bottom, the last sentence. That says, quote,
16 "So, we are just proactively
17 trying to put obstacles in Sun's path
18 and get anyone that wants to write in
19 Java to use J/Direct and target
20 Windows directly," close quote.
21 Do you see that, sir?
22 A Uh-huh.
23 Q Do you recall being told in or about
24 August of 1997 that Microsoft was trying to put
25 obstacles in Sun's path and get anyone that wants to
441 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 write in Java to use J/Direct and target Windows
2 directly?
3 A No.
4 Q Do you know why Microsoft was trying to
5 put, quote, "obstacles in Sun's path," close quote?
6 A I don't know what that means.
7 Q Do you know why Microsoft was trying to
8 get anyone that wants to write in Java to use
9 J/Direct?
10 A Yes.
11 Q Why was that?
12 A Because J/Direct allows you to make
13 calls that show off unique innovations in Windows and
14 make -- therefore, make Windows more attractive.
15 Q Was there any reason other than that
16 that Microsoft wanted to get anyone that wants to
17 write in Java to use J/Direct?
18 A Yes.
19 Q What?
20 A Well, there's a benefit to us if people
21 are showing off Windows, and it increases Windows
22 popularity. That helps us with the other
23 applications we write for Windows as well including
24 Microsoft Office.
25 Q How is that so?
442 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A Because Microsoft Office is targeted to
2 Windows, we get a benefit that goes even beyond
3 increased sales of Windows if we manage to popularize
4 Windows.
5 Q Why is that?
6 A Because they can buy Office.
7 Q They can buy Office and use it on the
8 Mac, too, can't they, since you didn't cancel Mac
9 Office?
10 A We have a much wider set of
11 applications available for the Windows platform than
12 any other platform. And we have more frequent
13 updates of products like Office on the Windows
14 platform. It's a more powerful version, the Windows
15 version, and it -- therefore, our revenue per unit is
16 somewhat higher.
17 Q You mean the version of Office for
18 Windows is more powerful than the version of Office
19 for Mac? Is that what you're saying?
20 A Yes. We have Office Pro.
21 Q What is J/Direct?
22 A J/Direct is a way of allowing Java
23 language code to call native OS functionality. It's
24 a fairly clever thing that we have done. And others
25 now use that term to refer to it when they let their
443 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 OS functionality show through as well.
2 Q You have referred to Java runtimes.
3 Are there J/Direct runtimes?
4 A There's a thunk, but it's -- I don't
5 know if you would call it a runtime or not. It's a
6 thunk.
7 Q Would you define for me what the
8 difference is, in your mind, between a thunk and a
9 runtime?
10 A A thunk is a small piece of runtime
11 that remaps parameters and calling conventions in
12 such a way to be able to pass along an API call to
13 another piece of runtime.
14 Q Does -- or I should say, when was
15 J/Direct developed by Microsoft?
16 A I'm not sure.
17 Q Approximately?
18 A I don't -- I don't know. I mean --
19 Q Why was J/Direct developed by
20 Microsoft?
21 A To make is easy for people who choose
22 the Java language to call the unique runtime features
23 in various operating systems including Windows.
24 Q Why do you want people to write in
25 J/Direct as opposed to Java?
444 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A They are writing in Java. You only use
2 J/Direct if you write in Java.
3 Q Well, what Mr. Nielsen says is that
4 Microsoft is trying to get anyone that wants to write
5 in Java to use J/Direct.
6 Do you see that?
7 A That's right. And that means writing
8 in Java.
9 Q And why do you want to get anyone who
10 wants to write in Java to use J/Direct?
11 A Because that gives them a way of
12 calling unique Windows APIs that allow us to show off
13 the innovative features in Windows.
14 Q Couldn't you do that by having them
15 simply write in Java and you providing the thunk
16 separately?
17 A The name of the thunk is J/Direct. I
18 guess we could have another thunk and call it
19 something other than J/Direct, and that would be
20 another way that they could do it. But we didn't
21 choose to do it twice.
22 Q No, you didn't choose to do it twice.
23 That's not my question, Mr. Gates.
24 My question is why you were trying to
25 get program developers, independent programming
445 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 people, to use J/Direct. Why were you trying to get
2 them to do that?
3 MR. HEINER: Certainly asked and
4 answered.
5 THE WITNESS: Because it allows them to
6 get at the unique API functionality that's in the
7 Windows product and show off the innovations that we
8 do there.
9 Q BY MR. BOIES: But you didn't have to?
10 A Tell me some other way.
11 Q Well, I'm asking you. If you tell me
12 that that's what you say is the only way that you
13 could think of for them to do it, that's your
14 testimony. I don't get to testify here. If I did,
15 there would have been a lot of things I would have
16 said along the way. But since I don't get to
17 testify, all I get to do is ask you questions.
18 And my question to you is whether there
19 was a way, that you were aware of at the time, to let
20 people see all of what you refer to as the
21 functionality of Windows without getting people to
22 write to what you refer to here to use J/Direct if
23 they wanted to write in Java.
24 A J/Direct is exactly the work we did to
25 make it possible and reasonable for people writing in
446 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Java to call the unique Windows APIs.
2 Q Have you finished your answer?
3 A Yes.
4 Q Okay.
5 Now, were you aware of other ways of
6 accomplishing the same result that you considered and
7 rejected at the time?
8 A What time is that?
9 Q The time that you developed J/Direct.
10 A We don't know what that time is.
11 Q Well, you may not know the exact year.
12 But do you know that when -- were you aware when
13 J/Direct was being developed within Microsoft? Were
14 you aware of it at the time?
15 A I'm not sure.
16 Q Did you know it was being developed?
17 A I'm not sure.
18 Q Did you have any discussions about the
19 development of J/Direct?
20 A I was not involved in the design of
21 J/Direct.
22 Q I'm not asking you whether you were
23 involved in the design of J/Direct. I'm asking you
24 whether you were aware at the time that J/Direct was
25 being developed that it was being developed?
447 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A I'm not sure.
2 Q Did you ever have any discussions with
3 anyone about the development of J/Direct at or about
4 the time it was being developed?
5 A I don't think so.
6 Q At the time that J/Direct was being
7 developed, did you know that people were trying to
8 develop J/Direct?
9 A It's just a thunk.
10 Q My question is: Did you know that they
11 were trying to develop this thunk?
12 A I doubt it.
13 Q Did you participate at all in any
14 discussions as to what alternatives there were to the
15 development of J/Direct?
16 A Before it was developed?
17 Q Let's start with before it was
18 developed.
19 A No, I don't think so.
20 Q What about during the time it was being
21 developed?
22 A I don't think so.
23 Q How about after it was developed?
24 A I don't think so.
25 MR. HEINER: We should take a break
448 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 soon.
2 MR. BOIES: Okay.
3 MR. HEINER: Okay.
4 THE VIDEOGRAPHER: The time is
5 2:02 P.M. We're going off the record. This is the
6 end of Tape 3 of the videotaped deposition of Bill
7 Gates.
8 (Recess.)
9 THE VIDEOGRAPHER: The time is 2:16.
10 We're going back on the record. This is Tape 4 of
11 the videotaped deposition of Bill Gates on August 28.
12 Q BY MR. BOIES: Let me show you a
13 document that has been previously marked as
14 Government Exhibit 378.
15 (The document referred to was marked as
16 Government Exhibit 378 for identification and is
17 attached hereto.)
18 Q BY MR. BOIES: In the middle of the
19 first page there is a message dated May 14, 1997,
20 from Ben Slivka to you and others.
21 Did you receive this e-mail on or about
22 May 14, 1997?
23 A I'm not sure. But I have no reason to
24 doubt that I did.
25 Q When Mr. Slivka writes as he does in
449 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 the second paragraph, "This summer we're going to
2 totally divorce Sun," do you know what he's referring
3 to?
4 A I'm not sure.
5 Q Did you ever ask him what he was
6 referring to?
7 A No.
8 Q In the next to last -- or in the last
9 sentence, actually, in the last sentence of the
10 second paragraph, Mr. Slivka writes that "JDK 1.2 has
11 JFC." And is the JFC there the Java Foundation
12 Classes that you referred to earlier?
13 A It's one of the many JFCs.
14 Q What is one of the many JFCs?
15 A The one in JDK 1.2.
16 Q Is the JFC in JDK 1.2 part of what was
17 described as a major threat to Microsoft?
18 A I have no idea which JFC that sentence
19 written by somebody other than me referred to.
20 Q Well, the sentence written by somebody
21 other than you was written to you; right, sir?
22 A It was sent to me.
23 Q Yes. And it was sent to you by one of
24 your chief -- one of your top executives; correct,
25 sir?
450 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A In an e-mail.
2 Q Yes.
3 And that's a frequent way that your top
4 executives communicate with you; correct, sir?
5 A Yes.
6 Q Now, Mr. Slivka here says that
7 Microsoft is going to be saying uncomplimentary
8 things about JDK 1.2 at every opportunity.
9 Do you see that?
10 A Where's that?
11 Q That is, "JDK 1.2 has JFC, which we're
12 going to be pissing on at every opportunity."
13 A I don't know if he's referring to
14 pissing on JFC or pissing on JDK 1.2 nor do I know
15 what he specifically means by "pissing on."
16 Q Well, do you know that generally he
17 means by pissing on he's going to be saying and
18 Microsoft is going to be saying uncomplimentary
19 things.
20 A He might mean that we're going to be
21 clear that we're not involved with it, that we think
22 there's a better approach.
23 Q Well, as you understand it, when
24 Mr. Slivka says he's going to be pissing on JDK 1.2,
25 as you seem to interpret it, at every opportunity, do
451 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 you interpret that as meaning that Microsoft is going
2 to be saying uncomplimentary things about JDK 1.2?
3 A I told you I don't know whether pissing
4 applies to JFC or JDK.
5 Q Well, he's going to be pissing on or
6 Microsoft is going to be pissing on either JDK 1.2 or
7 JFC or both according to Mr. Slivka.
8 Is that at least fair?
9 A That's appears to be what the sentence
10 says.
11 Q Yeah. And as the chief executive
12 officer of Microsoft, when you get these kind of
13 e-mails, would it be fair for me to assume that
14 "pissing on" is not some code word that means saying
15 nice things about you, that has the usual meaning
16 that it would in the vernacular?
17 A I don't know what you mean in this kind
18 of e-mail.
19 Q The kind of e-mail that is sent to you
20 by executives in the course of your business,
21 Mr. Gates.
22 A So all e-mails I get? Ben Slivka's not
23 an executive.
24 Q All the e-mails you get from people
25 telling you that they're going to piss on competitive
452 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 products, that's what I'm talking about.
2 A I don't remember mail like that. It
3 looks like I got one. But believe me, it's not a
4 term that's commonly used.
5 Q But you have no reason to think that he
6 means it in any way other than the normal meaning of
7 that term, do you, sir?
8 A I think it's a term of multiple
9 meanings. In this case I think it means what you've
10 suggested it means.
11 Q I thought it did too, and I hope to
12 avoid asking you going through the actual language.
13 And, Mr. Gates, let me show you a
14 document that has been previously marked as
15 Government Exhibit 377.
16 The second e-mail here refers to what
17 is attached as a final copy of the memo that was sent
18 to you for Think Week in November 1995.
19 (The document referred to was marked as
20 Government Exhibit 377 for identification and is
21 attached hereto.)
22 Q BY MR. BOIES: Do you recall receiving
23 this document, sir?
24 A No. What I recall about this document
25 is that it's already been marked as an exhibit and
453 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 that I spoke with Mr. Houck about it yesterday.
2 Q That may be so. My question to you is:
3 Do you recall receiving this -- let me make it
4 simple.
5 Did you receive this memo in or about
6 November of 1995?
7 A As I said before, for my Think Weeks I
8 get about three cardboard boxes of materials that
9 people put together for me. And in looking at this
10 memo, it's not a memo that I had seen before
11 Mr. Houck's deposition questions put to me yesterday.
12 Q So it's your testimony the first time
13 you saw this document was when Mr. Houck showed it to
14 you yesterday?
15 A That's right. It had a different
16 exhibit number then.
17 Q Let me ask you to go to page 5 of the
18 document which bears in the bottom right-hand corner
19 the Microsoft document production number ending 4683.
20 A Okay.
21 Q Do you see the heading "Shell
22 Integration"?
23 A Yes.
24 Q Do you see the second sentence where it
25 says, "We will bind the shell to the Internet
454 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Explorer, so that running any other browser is a
2 jolting experience"?
3 A I see that.
4 Q Do you have any understanding as to
5 what was meant by that?
6 A I can guess.
7 Q Well, first, this is in a memo that is
8 entitled "How to Get 30 percent share in 12 Months";
9 correct?
10 A Let's take a look. Yeah, that's on the
11 first page.
12 Q And is it clear to you that that is
13 referring to getting a 30 percent share of the
14 browser market?
15 A I haven't read the document, but it
16 seems likely that's what it is.
17 Q Okay.
18 Now, do you have an understanding --
19 I'm not asking you to guess. But do you have an
20 understanding as to what is meant by the statement,
21 "We will bind the shell to the Internet Explorer, so
22 that running any other browser is a jolting
23 experience"?
24 A I don't know what he meant by it, but I
25 can tell you what it likely means.
455 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Okay. I take it this is really how you
2 would have interpreted this when you received it; is
3 that fair?
4 A I didn't read it, so --
5 Q I said if you had received it, this is
6 how you would interpret it?
7 A I said I didn't read it. I actually --
8 I would have read the whole memo if I had received
9 it. I wouldn't have turned to that one page and just
10 looked at that one sentence. I would have read the
11 memo from the beginning page by page, and then I
12 probably would have understood it better than I do at
13 this moment.
14 Q If you do not have an understanding of
15 what is meant by it, you can tell me. If you do have
16 an understanding of what is meant by it, I would like
17 to have it.
18 A I don't know what he meant by it, but
19 I'd be glad to guess as to what it might mean.
20 Q I don't want you to guess. But if you
21 as the chief executive officer of Microsoft can tell
22 me how you would, in the ordinary course of your
23 business, interpret this statement, I would like to
24 have you do so.
25 MR. HEINER: Mr. Gates was prepared to
456 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 do that quite a while ago. That was an unnecessary
2 exchange.
3 Go ahead. You may answer.
4 THE WITNESS: He may be referring to
5 the fact that when you get a separate frame coming up
6 on the win -- on the screen, it's different than
7 having something take place in frame. And part of
8 our shell integration strategy going back all the way
9 to 1990 included the idea that as you navigated or
10 browsed through different media types, you didn't
11 have to have another frame come up because that --
12 that's sort of an artifact of having to think about
13 applications instead of objects.
14 And so as he looked at integrating the
15 browser and the shell together, we were going to
16 create a form of navigation optionally but as the
17 default where you don't switch frames as you navigate
18 the links from the shell to what's out on the
19 Internet back to what's in the local store.
20 Q BY MR. BOIES: Did anyone ever tell you
21 independent of this document in words or in substance
22 that Microsoft intended to bind the shell to the
23 Internet Explorer so that running any other browser
24 is a jolting experience?
25 A Well, certainly the idea of integrating
457 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 in a way that made a better browsing experience was
2 something we were talking about quite a bit. Those
3 words, no, I never heard anything along the lines of
4 those words.
5 Q The words that are in this document; is
6 what you're saying?
7 A That's right.
8 Q Okay.
9 Did Microsoft make any effort to
10 discourage Apple from writing in a JDK 1.2?
11 A That never would have come up. Apple
12 is not an application developer.
13 Q Let me -- let me back up.
14 Did Microsoft ever make an effort to
15 get Apple to discourage applications writers for
16 Apple's machines from writing in what you have
17 referred to as Sun's Java or using the Sun Java
18 runtimes?
19 A I'm sure there was discussion with
20 Apple about the fact that their unique operating
21 system capabilities wouldn't show through with the
22 least common denominator pure approach. Whether that
23 related specifically to JDK 1.2 or not, I can't say.
24 Q When you say you're sure there were
25 discussions, are you talking about discussions
458 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 between Microsoft representatives and Apple
2 representatives?
3 A Yes.
4 Q What was Microsoft's interest in having
5 Apple discourage applications writers for Apple's
6 operating system from using Java runtimes or JDK 1.2?
7 A We thought they might share the view
8 that applications showing off unique operating system
9 features was a good thing. But --
10 MR. BOIES: Could I have that answer
11 read back?
12 (Answer read.)
13 Q BY MR. BOIES: Was there any other
14 reason, sir?
15 A No.
16 Q Did you have personally any discussions
17 with Apple with regard to trying to agree with Apple
18 as to the extent to which Apple and Microsoft would
19 compete with respect to Apple's QuickTime software?
20 A No.
21 Q Do you know if anyone from Microsoft
22 had such discussions with anyone at Apple?
23 A I know over a course of years we've
24 talked to them about what their plans are for
25 QuickTime, but that's all.
459 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Does Microsoft have software that
2 competes with QuickTime?
3 A Since QuickTime's a free runtime, you
4 could answer that either "yes" or "no." It's not a
5 revenue source for Apple. But there is an Apple
6 technology that has some common things with some
7 Microsoft technologies.
8 Q Do you believe that QuickTime software
9 competes with any software distributed by Microsoft?
10 MR. HEINER: Objection.
11 THE WITNESS: Depends on what you mean
12 "compete."
13 Q BY MR. BOIES: Using that in the way
14 that you would ordinarily understand it in the
15 operation of your business, sir.
16 A No.
17 Q Did you make any effort or did
18 Microsoft make any effort to get Apple to agree not
19 to market QuickTime in any respect or to limit the
20 marketing of QuickTime in any respect?
21 A There were discussions about whether we
22 could help them with their QuickTime goals at various
23 points in time. And, in fact, they encouraged us to
24 do something where we'd actually by working with them
25 make QuickTime even more popular than it is.
460 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 MR. BOIES: Would you read back my
2 question, please?
3 (Question read.)
4 Q BY MR. BOIES: Can you answer that
5 question, sir?
6 MR. HEINER: Objection.
7 THE WITNESS: I'm not aware of anything
8 that was directly aimed at those things, no.
9 Q BY MR. BOIES: Are you aware of
10 anything that was indirectly aimed at those things?
11 A No.
12 Q Did, to your knowledge, any
13 representative of Microsoft try to convince Apple not
14 to sell or promote QuickTime for uses for which
15 Microsoft promotes the use of NetShow?
16 A There was some discussion about the
17 future development of the runtime code and whether we
18 could work together on the Windows side of that
19 runtime code that would enhance their goal and our
20 goals.
21 Q And was there a discussion in that
22 context about Apple agreeing not to sell or promote
23 QuickTime for uses that Microsoft was promoting
24 NetShow to fulfill?
25 A Not that I'm aware of.
461 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Insofar as you're aware, did Microsoft
2 representatives tell Apple representatives that if
3 Apple would agree not to sell or promote QuickTime
4 for uses for which Microsoft offered NetShow, that
5 Microsoft would help Apple in other areas?
6 A Well, the Quick -- as far as I know,
7 the QuickTime runtime is free. So when you say
8 "sell," I don't -- I'm not sure what you mean there.
9 Q I think I said sell or promote, I
10 certainly meant to. But I will use the word
11 "distribute," if that will help.
12 A I think there was a technical
13 discussion about whether a common runtime was
14 achievable which would have enhanced their QuickTime
15 goals.
16 Q When you say "a common runtime," would
17 you explain what you mean by that?
18 A I mean that the Windows media player
19 runtime would combine technology from them and from
20 us that met all of their goals for QuickTime.
21 Q And so there would be a Windows media
22 player that would be distributed, and Apple would
23 stop distributing QuickTime for purposes for which
24 the Windows media player was distributed; is that
25 what you're saying?
462 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A No. They wouldn't have to stop
2 anything. There would just be a new runtime that
3 might incorporate some of their technology and help
4 them with their QuickTime goals.
5 Q Well, when you say there would be a new
6 program that would incorporate or might incorporate
7 some of their technology, would that result in them
8 stopping the distribution of their existing QuickTime
9 technology?
10 A There's no reason it would need to.
11 Q Was that part of the discussions?
12 A I don't think so. But as I told you, I
13 wasn't part of any of those discussions.
14 Q Were you aware of those discussions
15 while they were going on?
16 A I knew that Apple had a -- had the
17 QuickTime runtime for Windows. And there was always
18 a question of whether we could create a Windows
19 runtime that combined what their goals were there and
20 what they had done well there for the work we were
21 doing. And I know we talked to Apple about whether
22 we could help each other in an effort like that.
23 Q When you talk about helping each other,
24 would that result in a single product that would then
25 be distributed in place of both QuickTime and
463 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 NetShow?
2 A No. People could still distribute
3 their old things. But if you create a new thing
4 that's better, some people might use it.
5 Q Well, was the purpose of creating the
6 new Windows media player that you referred to to
7 obsolete QuickTime?
8 A Whatever functionality QuickTime had
9 previously would be unaffected by any such effort.
10 Q That really wasn't my question,
11 Mr. Gates. Maybe I can state it more clearly.
12 Did Microsoft try to convince Apple to
13 take actions which would have resulted in Apple no
14 longer distributing QuickTime to people to whom
15 Microsoft was distributing NetShow or a successor
16 Microsoft product?
17 A I'm not aware of anything that would
18 have stopped them from distributing the QuickTime
19 they had. But it was possible we could come up with
20 something that would be helpful to both companies in
21 terms of a product that took some of their technology
22 and ours and was better for users.
23 Q Did Microsoft offer to have Apple
24 continue to offer a multimedia player for the Mac
25 platform and to assist Apple in that if Apple would
464 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 agree not to distribute that multimedia player for
2 the Windows platform?
3 A As I said, I don't think there was any
4 discussions about not distributing some old thing,
5 but rather a question that was could something new be
6 created which would be better for both companies.
7 Q Was the idea that once this new thing
8 was created, the old thing that Apple was
9 distributing would no longer be distributed by Apple?
10 A As I said, I don't think that was part
11 of the discussion.
12 Q Have you ever been told anything or
13 have you ever read anything about any contentions
14 that Apple may or may not make concerning these
15 discussions?
16 A No.
17 Q Are you aware of any assertions by
18 Apple representatives that Microsoft representatives
19 tried to get them to agree to divide the market?
20 A No.
21 Q No one's ever told you that; is that
22 your testimony?
23 A That's right.
24 Q And you've never heard that from any
25 source?
465 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A That's right.
2 Q Do I take it from what you said
3 yesterday that if, in fact, Microsoft representatives
4 had attempted to get Apple representatives to
5 participate in a market division, that would be
6 contrary to Microsoft policy?
7 MR. HEINER: Objection.
8 THE WITNESS: That's right.
9 Q BY MR. BOIES: And I take it that if
10 you found out that people had done that contrary to
11 Microsoft's policy, they would be appropriately dealt
12 with?
13 A Yes.
14 Q Are you a regular reader of the Wall
15 Street Journal?
16 A Some days I read the Wall Street
17 Journal.
18 Q Are you aware of a Wall Street Journal
19 article that discusses assertions by Apple concerning
20 alleged efforts by Microsoft to get Apple to agree to
21 divide markets?
22 A No.
23 MR. HEINER: Mr. Boies?
24 MR. BOIES: Yes.
25 MR. HEINER: Is the antitrust division
466 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 contemplating filing an amended complaint in this
2 action?
3 MR. BOIES: No.
4 MR. HEINER: Are these questions being
5 asked pursuant to the complaint that was filed in
6 this action?
7 MR. BOIES: Yes.
8 MR. HEINER: I think they're outside
9 the scope of that complaint.
10 MR. BOIES: I do not. I think that the
11 pattern of Microsoft in terms of attempts to divide
12 markets and the effect of those attempts on
13 Microsoft's monopoly power and the evidence of
14 Microsoft's monopoly power that comes out of those
15 attempts are all directly relevant to the case.
16 MR. HEINER: You could plead a
17 complaint like that. You haven't yet.
18 MR. BOIES: I think that complaint is
19 clearly so pled. I think this is clearly within the
20 scope of the complaint.
21 MR. HEINER: Let me ask you a different
22 question.
23 Have you prioritized your questions
24 today so that you've asked the ones that are most
25 important to you?
467 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 MR. BOIES: I think that I'm going
2 through the examination in a logical way. It has not
3 been possible to prioritize things completely without
4 simply jumping from topic to topic because of the
5 length of time that it has taken to deal with certain
6 topics. But I do think that the pattern and practice
7 of attempts of market division is a matter of
8 priority.
9 MR. HEINER: I won't cut off the
10 questioning. But note the objection.
11 Q BY MR. BOIES: Let me ask you to go to
12 a different issue of market division or alleged
13 market division. But before I do, let me just refer
14 you to a Wall Street Journal article of July 23,
15 1998, entitled "U.S. Probing Microsoft's Multimedia
16 Role."
17 Does that refresh your recollection as
18 to whether you ever saw a -- a Wall Street Journal
19 article about alleged market division attempts
20 between Microsoft and Apple?
21 MR. HEINER: Do you want to show us the
22 article?
23 MR. BOIES: I have no objection to
24 showing it. And I have no objection to marking it.
25 MR. HEINER: I don't care if it's
468 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 marked or not.
2 MR. BOIES: My purpose is just to try
3 to refresh his recollection, to see whether he
4 recalls having ever seen this.
5 THE WITNESS: No.
6 MR. BOIES: Okay.
7 Q In that case, let me show you a
8 document marked as Government Exhibit 375.
9 The second item on the first page is an e-mail
10 message from you to Jim Allchin and others dated
11 October 12, 1997.
12 (The document referred to was marked as
13 Government Exhibit 375 for identification and is
14 attached hereto.)
15 Q BY MR. BOIES: Did you send this e-mail
16 October 12, 1997?
17 A I don't remember it. But I have no
18 reason to doubt that I did.
19 Q In the first paragraph you say,
20 quote,
21 "I have a critical meeting
22 with Intel a week from Wednesday. I
23 want to convince them that they need
24 to stay away from Oracle NCs and work
25 more closely with Microsoft," close
469 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 quote.
2 Do you see that?
3 A Uh-huh.
4 Q Did you have that meeting?
5 A I had a meeting.
6 Q Do you recall having that meeting?
7 A I don't know what you mean "that
8 meeting."
9 Q You say, "I have a critical meeting
10 with Intel a week from Wednesday." Did you have that
11 meeting?
12 A I feel sure I had a meeting with Intel
13 after this piece of e-mail was sent.
14 Q In October of 1997?
15 A Could have been November. You'd have
16 to -- let's see. No. October.
17 Q Let me ask you to look at the last
18 paragraph under the heading "Sun byte codes are bad
19 for them." And you say, quote,
20 "I want them to understand
21 that helping NCs and JAVA will push
22 us to do Windows and other software
23 in SUN byte codes even if we don't
24 rewrite them in JAVA," close quote.
25 Do you see that?
470 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A Uh-huh.
2 Q When you say "I want them to
3 understand," are you referring to Intel?
4 A I think so.
5 Q Did Microsoft make any effort to
6 convince Intel not to help Sun and Java?
7 A Not that I know of.
8 Q Did you or anyone at Microsoft attempt
9 to convince Intel not to engage in any software
10 activity?
11 MR. HEINER: Objection.
12 THE WITNESS: No.
13 Q BY MR. BOIES: Did you or, to your
14 knowledge, anyone at Microsoft try to convince Intel
15 that it should not engage in any software activity
16 unless Microsoft was involved in that activity?
17 A I'm sure we pointed out sometimes how
18 sometimes a lack of communications between the two
19 companies on various subjects including software
20 development led to unfortunate unreliability and
21 mismatch which led to bad customer experiences.
22 Q And what did that lead you to ask Intel
23 to do?
24 A Oh, in general, to see if we couldn't
25 do a better job communicating with each other so that
471 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 people would have better experiences using the PC.
2 Q Did you tell or did anyone, insofar as
3 you are aware, from Microsoft tell Intel
4 representatives that you did not want Intel's
5 software engineers interfering with Microsoft's
6 existing domination of the software side of the PC
7 industry?
8 A No.
9 Q Are you aware of an Intel operation
10 referred to as the Intel architecture labs?
11 A Yes.
12 Q Did you tell Intel chief executive
13 officer Andy Grove that you believed that Intel
14 should shut down its Intel architecture labs?
15 A No.
16 Q What did you understand the Intel
17 architecture labs to be doing?
18 A I can't claim to have a lot of
19 expertise on the broad set of things the Intel
20 architecture labs was doing.
21 Q What did you know the Intel
22 architecture labs was doing?
23 A Well, they were doing some plumbing
24 software to try to get some things to run on Windows
25 3.1 at one point. That's one thing I know they were
472 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 doing. But in terms of their breadth of activities,
2 I'm -- the most of it I wouldn't have any familiarity
3 with.
4 Q Did you believe that there was anything
5 about what Intel was doing in the Intel architecture
6 labs that was inconsistent with Microsoft's
7 interests?
8 A Well, the fact that their software
9 didn't run with Windows 95 and would break if the
10 user wanted to move up to Windows 95 was a subject of
11 concern and discussion for us related to an overall
12 set of projects that were sometimes called NSP,
13 although that term had many meanings.
14 Q What does NSP stand for?
15 A Sometimes it means native signal
16 processing.
17 Q And how did what the Intel architecture
18 labs was doing relate to NSP?
19 A That was the plumbing.
20 Q For NSP?
21 A I believe so.
22 Q Did you tell Intel CEO, Mr. Grove, that
23 you believed that what Intel was doing in the Intel
24 architecture labs was contrary to Microsoft's
25 interests?
473 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A In a broad sense, no. In terms of some
2 specific things that broke software for users I did
3 evidence that concern.
4 Q And you did so personally?
5 A Personally and inpersonally.
6 Q Did you ask Mr. Grove to cancel the
7 Intel architecture labs' work?
8 A No.
9 Q Did you or, insofar as you're aware,
10 anyone else at Microsoft tell people at Intel that
11 they should leave the software side of the PC
12 business entirely to Microsoft?
13 A We were having a hard time coordinating
14 our work with Intel, and we thought the quality of
15 some of their work was very low as well as not
16 working with any of our new Windows work. We may
17 have suggested at some point that the net
18 contribution of their software activities could even
19 be viewed to be negative.
20 Q Did you or insofar as you are aware or
21 anyone else at Microsoft tell representatives of
22 Intel that their software activities were
23 inconsistent with cooperation between Intel and
24 Microsoft?
25 A The specific work they did that
474 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 completely broke our work I'm sure I indicated I
2 didn't think that was a good idea for either company.
3 Q Other than the specific software that
4 would not work on Windows 95 that Intel was working
5 on, did you or, insofar as you are aware, anyone else
6 at Microsoft tell Intel representatives that the
7 software work that Intel was doing was inconsistent
8 with cooperation between Intel and Microsoft?
9 A Well, there's some other things that
10 they did that created incompatibilities.
11 Q Incompatibilities between what and
12 what?
13 A Between their software and Windows,
14 that was intended to run on Windows, that created
15 incompatibilities.
16 Q And did you tell them that that
17 software also was not consistent with cooperation
18 between Microsoft and Intel?
19 A I doubt I used those words. I
20 suggested that it wasn't helpful to any of their
21 goals or our goals to have software that had
22 incompatibilities and was low quality and broke.
23 Q Did you tell Intel representatives or
24 did, insofar as you're aware, any Microsoft employee
25 tell Intel representatives that you were concerned
475 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 about Intel support for Netscape?
2 A I don't remember that.
3 Q Do you remember telling Intel
4 representatives that you were concerned that Intel
5 support for Netscape could allow Netscape to grow
6 into a de facto standard?
7 A No.
8 Q Did you tell representatives of Intel
9 that you were concerned that Intel's use of Netscape
10 could set up a positive feedback loop for Netscape
11 that would allow it to grow into a de facto standard?
12 A What do you mean Intel's use of
13 Netscape?
14 Q I'm asking whether you told this to
15 Intel. If you didn't --
16 A Given that I don't know what you mean
17 by Intel use of Netscape, if you're not going to
18 clarify what you mean by that --
19 Q All I'm asking is whether you told them
20 something, Mr. Gates. And if you tell me, "I didn't
21 tell them that. Not only would I not tell them that
22 because I don't understand what it could be," that's
23 an answer.
24 But what I'm asking you is whether you
25 told them that in words or in substance. And if you
476 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 didn't, you didn't. Or if you say you didn't, you
2 say you didn't. But all I want to do is get your
3 answer.
4 MR. HEINER: And the witness's plea for
5 clarification of the question is that when you add
6 the "in substance" part, then you would need to
7 define the terms.
8 MR. BOIES: Well, let me try to
9 approach it this way. I wouldn't have thought the
10 term used is quite so ambiguous.
11 Q But, Mr. Gates, did you tell
12 representatives of Intel that Intel using Netscape in
13 a Windows environment would not be a problem so long
14 as Intel did not assist in setting up a positive
15 feedback loop for Netscape that allowed it to grow
16 into a de facto standard? Did you say that or write
17 that or communicate that, those words or words that
18 you recognize to mean the same thing?
19 MR. HEINER: Objection.
20 THE WITNESS: I'm still confused about
21 what you mean Intel's using something. Are you
22 talking about like in their internal IT systems?
23 What's this about?
24 Q BY MR. BOIES: Mr. Gates, either you
25 told that to Netscape or you didn't. If you tell me
477 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 you didn't tell that to Netscape, I'll go on to the
2 next question.
3 A I did not.
4 Q Okay.
5 MR. HEINER: Let's get one point clear.
6 When the witness has some confusion on a question,
7 should he or should he not bring that to your
8 attention?
9 MR. BOIES: I think the witness should
10 tell me that "I don't understand your question."
11 MR. HEINER: That's what he did, and
12 you seemed annoyed.
13 MR. BOIES: I don't think I seemed
14 annoyed. I think that there is, perhaps, given the
15 amount of time that we've spent on defining words
16 that I think have ordinary and clear meanings, I may
17 be anxious to move that along as much as possible.
18 But if the witness simply says "I don't understand
19 the question," I will rephrase it. There may be
20 times when I do become a little annoyed when the
21 witness instead of doing that decides to rephrase the
22 question and answer an entirely different question
23 from the one I've asked. But if the witness simply
24 says --
25 MR. HEINER: Which is what just
478 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 happened.
2 MR. BOIES: I don't want to debate it
3 with you, the record will show what happened. But if
4 the witness simply says in response to a question "I
5 don't understand that question," I'll take that for
6 an answer and I'll rephrase it.
7 Q Did you, Mr. Gates, personally ever
8 express concern to Mr. Grove that Intel's software
9 work was beginning to overlap with Microsoft's
10 software work?
11 A Only in the sense that the low quality
12 and incompatibilities were inconsistent with any
13 goals that Intel might have had in doing that work.
14 Q Why was that a concern?
15 A Because Intel was wasting its money by
16 writing low quality software that created
17 incompatibilities for users, and those negative
18 experiences weren't helpful for any goal that Intel
19 had.
20 Q Were they harmful to any goal that
21 Microsoft had?
22 A Only in the sense of hurting PC
23 popularity by creating negative user experiences.
24 Q Is it your testimony that your only
25 concern with what Intel was doing in the software
479 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 area was a concern to avoid negative user
2 experiences?
3 A That's right. Low quality and
4 incompatibilities.
5 Q Which, according to you, would lead to
6 negative user experiences; correct?
7 A That's right.
8 Q Did you or, insofar as you are aware,
9 anybody at Microsoft ever tell Intel representatives
10 in words or in substance that they should stick to
11 hardware and leave the software to Microsoft?
12 MR. HEINER: Objection.
13 THE WITNESS: I'm sure there were times
14 when we were frustrated about the quality and
15 incompatibility problems created about their software
16 where someone might have expressed that sentiment in
17 an extreme feeling about how tough it had been for
18 Intel to do quality work that would have advanced any
19 Intel goal.
20 Q BY MR. BOIES: Were you aware of any
21 work that Intel was doing relating to Internet
22 software development?
23 A I can't think of any.
24 Q Did you ever express any concern to
25 anyone at Intel, or to your knowledge, did anyone at
480 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Microsoft ever express any concern to anyone at Intel
2 concerning Intel's Internet software work, if any?
3 A I don't think Intel ever did any
4 Internet software work.
5 Q And if they did, I take it it's your
6 testimony no one ever told you about it?
7 A That's right.
8 Q Did you or, to your knowledge, anyone
9 at Microsoft express concern to Intel about the
10 success of Java or what you have referred to in this
11 deposition as Java runtimes?
12 A From time to time we'd have general
13 discussions with Intel about things going on in the
14 industry. And I'm sure our views of the Java runtime
15 competition may have come up in some of those
16 discussions.
17 MR. BOIES: Could I have the question
18 and answer read back please?
19 (The following record was read:
20 "Q Did you or, to your
21 knowledge, anyone at Microsoft
22 express concern to Intel about the
23 success of Java or what you have
24 referred to in this deposition as
25 Java runtimes?
481 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 "A From time to time we'd
2 have general discussions with Intel
3 about things going on in the
4 industry. And I'm sure our views of
5 the Java runtime competition may have
6 come up in some of those
7 discussions.")
8 Q BY MR. BOIES: In those discussions,
9 did you or others from Microsoft express concern
10 about Java and Java runtime's popularity to Intel
11 representatives?
12 A I think it's likely in those general
13 discussions. We talked about some of the
14 opportunities and competitive things going on
15 including our view of what was going on in Java
16 runtime.
17 Q Did you tell representatives of Intel
18 or, to your knowledge, anyone from Microsoft tell
19 representatives of Intel that in Microsoft's opinion
20 the wide distribution of Java and Java runtimes were
21 incompatible with interests of both Intel and
22 Microsoft?
23 A Actually, there -- there's one aspect
24 of Java that could have an effect on Intel and would
25 have no effect on Microsoft. So it's completely
482 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 orthogonal. And I pointed out to them what that was.
2 And so I did think there was one thing they ought to
3 think about in terms of where the world of software
4 development was going. But it wasn't an issue that
5 related to Microsoft.
6 Q Irrespective of what you said about
7 that particular issue, did you or others from
8 Microsoft tell Intel in words or in substance that is
9 as a general matter, a general conclusion, the
10 popularity of Java and Java runtimes was not in your
11 joint interest? And joint interest, I mean Microsoft
12 and Intel.
13 A No. There was nothing about it that
14 related to any joint interest. There was one thing
15 about it that related to some of Intel's interests
16 and there were other things about it that related to
17 some of Microsoft's interests. But there's no
18 overlap between those two.
19 Q Let me put the question this way: Did
20 you or, to your knowledge, others from Microsoft tell
21 Intel that for whatever reasons you believed that the
22 widespread distribution of Java and Java runtimes was
23 inconsistent with both interests of Intel and
24 interests of Microsoft?
25 A Well, it's like you're trying to
483 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 rephrase what I said in a more inaccurate way. I
2 told you there's an aspect of it that I thought they
3 should think about that related to them only, that's
4 the byte code piece. And then there's an aspect of
5 it that relates to us only. So there's no end there,
6 there's just a piece that might have been of interest
7 to them that I articulated, and then there's the part
8 that relates strictly to us.
9 Q Let me take it in two pieces. Did you
10 tell Intel representatives that you believed that
11 there were reasons why the widespread distribution of
12 Java and Java runtimes were not in Intel's interests?
13 A Not in that general sense. I pointed
14 out the very specific aspect of it, the byte code
15 aspect, that I thought they ought to think about that
16 had no effect on us.
17 Q Did you tell Intel representatives that
18 there were things about the wide distribution of Java
19 and Java runtimes that Microsoft believed was not in
20 Microsoft's interest?
21 A It's likely that in the general
22 discussion the notion of some of the new competitive
23 activities including the Java runtime issues would
24 have come up in some discussions with Intel but
25 not -- not related to anything they were doing.
484 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Did you ask Intel to keep you apprised
2 of what software work Intel was doing?
3 A I think I made that request in vein on
4 several occasions, nothing ever came of it.
5 Q Is it your testimony that they refused
6 to keep you apprised of the software work they were
7 doing?
8 A No. I just said to them that if they
9 would -- whatever software work they were doing that
10 was intended to help Windows, they should talk to us
11 about it early on if they wanted to have the highest
12 probability that it would, in fact, achieve that
13 goal.
14 And unfortunately, we never achieved
15 that result; that is, they would do things related to
16 Windows that without talking to us in advance, and
17 then once they had done the work, there would be some
18 incompatibilities between what they had done and
19 Windows itself.
20 Q When is the last time that you asked
21 Intel to keep you apprised of what software work they
22 were doing?
23 A I'm not sure.
24 Q Approximately when?
25 A I don't know.
485 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Was it within the last year?
2 A I don't know.
3 Q Was it within the last two years?
4 A I honestly don't know.
5 Q Was it within the last three years?
6 A There's probably one instance where I
7 asked them to tell us about things they were doing
8 related to Windows.
9 Q Did you or others, to your knowledge,
10 from Microsoft tell Intel that if Intel began to
11 compete with Microsoft, Microsoft would be forced to
12 begin to compete with Intel?
13 A No.
14 Q Not at all, sir; never said that in
15 words or in substance?
16 A No.
17 Q To your knowledge did anyone else from
18 Microsoft ever say that?
19 A I'm not aware of anybody saying that.
20 Q If anybody had said that, would you
21 consider that to be inconsistent with company policy?
22 MR. HEINER: Objection.
23 THE WITNESS: I'm confused. Intel and
24 Microsoft are not in the same businesses, so there's
25 no policy about one of our people suggesting that
486 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 we're going to go into the chip business.
2 Q BY MR. BOIES: Was it part of what you
3 wanted to accomplish, Mr. Gates, to be to keep Intel
4 and Microsoft in separate businesses?
5 A No.
6 Q Did you ever take any action intended
7 to accomplish that?
8 A No.
9 Q Did you or, to your knowledge, anyone
10 from Microsoft ever tell people at Intel that
11 Microsoft would hold up support for Intel's
12 microprocessors if Intel didn't cooperate with
13 Microsoft in areas that Microsoft wanted Intel's
14 cooperation in?
15 A When we saw Intel doing the low quality
16 work that was creating incompatibilities in Windows
17 that served absolutely no Intel goal, we suggested to
18 Intel that that should change. And it became
19 frustrating to us because it was a long period of
20 time where they kept doing work that we thought,
21 although it was intended to be positive in the
22 Windows environment, it was actually negative. And
23 we did point out the irony of how while we seemed to
24 communicate with them on microprocessor issues and
25 yet they seemed on the areas where they were trying
487 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 to enhance Windows that the communication worked very
2 poorly.
3 Q Did you or others on behalf of
4 Microsoft tell Intel that Microsoft would hold up
5 support for Intel's microprocessors if Intel did not
6 cooperate with Microsoft?
7 A No.
8 Q No one ever told Intel that, to your
9 knowledge?
10 A That's right.
11 Q Let me see if I can refresh your
12 recollection.
13 Did you or anyone from Microsoft ever
14 tell Intel representatives that Microsoft would hold
15 up support for Intel's microprocessors if Intel
16 didn't cooperate with Microsoft on the Internet?
17 A No.
18 Q Did you or anyone from Microsoft ever
19 tell representatives of Intel that Intel would not
20 cooperate -- that if Intel would not cooperate with
21 Microsoft on communications programs, Microsoft would
22 hold up support for Intel's microprocessors?
23 A No.
24 Q Did you or to your knowledge anyone
25 from Microsoft ever tell Intel that you wanted Intel
488 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 to reduce its support of Netscape?
2 MR. HEINER: Objection.
3 THE WITNESS: It's very likely that our
4 sales force that calls on Intel as a software
5 customer talked to them about their web site and
6 their browsers. And they may have tried to convince
7 them to use our browser in terms of their internal
8 efforts. It's kind of a knit, but I think it's
9 possible.
10 Q Did you, Mr. Gates, ever yourself try
11 to get Intel to reduce its support of Netscape?
12 A I'm not aware of any work that Intel
13 did in supporting Netscape. They may have used their
14 browser internally or one of their server things, but
15 that's -- that's not really support. So I'm not sure
16 of any support they were giving to Netscape.
17 Q You may mean that to answer my
18 question, but I want to be clear.
19 It is your testimony that you're not
20 aware of any instance where you asked anybody at
21 Intel to reduce the support that Intel was providing
22 to Netscape; is that your testimony?
23 A No. I may have asked -- I may -- and I
24 don't remember it -- but I may have talked to them
25 about their internal browser use. I don't think so,
489 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 but I may have. And I may have talked to them about
2 their web servers and what they were using, but I
3 don't think so.
4 MR. HEINER: We would like to take one
5 last break here at some point, and we'll go through
6 until 4:00.
7 MR. BOIES: Okay.
8 MR. HEINER: Okay.
9 THE VIDEOGRAPHER: The time is 3:26.
10 We're going off the record.
11 (Recess.)
12 THE VIDEOGRAPHER: The time is 3:36.
13 We're going back on the record.
14 Q BY MR. BOIES: Mr. Gates, you're
15 familiar with a company called RealNetworks, are you
16 not?
17 A Yes.
18 Q Did you ever have any discussions with
19 any representative of RealNetworks concerning what
20 products RealNetworks should or should not offer or
21 distribute?
22 A No.
23 Q Microsoft signed two contracts with
24 RealNetworks, did it not, sir?
25 A I have no idea. I thought it was one.
490 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q RealNetworks was previously called
2 Progressive Networks; correct, sir?
3 A Right.
4 Q In the contract or contracts, if there
5 was more than one, between Microsoft and
6 RealNetworks, was there any restriction on what
7 services RealNetworks could provide to competitors of
8 Microsoft?
9 A I've never looked at those contracts.
10 Q Did you participate at all in those
11 contracts either the negotiation of those contracts
12 or discussions concerning those contracts prior to
13 the time they were entered into?
14 A I knew that Muglia and Maritz were
15 talking with Progressive about some kind of deal, but
16 I didn't know what was in the deal.
17 Q Did you know anything about what was in
18 the deal?
19 A I knew there was an investment piece.
20 I knew there was some code licensing in it. That's
21 about all.
22 Q At the time that Microsoft was
23 negotiating the contract or contracts with
24 RealNetworks -- and I'll refer to it as RealNetworks
25 even though at the time it was referred to as
491 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Progressive Networks -- did you consider that company
2 to be a competitor of Microsoft?
3 A Not -- I think I was confused about
4 what RealNetworks -- what their plans were, and I
5 wasn't sure if they were a competitor or not.
6 Q Was there a time when you did become
7 convinced that they were a competitor?
8 A Yes.
9 Q When was that?
10 A When Rob Glaser appeared in Washington,
11 D.C.
12 Q To testify before a Congressional
13 committee?
14 A Senate, yes.
15 Q What led you to conclude from
16 Mr. Glaser's testimony that RealNetworks was a
17 competitor of Microsoft?
18 A It was nothing in his testimony.
19 Q Why did you become convinced at the
20 time of his testimony that RealNetworks was a
21 competitor of Microsoft?
22 A Well, because he went out of his way to
23 lie about us, I sort of thought, "Hum, he must be a
24 competitor."
25 Q When you say he went out of his way to
492 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 lie about you, when was that?
2 A That was at the press interview
3 surrounding the testimony -- maybe the testimony
4 itself, I'm not sure. I've never seen a transcript.
5 Q Did you ever personally have a
6 conversation with Mr. Glaser about his business?
7 A A long, long time ago when Rob was just
8 getting started I think there was one meeting that I
9 had with Rob. I haven't met with him since then.
10 Q Was that meeting before or after the
11 contract between RealNetworks and Microsoft that you
12 say that you know about?
13 A If you mean the contract where we
14 invested in Progressive, it was years before it and
15 not at all related to it.
16 Q When was the contract in which you
17 invested in Progressive Networks or RealNetworks?
18 A I'm not sure. I'd guess it's about a
19 year ago.
20 Q Did you have a conversation with
21 Mr. Glaser a few days after that agreement was
22 signed?
23 A Now that you ask me that, maybe I did.
24 Maybe I did. I think we may have had a short
25 meeting.
493 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q And did you in that meeting tell
2 Mr. Glaser in words or in substance how you thought
3 he should limit his business?
4 A Absolutely not.
5 Q Not in any way, sir?
6 A Not in any way.
7 Q Did you tell him he ought to get out of
8 the base streaming media platform business?
9 A No.
10 Q Did anyone ever tell you that
11 Mr. Glaser had said he would get out of the base
12 streaming media platform business?
13 A No.
14 Q Did Mr. Maritz ever tell you that
15 Mr. Glaser's stated plan was that he would get out of
16 the base streaming media platform business?
17 A As far as I know, we didn't know what
18 Rob's plans were.
19 Q Did you ever try to find out what those
20 plans were, sir?
21 A No.
22 Q Were those plans important to you?
23 A To me personally? No.
24 Q Were they important to Microsoft?
25 A On a relative basis, I'd say no.
494 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Well, I suppose on a relative basis a
2 business as big as Microsoft, I don't know what would
3 be important, but --
4 A I can tell you.
5 Q -- but on a non-relative basis?
6 A I can tell --
7 Q Yes. Tell me what would be important
8 to Microsoft on a relative basis.
9 A Improvements in Windows, improvements
10 in Office, breakthroughs in research, breakthroughs
11 in Back Office.
12 Q How about browsers? On a relative
13 basis would that be important -- was that important
14 to Microsoft?
15 A To the degree it relates to Windows,
16 yes.
17 Q What about Java or Java runtime? Was
18 that on a relative basis important to Microsoft?
19 A To the degree it related to Windows,
20 yes.
21 Q Let me ask you to look at a document
22 that we have marked Government Exhibit 379. This
23 purports to be an e-mail from Paul Maritz. You are
24 not shown on this as receiving a copy. The portion
25 I'm particularly interested in is the last full
495 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 paragraph that says, quote,
2 "Rob's stated plan is that
3 he will get out of the base streaming
4 media platform business, and focus on
5 higher level solutions, hosting, and
6 content aggregation, and says that
7 his goal is now to get us to get his
8 base technology as widespread as
9 possible," close quote.
10 Do you see that?
11 A Uh-huh.
12 (The document referred to was marked as
13 Government Exhibit 379 for identification and is
14 attached hereto.)
15 Q BY MR. BOIES: Did anyone ever tell
16 you, as Mr. Maritz writes here, that Mr. Glaser had
17 said that his stated plan was that he would get out
18 of the base streaming media platform business?
19 A No.
20 Q Did you or, to your knowledge, anyone
21 from Microsoft ever tell Mr. Glaser that he should
22 get out of the base streaming media platform
23 business?
24 A No.
25 Q Okay.
496 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 You are aware, are you not, sir, that
2 one of the issues in this case is the extent to which
3 operating systems and browsers are or are not
4 separate products?
5 MR. HEINER: Objection.
6 Mischaracterizes the allegations of the complaint, I
7 believe.
8 MR. BOIES: Well, if the witness tells
9 me that he doesn't think that's an issue in the case,
10 he can so tell me.
11 THE WITNESS: I'm not a lawyer, so I
12 think it's very strange for me to opine on what's an
13 issue in the case. As far as I know, the issues in
14 the case are not -- are something that you decide,
15 and I don't claim to have any expertise at all.
16 Q BY MR. BOIES: And if you don't know,
17 that's okay. But one of the things that I want to
18 understand from you is whether your understanding,
19 which is important to my next line of questions, is
20 that the issue of whether or not browsers are or are
21 not a separate product from the operating system is
22 in this case.
23 MR. HEINER: Objection. What operating
24 system? What browsers? You referred to "the
25 operating system."
497 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 MR. BOIES: You want me to stop. All
2 right. I --
3 MR. HEINER: No. I want you to ask the
4 question but with specific specificity.
5 MR. BOIES: I've asked the question.
6 If he says he doesn't understand this question,
7 again, we put it down and then it's there for people
8 to look at later.
9 MR. HEINER: That's fine. You can do
10 that. And I, as his counsel, can pose an objection.
11 MR. BOIES: Yeah. But you can't pose
12 questions to me particularly when you're trying to
13 get the witness out at 4:00.
14 MR. HEINER: I can.
15 MR. BOIES: Not questions to me.
16 Q Mr. Gates -- you can put in an
17 objection, I'm not trying to keep you from putting in
18 an objection.
19 Mr. Gates, do you understand that the
20 issue of whether or not browsers are a separate
21 product or are not a separate product from the
22 operating system is an issue in this case?
23 A I don't consider myself someone who
24 could say if that's an issue in this case or not.
25 Q Have you participated in any way in
498 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 trying to get Microsoft personnel to use language
2 that would suggest that browsers and operating
3 systems are not separate products?
4 A I have no idea what you mean by that.
5 Q Well, have you seen e-mails that urge
6 people within Microsoft not to talk about browsers as
7 if they were separate from the operating system?
8 A I don't recall seeing any such e-mail.
9 Q Are you aware of any anybody within
10 Microsoft who has asserted, either in an e-mail or
11 otherwise, that people ought to not talk about
12 browsers as if they were separate from the operating
13 system?
14 A I don't remember any such e-mail.
15 Q Has Microsoft tried to get companies to
16 agree to statements that Internet Explorer comprises
17 part of the operating system of Windows 95 and
18 Windows 98?
19 A I know it's a true statement, but I'm
20 not aware of us doing anything to try to get anyone
21 else to endorse the statement.
22 Q You're not aware of any effort by
23 Microsoft to get non-Microsoft companies to endorse
24 the statement that Internet Explorer comprises part
25 of the operating system of Windows; is that what
499 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 you're saying?
2 A I'm not aware of such efforts.
3 Q Do you know whether Microsoft has made
4 any efforts to include language like that in any of
5 its license agreements?
6 A No, I don't.
7 Q Do you know why Microsoft might do
8 that?
9 MR. HEINER: Objection.
10 THE WITNESS: I'm not sure.
11 Q BY MR. BOIES: Do you recognize that
12 OEMs have a need to acquire the Windows operating
13 system that Microsoft licenses?
14 A What do you mean by OEM? Is it a
15 tautology because of the way you're defining it?
16 Q Well, if you take IBM and Compaq and
17 Dell, Gateway and some other companies, those are
18 commonly referred to as OEMs or PC manufacturers;
19 correct, sir?
20 A No. The term "OEM" would be quite a
21 bit broader than that. OEMs used means original
22 equipment manufacturer.
23 Q I see.
24 And does OEM have a specialized meaning
25 in your business to refer to people that supply
500 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 personal computers?
2 A No. It usually means our licensees.
3 Q And do your licensees, in part, supply
4 personal computers, sir?
5 A Some of our licensees.
6 Q The licensees to whom you license
7 Windows are suppliers of personal computers, are they
8 not, sir?
9 A If you exclude Windows CE and depending
10 on how you talk about workstations and servers.
11 Q So that if we can get on common ground,
12 the licensees for Windows 95 and Windows 98 would be
13 companies that you would recognize as personal
14 computer manufacturers; is that correct?
15 A Yeah. Almost all the licensees of
16 Windows 95 and Windows 98 are personal computer
17 manufacturers. Some are not, but the overwhelming
18 majority are.
19 Confidential Material Redacted
20 Confidential Material Redacted
21 Confidential Material Redacted
22 Confidential Material Redacted
23 Confidential Material Redacted
24 Confidential Material Redacted
25 Confidential Material Redacted
501 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Confidential Material Redacted
2 Confidential Material Redacted
3 Confidential Material Redacted
4 Confidential Material Redacted
5 Confidential Material Redacted
6 Confidential Material Redacted
7 Confidential Material Redacted
8 Confidential Material Redacted
9 Confidential Material Redacted
10 Confidential Material Redacted
11 Confidential Material Redacted
12 Confidential Material Redacted
13 Confidential Material Redacted
14 Confidential Material Redacted
15 Confidential Material Redacted
16 Confidential Material Redacted
17 Confidential Material Redacted
18 Confidential Material Redacted
19 Confidential Material Redacted
20 Confidential Material Redacted
21 Confidential Material Redacted
22 Confidential Material Redacted
23 Confidential Material Redacted
24 Confidential Material Redacted
25 Confidential Material Redacted
502 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Confidential Material Redacted
2 Confidential Material Redacted
3 Confidential Material Redacted
4 Confidential Material Redacted
5 Confidential Material Redacted
6 Confidential Material Redacted
7 Confidential Material Redacted
8 Confidential Material Redacted
9 Confidential Material Redacted
10 Confidential Material Redacted
11 Confidential Material Redacted
12 Confidential Material Redacted
13 Confidential Material Redacted
14 Confidential Material Redacted
15 Confidential Material Redacted
16 Confidential Material Redacted
17 Confidential Material Redacted
18 Confidential Material Redacted
19 Confidential Material Redacted
20 Confidential Material Redacted
21 Confidential Material Redacted
22 Confidential Material Redacted
23 Confidential Material Redacted
24 Confidential Material Redacted
25 Confidential Material Redacted
503 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Confidential Material Redacted
2 Confidential Material Redacted
3 Confidential Material Redacted
4 Confidential Material Redacted
5 Confidential Material Redacted
6 Confidential Material Redacted
7 Confidential Material Redacted
8 Confidential Material Redacted
9 Confidential Material Redacted
10 Confidential Material Redacted
11 Confidential Material Redacted
12 Confidential Material Redacted
13 Confidential Material Redacted
14 Confidential Material Redacted
15 Confidential Material Redacted
16 Confidential Material Redacted
17 Confidential Material Redacted
18 Confidential Material Redacted
19 Confidential Material Redacted
20 Confidential Material Redacted
21 Confidential Material Redacted
22 Confidential Material Redacted
23 Confidential Material Redacted
24 Confidential Material Redacted
25 Confidential Material Redacted
504 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Confidential Material Redacted
2 Confidential Material Redacted
3 Confidential Material Redacted
4 Confidential Material Redacted
5 Confidential Material Redacted
6 Confidential Material Redacted
7 Confidential Material Redacted
8 Confidential Material Redacted
9 Confidential Material Redacted
10 Confidential Material Redacted
11 Confidential Material Redacted
12 Confidential Material Redacted
13 Confidential Material Redacted
14 Confidential Material Redacted
15 Confidential Material Redacted
16 Confidential Material Redacted
17 Confidential Material Redacted
18 Confidential Material Redacted
19 MR. HEINER: Okay. We'll step out and
20 then come back in and talk about next steps.
21 MR. BOIES: Okay.
22 THE VIDEOGRAPHER: Okay. The time is
23 4:03 P.M. We're going off the record.
24
25 * * *
505 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1
2 I hereby declare, under penalty of
3 perjury, that the foregoing answers are true and
4 correct to the best of my knowledge and belief.
5 EXECUTED AT _________________, WASHINGTON,
6 this ______day of _________________, 1998.
7
8
_________________________
9 William Gates
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
506 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 STATE OF CALIFORNIA )
) ss.
2 COUNTY OF LOS ANGELES )
3
4 I, Katherine Gale, CSR 9793, a Certified
5 Shorthand Reporter in and for the State of
6 California, do hereby certify:
7 That prior to being examined, the witness named
8 in the foregoing deposition was by me duly sworn to
9 testify the truth, the whole truth, and nothing but
10 the truth;
11 That said deposition was taken before me at the
12 time and place named therein and was thereafter
13 reduced to typewriting under my supervision; that
14 this transcript is a true record of the testimony
15 given by the witness and contains a full, true and
16 correct report of the proceedings which took place at
17 the time and place set forth in the caption hereto as
18 shown by my original stenographic notes.
19 I further certify that I have no
20 interest in the event of the action.
21 EXECUTED this 30th day of August, 1998.
22
23
____________________________
24 Katherine Gale, CSR #9793
25
507
BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900




Released Pursuant to 15 U.S.C. §30

10.12.20

Transcripts of Bill Gates’ Lies: Part II

Posted in Antitrust, Bill Gates, Courtroom, Microsoft at 4:55 pm by Dr. Roy Schestowitz

Part 2 (of a total of 4)

Gates deposition 1998

Summary: Techrights is curating and maintaining plain text versions of the Gates deposition of 1998, in which years if not decades of the company’s abuses were scrutinised in a face-to-face fashion

Previous parts: Part I

Videos of the deposition: First part, second part, third part, fourth part, fifth part, sixth part, seventh part, eighth part, ninth part, tenth part, eleventh part, and last part

Selected transcripts of the deposition: Few annotated transcripts and longer transcripts



1 IN THE UNITED STATES DISTRICT COURT
2 FOR THE DISTRICT OF COLUMBIA
3
4
5 UNITED STATES OF AMERICA, )
)
6 Plaintiff, )
)
7 vs. ) No. CIV 98-1232(TPJ)
)
8 MICROSOFT CORPORATION, ) VOLUME II
) (Morning Session)
9 Defendant. )
) CONFIDENTIAL
10 )
11
12
13 CONTINUATION OF THE DEPOSITION OF
14 BILL GATES, a witness herein, taken on behalf of the
15 plaintiffs at 9:09 a.m., Friday, August 28, 1998, at
16 One Microsoft Way, Redmond, Washington, before
17 Kathleen E. Barney, CSR, pursuant to Subpoena.
18
19
20
21
22
23 REPORTED BY:
Kathleen E. Barney,
24 CSR No. 5698
Our File No. 1-49006
25

1 APPEARANCES OF COUNSEL:
2 FOR THE UNITED STATES OF AMERICA:
3 UNITED STATES DEPARTMENT OF JUSTICE
BY PHILLIP R. MALONE
4 KARMA M. GIULIANELLI
450 Golden Gate Avenue
5 Box 36046
San Francisco, California 94102
6 (415) 436-6660

7 BOIES & SCHILLER LLP
BY DAVID BOIES
8 80 Business Park Drive
Armonk, New York 10504-1710
9 (914) 273-9800
10 FOR MICROSOFT CORPORATION:
11 MICROSOFT CORPORATION
LAW AND CORPORATE AFFAIRS
12 BY DAVID A. HEINER
WILLIAM H. NEUKOM
13 One Microsoft Way
Redmond, Washington 98052
14 (425) 936-3103
15 SULLIVAN & CROMWELL
BY RICHARD J. UROWSKY
16 125 Broad Street
New York, New York 10004
17 (212) 558-3546
18
FOR THE PLAINTIFF STATES:
19 STATE OF NEW YORK
20 OFFICE OF ATTORNEY GENERAL
BY STEPHEN D. HOUCK
21 GAIL P. CLEARY
THEODORE ZANG
22 120 Broadway
New York, New York 10271-0332
23 (212) 416-8275
24 ALSO PRESENT: PRISCILLA ALVAREZ, Paralegal
MICHEL CARTER, Video Operator
25
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900




1
2 I N D E X
3 WITNESS EXAMINATION BY PAGE
4 Bill Gates Mr. Boies 279
5
6
GOVERNMENT
7 EXHIBITS:
8 365 E-mail from Bill Gates to Paul 299
Maritz
9
366 E-mail from Don Bradford to Ben 310
10 Waldman
11 367 E-mail from Ben Waldman to Greg 315
Maffei
12
368 E-mail from Bill Gates to Ben 316
13 Waldman
14 369 Series of e-mails, the first of 327
which is from Joachim Kempin to
15 Bill Gates
16 370 E-mail from Don Bradford to various 350
people
17
371 Series of e-mails, the first of 354
18 which is from Paul Maritz to Bill
Gates and Bob Muglia
19
20
21
22
23
24
25
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 BILL GATES,
2 a witness herein, having been duly sworn, was deposed
3 and testified further as follows:
4
5 EXAMINATION (Continued)
6 BY MR. BOIES:
7 Q. Good morning, Mr. Gates.
8 Are you going to be a witness at the
9 trial of this matter?
10 MR. HEINER: Objection.
11 THE WITNESS: I don't know.
12 Q. BY MR. BOIES: Do you intend to be a
13 witness at the trial of this matter?
14 MR. HEINER: Objection to this line of
15 questioning. The witness list comes out next week
16 and there is a court order in place on this.
17 MR. BOIES: I'm entitled to ask the
18 witness whether he intends to appear at trial. You
19 people have certainly done that with witnesses. I
20 think it is a common question. If you instruct him
21 not to answer, you can instruct him not to answer.
22 MR. HEINER: I haven't done that. I've
23 posed an objection.
24 Q. BY MR. BOIES: Do you intend to be a
25 witness at trial?
279
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 A. I don't know.
2 Q. All right.
3 MR. BOIES: And the purpose, obviously,
4 was because if we knew whether he was going to be a
5 witness at trial, that might shorten and change the
6 examination. It's a common question. I don't know
7 why you object to it.
8 Q. Mr. Gates, when did you first become
9 concerned about the competitive threat that Netscape
10 posed to Microsoft?
11 A. I know by late '95 we were thinking of
12 Netscape as one of our many competitors, so I think
13 it would have been around then.
14 Q. When did you first become concerned
15 about the competitive threat that Java posed to
16 Microsoft?
17 A. Well, Java as a computer language does
18 not pose a competitive threat to Microsoft. There is
19 some runtime work that various people, companies are
20 doing with different APIs, including Sun, that
21 represent platform competition. So you have to be
22 careful about how you talk about Java.
23 Q. Do you talk about Java as a competitive
24 threat to Microsoft, Mr. Gates?
25 A. There's a lot of documents and
280
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 understanding inside Microsoft that Java the
2 language, which if you take the term Java on the face
3 of it and then in some context that it refers to,
4 that that is not a competitive threat. In fact, we
5 are the leading vendor of Java language development
6 tools. Sometimes in the right context when people
7 use that term, they're talking about various runtime
8 activities. But, you know, you have to look pretty
9 carefully at the context.
10 Q. My question right now doesn't go to
11 what various people within Microsoft have said or
12 believe. My question goes to what you have said. Do
13 you refer -- have you referred to Java as a
14 competitive threat to Microsoft?
15 A. The Java runtime activities are a
16 competitive threat to Microsoft. Java itself is not.
17 So if I use the term Java that way, I'm careful to
18 make sure people know I'm talking about the runtime
19 piece.
20 Q. Have you sometimes as a shorthand
21 referred to Java, as opposed to what you now say as
22 the Java runtime activities, as a competitive threat
23 to Microsoft?
24 A. I may have if I made it clear what I
25 meant.
281
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. And by making it clear what you meant,
2 can you explain what you mean by that?
3 A. To draw the distinction between Java
4 the language and the runtime activities around Java,
5 the APIs being created there by various companies.
6 Q. Have you received e-mail from people
7 that described Java as a competitive threat to
8 Microsoft?
9 A. Well, inside Microsoft the context of
10 the various pieces of Java, including in a lot more
11 detail than I've had a chance to explain to you so
12 far, is well understood. And so we use a lot of
13 shorthands for a lot of things that confuse people
14 who just look at the e-mails.
15 MR. BOIES: Can I have the question
16 read back, please.
17 (Record read.)
18 THE WITNESS: Under the scenario I
19 described, it's possible that people would do that in
20 e-mail.
21 Q. BY MR. BOIES: When you say "under the
22 scenario that I described," what scenario are you
23 talking about?
24 A. The scenario is people inside Microsoft
25 who have an understanding of the various pieces of
282
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Java who are communicating with each other.
2 Q. Let me try to be clear. My question
3 does not encompass any scenario. My question is
4 simply have you received e-mail from people within
5 Microsoft that described Java as a competitive threat
6 or assert that Java is a competitive threat to
7 Microsoft?
8 MR. HEINER: Objection. You have a
9 very full answer, precise and clear, to that
10 question. The witness may answer again.
11 THE WITNESS: Yeah, I've described the
12 circumstances under which it's possible I've gotten
13 an e-mail like that.
14 Q. BY MR. BOIES: My question is not what
15 are the circumstances under which it is possible that
16 that happened. My question is have you received
17 e-mail from people in Microsoft that assert that Java
18 is a competitive threat to Microsoft?
19 A. It's possible there is someone who,
20 having the right context about the pieces that are
21 entailed in Java, may have used that as a shorthand
22 for the piece we consider a competitive threat.
23 Q. My question is not what is possible but
24 what you recall. If you don't recall ever receiving
25 an e-mail in which somebody from Microsoft asserted
283
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 that Java was a competitive threat, that's an answer
2 to my question. You can say "Yes," "No," "I don't
3 recall," but --
4 A. I don't recall a specific piece of
5 mail. I think there is a good chance I've received
6 mail where somebody used that kind of shorthand.
7 Q. Now, have you used that kind of
8 shorthand, that is, have you personally asserted that
9 Java is a competitive threat to Microsoft?
10 A. Well, I always object to -- you're
11 acting like the assertion stands by itself. There is
12 a shorthand that I've told you about, so no, I've
13 never asserted that statement. We use the term Java
14 in a variety of contexts and if you want to show me a
15 context, I'll answer. But the assertion on the face
16 of it is wrong unless somebody is using the term Java
17 in a very special way.
18 Q. What I'm asking you, Mr. Gates, is
19 whether you have used Java in what you described as
20 the very special way to refer, as a shorthand, to
21 whatever it is that you believe constitutes a
22 competitive threat to Microsoft?
23 A. I don't remember a specific document
24 where I did, but I think it's quite likely that with
25 certain people I used that shorthand.
284
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. Okay. When you use Java as a shorthand
2 in describing Java as a competitive threat to
3 Microsoft, am I to understand that what you mean in
4 that context is to refer to what you have described
5 here as the Java runtime activities?
6 A. If you want to get into what we mean by
7 the shorthand, you'll have to show me a specific
8 context because sometimes it might mean EJB,
9 sometimes it might just mean the VM, sometimes it
10 might mean AWT, sometimes it might mean JFC. I mean
11 I'll be glad to clarify any particular case. You
12 have to have the context.
13 Q. If necessary we'll go through each one
14 context by context, although that's obviously a
15 lengthy procedure, but let me see if I can try to get
16 some general principles.
17 When you refer to Java as a competitive
18 threat to Microsoft, what do you mean?
19 A. I've told you it depends on the
20 context.
21 Q. Why don't you list each of the
22 different things that you mean when you describe Java
23 as a competitive threat to Microsoft.
24 A. I don't know what you mean. You're
25 asking me to recall every context where I might have
285
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 ever used that shorthand?
2 Q. Well, I'm asking you to tell me every
3 context that you do recall.
4 A. I've told you I don't recall any
5 specific document where I've used the shorthand. I
6 can give you several contexts where it's very likely
7 that I have.
8 Q. If that's the best you can do, let's
9 start with that.
10 A. Well, there's the context of server
11 middleware APIs and EJB discussion. And people who
12 write three-tier applications, what APIs are they
13 likely to develop their applications against.
14 Q. And why does Java, in your view,
15 represent a competitive threat to Microsoft with
16 respect to server middleware or EJBs?
17 A. I've told you that Java itself is not
18 the competitive threat. I'm telling you the thing
19 that is the competitive threat, so when you rephrase
20 it to say Java is the competitive threat, that's just
21 the shorthand term. The competitive threat is the
22 APIs and the EJB and the other middleware layers that
23 people are putting together.
24 Q. Well, Mr. Gates, in your view does Java
25 play, itself, any role in what you view as a
286
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 competitive threat to Microsoft?
2 A. Java the language?
3 Q. Yes, let's start with Java the
4 language.
5 A. No.
6 Q. When you refer to Java as a competitive
7 threat, why do you use the word Java as shorthand for
8 what you now say doesn't relate to Java?
9 MR. HEINER: Objection.
10 THE WITNESS: I didn't say that. It
11 certainly relates to Java. Java runtime relates to
12 Java. I mean give me a break.
13 MR. BOIES: Move to strike the answer
14 as nonresponsive.
15 MR. HEINER: Objection to the question
16 as grossly misstating the prior testimony.
17 MR. BOIES: You can object all you
18 want, but if your object is to get this deposition
19 over with, I would suggest that you make your
20 objections before the question and not as a speech to
21 try to support the witness after the witness begins
22 to engage in that kind of colloquy.
23 MR. HEINER: It certainly was a short
24 speech, wasn't it?
25 Q. BY MR. BOIES: Mr. Gates, you know
287
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 perfectly well that you and lots of other people
2 within Microsoft describe Java, J-a-v-a, without
3 talking about runtimes or EJBs or server middleware,
4 but Java, J-a-v-a, as a competitive threat. You know
5 that, don't you?
6 A. I've told you that when we talk about
7 the Java runtime threat, we often use Java as a
8 shorthand for that. We haven't come up with another
9 term for the Java runtime competitive threat in its
10 various forms.
11 Q. When did you first become concerned
12 about the Java runtime threat to Microsoft?
13 A. Well, there have been a lot of changes
14 in the strategies of Sun and various people. I know
15 there was talk about Java in the second half of '95
16 but, you know, I don't think we really understood
17 what the various people around were doing. Sometime
18 in '96 when Sun was doing its promotion of writing
19 applications strictly to the Java runtime, to their
20 Java runtime, which is one of them, and in fact they
21 have multiple, then we would have looked at that as
22 something we needed to understand and decide how it
23 affected our strategy.
24 Q. My question is not when you decided you
25 needed to look at Java to decide something. My
288
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 question is when did you first conclude that what you
2 have referred to as the Java runtime threat was a
3 competitive threat to Microsoft?
4 MR. HEINER: Objection.
5 THE WITNESS: Well, it gets a little
6 complicated because there's some even runtime pieces
7 of Java that we support, but there are some things
8 that people are doing in those runtimes that we have
9 a different approach. But that's all, you know, more
10 recent in terms of understanding how -- what our
11 products are going to do.
12 Q. BY MR. BOIES: My question is when did
13 you first conclude that what you have described as
14 the Java runtime threat was a competitive threat to
15 Microsoft?
16 A. I think there was a lot of discussion
17 about what to do with Java and Java runtime things
18 and there was a part of what Sun was doing that by
19 late '96 we had decided not -- there were some
20 extensions they were doing in late '96 that we
21 thought of as competitive.
22 Q. Do I understand that last answer to be
23 that it would not have been until late 1996 that you
24 considered what you have described as the Java
25 runtime threat as a competitive threat to Microsoft?
289
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 A. Well, you use the word "conclude" and
2 there's a long period of time where there is a lot of
3 thinking about Java runtime inside Microsoft where
4 people are going back and forth. And some people
5 will say hey, this is fine, it's not competitive and
6 then somebody would say hey, maybe it is competitive.
7 So there's a lot of going back and forth. So when
8 you use the term "conclude," I assume you're talking
9 about a point at which there is a clear opinion and
10 not just a lot of debate, you know, even -- you know,
11 my view being established. And so then I think
12 you've got to go as late as late '96 before there's
13 much clarity at all.
14 Q. I think you may have answered the
15 question, but I want to be sure because my question
16 relates not to what other people were saying within
17 Microsoft but what you believed. And what I'm trying
18 to find out is when you, Bill Gates, first believed
19 that what you have described as the Java runtime
20 threat was a competitive threat to Microsoft?
21 A. Well, you used the word "conclude"
22 and --
23 Q. Actually, in this last question I used
24 the word "believe."
25 A. So you're changing the question?
290
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. Well, if believe and conclude is
2 different for you, I'll ask it both ways.
3 A. Yeah, it's very different. In late --
4 Q. Then let me ask the question so the
5 record is clear what you're answering.
6 A. You don't want to let me answer the
7 last one?
8 Q. If that's what you're going to answer,
9 let's read the question back.
10 Would you reincorporate the question so
11 the record is clear that what follows is intended to
12 be a response to this particular question.
13 (The record was read as follows:
14 "Q. I think you may have answered
15 the question but I want to be sure because my
16 question relates not to what other people were
17 saying within Microsoft but what you believed.
18 And what I'm trying to find out is when you,
19 Bill Gates, first believed that what you have
20 described as the Java runtime threat was a
21 competitive threat to Microsoft?")
22 THE WITNESS: In the first part of '96
23 there were -- I was getting a lot of different
24 opinions about Java runtime and what Sun was doing
25 and what we should do. I wouldn't say that I
291
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 believed firmly that it was a competitive threat
2 because that all depended on what Sun was doing, what
3 other companies were doing, and what we were going to
4 do. By late '96 I think we had -- or I had a view
5 that what Sun was doing was a competitive activity.
6 Q. BY MR. BOIES: When you talk about
7 having a view that what Sun was doing was a
8 competitive activity, do you use the term "activity"
9 to mean the same thing that you meant before when you
10 used the term "threat"?
11 A. You were the one who used the term
12 "threat." I'm not quite sure. It was competitive.
13 Is something that is competitive always a competitive
14 threat? I'm not sure.
15 Q. Mr. Gates, I think the record will
16 show, and if necessary we can go back to it, that you
17 used the term "Java runtime threat." Do you recall
18 doing that?
19 A. Yes.
20 Q. Okay. Now --
21 A. That's not the same as competitive
22 threat.
23 Q. Well, when you used the Java runtime
24 threat phrase, what did you mean by threat?
25 A. I meant that it was competitive.
292
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. And so you were using, in that context,
2 threat and competitive to mean the same thing?
3 A. Yes.
4 Q. Okay. Now, using threat in the same
5 sense that you were using it to mean competitive, I
6 want to ask what you said was the different question
7 from what you believed. When did you conclude that
8 the Java runtime threat was a competitive threat to
9 Microsoft?
10 A. By late '96 I thought of it as
11 competitive.
12 Q. And when you use the word "thought"
13 there, are you using it to mean what you have said
14 you meant by believe as well as what you said you
15 meant by conclude?
16 A. I mean by then it was pretty clear to
17 me it was another thing we had to think of in terms
18 of the list of the competitors, as opposed to earlier
19 where I wasn't sure of that.
20 Q. What did you do to try to respond to
21 what you have described as the Java runtime threat?
22 A. The same thing we always do, just
23 innovate in our products and use the customer
24 feedback to delight them so that they choose to
25 license our products.
293
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. Did you do anything else to try to
2 respond to what you described as the Java runtime
3 threat?
4 A. Well, we try to understand from
5 customers what they're doing and how our strategy
6 might appeal versus someone else's strategy and then
7 go back and look at our strategy to see if we can
8 make it better.
9 Q. Did you do anything else?
10 A. I'm not sure what you mean. I mean our
11 whole activity here, everything we do really comes
12 under what I just described.
13 Q. Everything Microsoft does comes under
14 what you've described; is that your testimony, sir?
15 A. Uh-huh.
16 Q. Well, sir, does trying to undermine Sun
17 come within the activity that you've just described?
18 MR. HEINER: Objection.
19 THE WITNESS: I don't know what you
20 mean by that.
21 Q. BY MR. BOIES: You don't?
22 A. No.
23 Q. Have you ever had discussions within
24 Microsoft about the desirability of trying to
25 undermine Sun because of what Sun was doing in Java?
294
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 A. I said to you part of our activity is
2 to go out and work with customers to see what it
3 takes to have them choose to license our products.
4 And that's in competition with many other companies,
5 including Sun.
6 MR. BOIES: Would you read back the
7 question, please.
8 (Record read.)
9 THE WITNESS: We've certainly had
10 discussions about making our products better than
11 Sun's and other competitors in any area that people
12 might think of them as desirable.
13 MR. BOIES: Would you read the question
14 back, please.
15 (Record read.)
16 MR. HEINER: Mr. Gates, there is no
17 question pending now. Mr. Boies is having the court
18 reporter read back repeatedly the same question, but
19 there is no question actually pending at the moment.
20 MR. BOIES: The question that was read
21 back is pending, Mr. Heiner.
22 THE WITNESS: I answered that question.
23 MR. BOIES: Would you read back the
24 question and the answer.
25 (The record was read as follows:
295
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 "Q. Have you ever had discussions
2 within Microsoft about the desirability of
3 trying to undermine Sun because of what Sun
4 was doing in Java?
5 A. I said to you part of our activity
6 is to go out and work with customers to see
7 what it takes to have them choose to license
8 our products. And that's in competition with
9 many other companies, including Sun.")
10 Q. BY MR. BOIES: I'm not now talking
11 about what you do in competition with other products
12 or other companies. What I'm talking about is
13 whether or not you've had discussions with people
14 within Microsoft in which you talked about the need
15 to undermine Sun, using those words, if that will
16 help you, within Microsoft?
17 A. I don't remember using those words.
18 Q. You don't?
19 A. No.
20 Q. Do you think you did use those words or
21 you just don't know one way or the other?
22 A. I don't know.
23 Q. Would it be consistent with the way you
24 felt about Java for you to have told people that you
25 wanted to undermine Sun?
296
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 A. As I've said, anything about Java
2 you've got to show me a context before I can answer
3 because just the term Java itself can mean different
4 things.
5 Q. Well, let me try to approach it this
6 way, Mr. Gates. Have you ever told anyone,
7 regardless of what you meant by it, that you wanted
8 to undermine Java or undermine Sun or undermine Java
9 because of Sun, any of those?
10 MR. HEINER: And to be completely
11 precise, the actual question is merely whether the
12 witness recalls using that particular word,
13 regardless of meaning, just that word?
14 MR. BOIES: Yes. And if he does
15 recall, I'll ask him what he meant by it.
16 MR. HEINER: I understand.
17 THE WITNESS: I said I don't recall
18 using that word.
19 Q. BY MR. BOIES: Would it have been
20 consistent with the way that you felt about Sun and
21 about Java for you to have used that word?
22 And if you don't understand the
23 question, I'll rephrase it.
24 A. Well, Sun's message to the market and
25 ours aren't the same and so there is, as part of that
297
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 competition, a desire to get people to understand our
2 message and what we're providing versus their message
3 and what they're providing. So in that sense there
4 could have been a discussion around that topic. But
5 I still don't know if the word "undermine" was ever
6 used.
7 Q. Did you have discussions with Apple
8 that were directed towards attempting to reduce or
9 eliminate competition, Mr. Gates?
10 MR. HEINER: Objection.
11 THE WITNESS: No.
12 Q. BY MR. BOIES: Did you have discussions
13 with Apple in which you were trying to get Apple to
14 agree to help you undermine Sun?
15 A. There was some discussion about what
16 runtime APIs Apple would support, whether they would
17 support some of ours or some of Sun's. I don't think
18 I was involved in any discussions myself with Apple
19 about that.
20 Q. Well, let me show you a document and
21 try to probe what you mean by being involved. Let me
22 give you a copy of a document that has been
23 previously marked as Government Exhibit 365.
24 A portion of this document is an e-mail
25 message from you to Paul Maritz and others and the
298
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 portion I'm particularly interested in, and you can
2 read as much of the three-line e-mail as you wish, is
3 the last sentence, which reads, "Do we have a clear
4 plan on what we want Apple to do to undermine Sun?"
5 Did you send this e-mail, Mr. Gates,
6 on or about August 8, 1997?
7 A. I don't remember sending it.
8 (The document referred to was marked
9 by the court reporter as Government Exhibit 365 for
10 identification and is attached hereto.)
11 Q. BY MR. BOIES: Do you have any doubt
12 that you sent it?
13 A. No. It appears to be an e-mail I sent.
14 Q. You recognize that this is a document
15 produced from Microsoft's files, do you not, sir?
16 A. No.
17 Q. You don't?
18 A. Well, how would I know that?
19 Q. Do you see the document production
20 numbers down at the bottom?
21 A. I have no idea what those numbers are.
22 Q. Do you recognize this as the form in
23 which e-mail has been printed out by Microsoft?
24 A. I don't know what that means. It's --
25 all e-mail printed by anyone looks just like this, so
299
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 the fact that it looks like this doesn't give you any
2 clue as to who printed it.
3 Q. Let's begin with that, sir. E-mail
4 printed out by other people are not stamped with
5 Microsoft confidential stamps and Microsoft document
6 production numbers; you would agree with that, would
7 you not?
8 A. That has nothing to do with printing
9 out.
10 Q. Do you understand my question, sir?
11 A. No.
12 Q. Do you see down at the bottom where
13 there are confidential stamps and a stamp that says
14 "Attorneys Only" and document production stamps? Do
15 you see those?
16 A. I see the stamps. I can't characterize
17 whether they're document production stamps. To me
18 they look more like what you'd see on a prisoner's
19 uniform.
20 Q. So that you don't have any knowledge
21 about these stamps; is that your testimony?
22 A. I've never seen a stamp like that.
23 I've used a stamp like that.
24 Q. Haven't you seen stamps like that on
25 every single one of the documents you've been shown
300
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 during this deposition?
2 A. Can you get me all the exhibits?
3 MR. NEUKOM: Is this a good use of
4 time, Counsel?
5 MR. BOIES: Well, when he says he has
6 never seen them before --
7 THE WITNESS: You asked about this
8 stamp.
9 MR. BOIES: -- and, you know, that he
10 has never seen the stamp before and he's been shown
11 40 documents --
12 MR. NEUKOM: It's just a waste of time.
13 MR. BOIES: It is a waste of time. And
14 I think it's absolutely clear who the witness is --
15 MR. NEUKON: Let's get on with it and
16 have a deposition, shall we?
17 MR. BOIES: We're trying to have a
18 deposition.
19 THE WITNESS: Can we look at that one?
20 Q. BY MR. BOIES: Yes. The one that has
21 this document production stamp and the confidential
22 stamp in the bottom right-hand corner; is that the
23 one you mean, Mr. Gates?
24 A. Is that a stamp? To me that's not a
25 stamp.
301
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 MR. HEINER: Let's move on.
2 MR. BOIES: Mr. Heiner, I understand
3 why you want to move on.
4 MR. HEINER: Relax, relax. There must
5 be some way to break through.
6 MR. BOIES: I think there must be.
7 MR. HEINER: Let's try a different
8 question.
9 MR. BOIES: I think there must be, but
10 part of what I want to do is I want to get on the
11 record the way this witness answers questions. I
12 think I'm entitled to do that.
13 MR. HEINER: The witness already
14 testified that this appears to be an e-mail he sent,
15 but he doesn't recall sending it. That's what you
16 need, that's what you have. He's not familiar with
17 the discovery process of some paralegal. That's the
18 testimony right now. And that's not important.
19 MR. BOIES: Part of the testimony was
20 he had never seen the stamp before when he's seen it
21 40 times in this deposition. And I think that goes
22 to this witness's credibility and I think this
23 witness's credibility is an important issue in this
24 case.
25 MR. HEINER: You don't care about
302
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 stamps.
2 MR. BOIES: I don't care about stamps.
3 What I care about is credibility and whether the
4 witness is being forthright in his answers and I
5 think I'm entitled to test that when he says things
6 that are as remarkable as the fact that he has never
7 seen a document production stamp like this before in
8 this case after how long the case has gone on.
9 MR. HEINER: You're not going to stand
10 up in court and talk about stamps.
11 MR. BOIES: You're probably right about
12 that.
13 Q. Let me go back to the e-mail,
14 Mr. Gates. What did you mean when you asked
15 Mr. Maritz whether or not, "We have a clear plan on
16 what we want Apple to do to undermine Sun"?
17 A. I don't remember.
18 Q. Did you personally participate in any
19 conversations with Apple in 1997 and 1998?
20 A. Of any kind?
21 Q. Let me be a little more specific. Did
22 you participate in any conversations with Apple in
23 1997 or 1998 concerning what Apple would or would not
24 do that would affect Microsoft competitively?
25 A. Well, there were some conversations
303
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 with Steve Jobs about Microsoft Office and some --
2 and a relationship we formed around that and some
3 other issues.
4 Q. And did you participate in those
5 conversations?
6 A. I talked to Steve Jobs on the phone
7 I think twice.
8 Q. And what was the nature of your
9 conversations with Mr. Jobs?
10 A. Well, Steve had -- Steve called me up
11 and said that he had become the CEO of Apple, sort
12 of, and that Gil Amelio wasn't the CEO of Apple. And
13 he raised the question of was there some beneficial
14 agreement that we could enter into different than
15 we'd been discussing with Gil. And it wasn't a very
16 long call and the conclusion was that Greg Maffei
17 would go see Steve.
18 Q. What is Mr. Maffei's title?
19 A. At that time?
20 Q. What is his title today?
21 A. His title today is CFO.
22 Q. Of Microsoft?
23 A. Uh-huh.
24 Q. Chief financial officer?
25 A. Uh-huh.
304
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. And what was his title at the time?
2 A. I think treasurer.
3 Q. When did Mr. Maffei go to talk to
4 Mr. Jobs?
5 A. I don't recall the date.
6 Q. Approximately?
7 A. Sometime in '97.
8 Q. This was after your conversation with
9 Mr. Jobs?
10 A. Yes.
11 Q. Did you have any conversation with
12 Mr. Jobs or anyone else at Apple after your 1997
13 conversation with Mr. Jobs?
14 A. I had a brief conversation with him
15 again in '97 the night before a Mac World speech that
16 he was giving where I appeared as part of that
17 speech. But it was about my role in his speech.
18 Q. I'm going to leave that aside.
19 A. Well, it all relates to the agreement
20 with Apple.
21 Q. Okay, then I won't leave it aside.
22 What did you say to him and what did he say to you
23 about the agreement with Apple?
24 A. I said, "It's not signed yet. What are
25 we going to do about this presentation if it doesn't
305
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 get signed?" And he said he hoped it would be
2 signed. And then we talked about the logistics of
3 appearing by video conference in the middle of his
4 speech.
5 Q. Have you completed your answer?
6 A. Yes.
7 Q. Other than the two telephone -- or I
8 guess one telephone conversation and one in person --
9 was the brief conversation you've just recounted the
10 one in person?
11 A. No, that was on the phone. He was in
12 Boston, I was in Seattle. That's why I had to do a
13 video conference to be in his speech.
14 Q. So both of your conversations with
15 Mr. Jobs in 1997 were by telephone; is that correct?
16 A. There may have also been some e-mail
17 between Steve and I. I don't think there were any
18 more phone calls, but the two I described were both
19 phone calls. There were no face-to-face meetings
20 that I remember.
21 Q. Other than the two telephone calls and
22 leaving e-mail aside, did you have any conversations
23 either by telephone or in person with any
24 representative of Microsoft in 1997 or 1998?
25 A. Yes.
306
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 MR. HOUCK: You misspoke. You said
2 Microsoft and I think you meant Apple.
3 Q. BY MR. BOIES: Other than the two
4 telephone conversations with Mr. Jobs that you have
5 already identified, during 1997 or 1998 did you have
6 any conversations by telephone or in person with any
7 representative of Apple?
8 A. I'm trying to think when Heidi Roizen
9 quit Apple. I think she quit by '97, but I'm not
10 sure. Yeah, I'm pretty sure she quit by then, so no,
11 I don't think so.
12 Q. Do I take it from that answer that you
13 had a conversation with Heidi Roizen?
14 A. At some point in time that I can't
15 remember, yes.
16 Q. And do I also take it that at some
17 point Heidi Roizen left Apple?
18 A. That's right.
19 Q. And that your conversation with Heidi
20 Roizen was while she was at Apple?
21 A. Not all of my conversations with her,
22 but the ones that I thought would be responsive to
23 your questions related to the time of her employ at
24 Apple. I've had other conversations with Heidi
25 Roizen both before she worked at Apple and after she
307
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 worked at Apple.
2 Q. Where does she now work?
3 A. She doesn't have a job at this point.
4 Q. Other than your possible conversations
5 during the period with Heidi Roizen and the two
6 telephone conversations in 1997 with Mr. Jobs, did
7 you have any other conversations either by telephone
8 or in person with any representative of Apple in 1997
9 or 1998?
10 A. No, I don't think so.
11 Q. To your knowledge, did any
12 representative of Microsoft have any meetings or
13 telephonic discussions --
14 A. Certainly.
15 Q. -- with any representatives of Apple --
16 A. Certainly.
17 Q. -- in 1998 concerning competitive
18 issues?
19 A. I don't know what you mean by
20 "competitive issues," but there is an ongoing contact
21 with Apple. We're the largest developer of software
22 for the Apple Macintosh and so there is constant
23 discussion with Apple.
24 Q. And as the largest developer of
25 software for the Macintosh, is what you do important
308
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 to Apple?
2 A. Sometimes it doesn't seem like it. We
3 always think of it as important, but sometimes they
4 don't treat it that way, sometimes they do.
5 Q. You mentioned discussions with respect
6 to Office. Would you explain for the record what
7 you're talking about there.
8 A. Microsoft Office.
9 Q. Microsoft Office for Macintosh?
10 A. Yes.
11 Q. And was it your understanding that
12 Microsoft Office for Macintosh was believed by Apple
13 to be very important to them?
14 A. I really have a hard time testifying
15 about the belief of a corporation. I really don't
16 know what that means.
17 Q. Well, sir, in making the decisions as
18 to what you would ask of Apple, did you believe that
19 what you were offering Apple with respect to
20 Microsoft Office for Macintosh was important enough
21 to Apple so that they ought to give you something for
22 it?
23 A. I have no idea what you're talking
24 about when you say "ask."
25 Q. Well, let me show you a document that
309
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 has been previously marked as Government Exhibit 366.
2 This is a document bearing Microsoft document
3 production stamps MS98 0110952 through 53.
4 (The document referred to was marked
5 by the court reporter as Government Exhibit 366 for
6 identification and is attached hereto.)
7 Q. BY MR. BOIES: The first part of this
8 purports to be a copy of an e-mail from Don Bradford
9 to Ben Waldman with a copy to you, Mr. Maritz and
10 others on the subject of "Java on Macintosh/IE
11 Control."
12 Did you receive a copy of this e-mail
13 on or about February 13, 1998?
14 A. I don't know.
15 Q. Do you have any reason to doubt that
16 you received a copy of this e-mail?
17 A. No.
18 Q. The first paragraph reads, "Apple wants
19 to keep both Netscape and Microsoft developing
20 browsers for Mac -- believing if one drops out, the
21 other will lose interest (and also not really wanting
22 to pick up the development burden.) Getting Apple to
23 do anything that significantly/materially
24 disadvantages Netscape will be tough. Do agree that
25 Apple should be meeting the spirit of our cross
310
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 license agreement and that MacOffice is the perfect
2 club to use on them."
3 Do you have an understanding of what
4 Mr. Bradford means when he refers to MacOffice as
5 "the perfect club to use on Apple"?
6 A. No.
7 Q. The second sentence of that paragraph,
8 the one that reads, "Getting Apple to do anything
9 that significantly/materially disadvantages Netscape
10 will be tough." Was it your understanding in
11 February of 1998 that Microsoft was trying to get
12 Apple to do something to disadvantage Netscape?
13 A. No.
14 Q. Do you know why Mr. Bradford would have
15 written this in February of 1998 and sent a copy to
16 you?
17 A. I'm not sure.
18 Q. Did you ever say to Mr. Bradford in
19 words or substance in February of 1998 or thereafter,
20 "Mr. Bradford, you've got it wrong, we're not out to
21 significantly or materially disadvantage Netscape
22 through Apple"?
23 A. No.
24 Q. Did you ever tell Mr. Bradford or
25 anyone else in February, 1998 or thereafter, that
311
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 they should not be trying to get Apple to do things
2 that would significantly or materially disadvantage
3 Netscape?
4 A. No.
5 Q. What was Mr. Bradford's position in
6 February of 1998?
7 A. I think he had a small group in
8 California that worked -- I'm not sure who he worked
9 for. He probably worked for somebody who worked for
10 Silverberg or -- no. No, I'm not sure who he worked
11 for.
12 Q. Let's begin with what company he worked
13 for. He clearly worked for Microsoft; correct, sir?
14 A. That's right.
15 Q. Do you know what his title was?
16 A. No.
17 Q. Do you know who Mr. Waldman is?
18 A. Yes.
19 Q. What was his title in February of 1998?
20 A. I don't know.
21 Q. What were his responsibilities in
22 February of 1998?
23 A. He was -- he ran a group that was doing
24 Macintosh software.
25 Neither of these guys have a title like
312
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 vice-president. That I can say for sure. They have
2 a title like engineer or software engineer, software
3 engineer manager, but I don't know their titles.
4 They're not executives.
5 Q. In addition to you and Mr. Maritz,
6 copies of this go to David Cole, Dave Reed, Charles
7 Fitzgerald and Jon DeVaan. Do you know what
8 Mr. Cole's position was in 1998?
9 A. Yes.
10 Q. What was it?
11 A. He was the VP -- actually, I don't know
12 VP of what, but he was a VP working for -- I don't
13 know if we reorganized by then. He was in Maritz's
14 organization somewhere.
15 Q. What was Mr. Reed's position at that
16 time?
17 A. I have no familiarity with Mr. Reed.
18 Q. Do you have any familiarity with
19 Mr. Fitzgerald and Mr. DeVaan?
20 A. Yes.
21 Q. What were their positions?
22 A. Charles Fitzgerald was in the
23 evangelism group working for Todd Nielson.
24 Q. And Mr. DeVaan?
25 A. Mr. DeVaan was managing the overall
313
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Office development.
2 Q. Did you have any conversations with
3 anyone within Microsoft as to what position Microsoft
4 should take with Apple in terms of what Microsoft
5 should ask Apple for in return for Microsoft
6 developing Mac Office?
7 A. What time frame are you in?
8 Q. 1997 or 1998.
9 A. Well, it actually makes a big
10 difference. We reached an agreement with Apple in
11 1997 and there's no -- I'm not aware of any agreement
12 other than the 1997 one.
13 MR. BOIES: Could I have the question
14 read back.
15 (The record was read as follows:
16 "Q. Did you have any conversations
17 with anyone within Microsoft as to what
18 position Microsoft should take with Apple in
19 terms of what Microsoft should ask Apple for
20 in return for Microsoft developing Mac
21 Office?")
22 THE WITNESS: I'm not sure what you're
23 saying about Mac Office. We developed Mac Office
24 because it's a profitable business for us.
25 Q. BY MR. BOIES: Well, you threatened to
314
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 cancel Mac Office, did you not, sir?
2 A. No.
3 Q. You never threatened Apple that you
4 were going to cancel Mac Office; is that your
5 testimony?
6 A. That's right.
7 Q. Did you ever discuss within Microsoft
8 threatening Apple that you were going to cancel Mac
9 Office?
10 A. You wouldn't cancel -- no.
11 Q. Let me show you a copy of a document
12 that we are marking as Government Exhibit 367. This
13 is another document bearing document production
14 numbers from the Microsoft document production.
15 The second item on the first page
16 purports to be an e-mail message from Ben Waldman to
17 you --
18 A. No.
19 Q. -- dated June 27, 1997.
20 A. It's not to me.
21 (The document referred to was marked
22 by the court reporter as Government Exhibit 367 for
23 identification and is attached hereto.)
24 Q. BY MR. BOIES: Well, the one I'm
25 looking at says from Ben Waldman, sent February 27,
315
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 1997, 1:56 a.m. to Bill Gates, cc John DeVaan.
2 A. I must be on the wrong page.
3 Q. Very first page, second item.
4 MR. HEINER: We have something
5 different.
6 MR. NEUKOM: There is some confusion.
7 MR. BOIES: Okay. Let me try to be
8 sure we have the right document. I will refer to it
9 by document production numbers so that we're clear.
10 Let me mark as Government Exhibit 368
11 a document that bears document production stamp
12 98 0113394 through 97.
13 (The document referred to was marked
14 by the court reporter as Government Exhibit 368 for
15 identification and is attached hereto.)
16 Q. BY MR. BOIES: Now, let me direct your
17 attention to the second item on the first page of
18 this exhibit. And this purports to be an e-mail from
19 Mr. Waldman to you dated June 27, 1997; is that
20 correct, sir?
21 A. The second one, uh-huh.
22 Q. You have to answer audibly yes or no,
23 Mr. Gates.
24 A. Yes, the second one.
25 Q. Now, in the second paragraph of this
316
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 e-mail to you, the second sentence reads, "The threat
2 to cancel Mac Office 97 is certainly the strongest
3 bargaining point we have, as doing so will do a great
4 deal of harm to Apple immediately."
5 Do you see that, sir?
6 A. Uh-huh.
7 Q. Do you recall receiving this e-mail in
8 June of 1997?
9 A. Not specifically.
10 Q. Do you have any doubt that you received
11 this e-mail in June of 1997?
12 A. No.
13 Q. Do you know why Mr. Waldman wrote you
14 in June of 1997 that, "The threat to cancel Mac
15 Office 97 is certainly the strongest bargaining point
16 we have, as doing so will do a great deal of harm to
17 Apple immediately"?
18 A. Well, Mr. Waldman was in charge of this
19 update. And the Mac Office product had been shipping
20 for over a decade by now. And there was a financial
21 question of whether to do this update and he felt it
22 made good business sense to do it. Other people,
23 irrespective of the relationship with Apple, had said
24 that it didn't make sense to do the update. And so
25 there was some mail from Ben, including this one,
317
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 where he was saying he thought we should go ahead and
2 finish the product. I'm not sure what he means about
3 the negotiations with Apple. I'm not sure what we
4 were negotiating with Apple at this point.
5 Q. Was this the time that you were
6 negotiating with Apple to try to find out what you
7 could get Apple to do to undermine Sun?
8 A. Well, the only e-mail -- the only thing
9 you've shown me where that term was used is after we
10 reached a Mac Office agreement with Apple.
11 Q. You're referring to your e-mail dated
12 August 8, 1997; is that correct?
13 A. That's right.
14 Q. That has been marked as Exhibit 365; is
15 that correct?
16 A. That's right. That's after.
17 Q. That's August 8, 1997?
18 A. That's right.
19 Q. And it is clear from your August 8,
20 1997 memo that you are still attempting to get Apple
21 to do additional things, is it not, sir?
22 A. No.
23 Q. Well, sir, let's read it. It's only
24 three lines. You write, "I want to get as much
25 mileage as possible out of our browser and Java
318
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 relationship here."
2 And when you talk about "here," you're
3 talking about with Apple, are you not, sir?
4 A. I'm not sure.
5 Q. Well, the subject of this is "FW:
6 Post-agreement"; correct, sir?
7 A. Yeah. That's what makes me think this
8 was probably post-agreement.
9 Q. Post-agreement with Apple; right?
10 A. Yes.
11 Q. So the subject is post-agreement with
12 Apple, and the very first sentence is, "I want to get
13 as much mileage as possible out of our browser and
14 Java relationship here." Second sentence says, "In
15 other words, a real advantage against Sun and
16 Netscape." Third line says, "Who should Avie be
17 working with? Do we have a clear plan on what we
18 want Apple to do to undermine Sun?"
19 Now, do you have any doubt that when
20 you talk about, "I want to get as much mileage as
21 possible out of our browser and Java relationship
22 here," you're talking about Apple?
23 A. That's what it appears.
24 Q. Do you have any recollection of any
25 discussions about the subject matter of this e-mail
319
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 in or about August of 1997?
2 If the question is confusing, I'd be
3 happy to rephrase it, Mr. Gates.
4 A. Go ahead.
5 Q. Did you send this e-mail?
6 A. It appears I did.
7 Q. Did you discuss this e-mail with
8 anyone?
9 A. I don't remember that.
10 Q. Let me go back to Exhibit 368, which is
11 the June 27, 1997 e-mail from Mr. Waldman to you. Do
12 you recall -- and I know you've said you don't recall
13 receiving this e-mail, but do you recall anyone
14 describing the threat to cancel Mac Office 97 as a
15 bargaining point that you had in dealing with Apple
16 in or about June of 1997?
17 A. I remember going to meetings where Paul
18 Maritz took the position that we shouldn't do the
19 update, the Mac Office 97 update. And the main
20 negotiation we had with Apple at that point was a
21 discussion about a patent cross license. And so I
22 said to Paul I wanted to understand better where we
23 were on the patent cross license and understand the
24 state of the Mac Office development. And then it
25 appears that this is an e-mail that is coming after
320
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 that meeting. I don't remember somebody using those
2 exact words.
3 Q. Whether you remember somebody using the
4 exact words that Mr. Waldman uses in his June 27,
5 1997 e-mail to you, do you remember people telling
6 you in substance that the threat to cancel Mac Office
7 97 was a strong bargaining point that you had against
8 Apple and that cancelling Mac Office 97 would do a
9 great deal of harm to Apple immediately?
10 A. I know there was the internal debate
11 about whether to do the update. And I know there was
12 the patent discussion going on. And I said that
13 maybe even if it didn't make business sense to do the
14 update, maybe as part of an overall relationship with
15 the patent cross license, that we should go ahead and
16 do it. And so a commitment to do the upgrade was one
17 of the things that we told Apple we might commit to
18 as part of the patent cross license relationship.
19 Q. And did you believe in 1997 that
20 cancelling Mac Office 97 would do a great deal of
21 harm to Apple, as Mr. Waldman writes it would?
22 A. There was a question about whether to
23 do the upgrade and whether it made business sense. I
24 can't really say how much impact it would have on
25 Apple of us doing the upgrade or not. Certainly Ben,
321
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 as the person in charge of the upgrade, was very
2 passionate about its importance and its dramatic
3 nature.
4 Q. My question to you now, sir, is whether
5 you believed that cancelling Mac Office 97 would do a
6 great deal of harm to Apple?
7 A. Well, I know that Apple would prefer
8 that we have a more updated version of Mac Office,
9 that that would be a positive thing for them, and so
10 that's why it was part of the negotiation relative to
11 the patent cross license.
12 Q. And did you believe that cancelling Mac
13 Office 97 would do a great deal of harm to Apple?
14 A. I told you I think it would be better
15 for Apple to have everybody doing major upgrades like
16 this. I doubt -- I can't characterize the level of
17 benefit of the upgrade to Apple, but certainly it's
18 something they wanted us to complete.
19 Q. The next sentence in Mr. Waldman's
20 June 27, 1997 e-mail to you begins, "I also believe
21 that Apple is taking this threat pretty seriously."
22 Did someone tell you in or about June
23 of 1997 that Apple was taking Microsoft's threat to
24 cancel Mac Office 97 seriously or pretty seriously?
25 A. Well, Maritz had taken the position
322
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 that it didn't make business sense to finish this
2 upgrade. And it's very possible Apple might have
3 heard about Maritz's opinion there and therefore been
4 worried that we, businesswise, didn't see a reason to
5 complete the upgrade and that they would have the
6 older Mac Office as opposed to this new work that we
7 were part way along on.
8 Q. Mr. Gates, my question is not what
9 position Mr. Maritz did or did not take. My question
10 is whether anyone told you in or about June of 1997
11 that Apple was taking pretty seriously Microsoft's
12 threat to cancel Mac Office 97?
13 A. Apple may have known that senior
14 executives at Microsoft, Maritz in particular,
15 thought that it didn't make business sense to
16 complete that upgrade.
17 Q. Mr. Gates, I'm not asking you what
18 Apple may have known or may not have known. What I'm
19 asking you is whether anybody told you in or about
20 June of 1997 that Apple was taking pretty seriously
21 Microsoft's threat to cancel Mac Office 97?
22 A. Those particular words?
23 Q. Told you that in words or in substance.
24 A. I think I remember hearing that Apple
25 had heard about Maritz's view that it didn't make
323
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 sense to continue the upgrade, but -- and that, you
2 know, they wanted us to continue the upgrade. But
3 I -- I don't remember any of the -- it being phrased
4 at all the way you're phrasing it.
5 Q. Well, the way I'm phrasing it is the
6 way that Mr. Waldman phrased it to you in his e-mail
7 of June 27, 1997; correct, sir?
8 A. Well, in reading it, I see those words,
9 yes.
10 Q. And you don't have any doubt that you
11 received this e-mail, do you, sir?
12 A. I have no reason to doubt it. I don't
13 remember receiving it. I do remember in general
14 sending an e-mail like the one that's at the top
15 there.
16 Q. Do you recall anyone telling you in
17 words or in substance in or about June of 1997 what
18 Mr. Waldman is writing here in this e-mail?
19 MR. HEINER: Objection.
20 THE WITNESS: This is a very long piece
21 of e-mail. Have you read the whole e-mail yourself?
22 MR. BOIES: I think my question was
23 imprecise. I was trying to avoid quoting something
24 for yet another time, but I accept your counsel's
25 view that the question was probably defective. I
324
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 thought it was clear what portion of the e-mail we
2 were talking about, but I will make it clear.
3 Q. Mr. Gates, Mr. Waldman on June 27,
4 1997, sends you an e-mail that says, "The threat to
5 cancel Mac Office 97 is certainly the strongest
6 bargaining point we have, as doing so will do a great
7 deal of harm to Apple immediately. I also believe
8 that Apple is taking this threat pretty seriously."
9 Do you recall anyone --
10 A. Do you want to finish the sentence or
11 not?
12 Q. You can if you think it is necessary to
13 answer the question.
14 Do you recall anyone telling you what I
15 have just quoted in words or in substance in or about
16 June, 1997?
17 A. No.
18 MR. HEINER: It's just about 10:00 now.
19 Can we take a break?
20 MR. BOIES: If you wish.
21 MR. HEINER: Yes, thanks.
22 VIDEOTAPE OPERATOR: The time is 9:57.
23 We're going off the record.
24 (Recess.)
25 VIDEOTAPE OPERATOR: The time is 10:21.
325
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 We are going back on the record.
2 Q. BY MR. BOIES: What were the primary
3 goals that you personally had, Mr. Gates, in terms of
4 getting Apple to agree to things?
5 MR. HEINER: Objection. Can you be
6 just a bit more specific on that?
7 MR. BOIES: Sure.
8 Q. In the period of 1996 forward, after
9 you concluded that Java, or as you put it, Java
10 runtime threat and Netscape were competitive threats
11 to Microsoft, what were your goals in terms of
12 dealing with Apple? What were you trying to get
13 Apple to agree to do for Microsoft?
14 A. Well, the main reasons we were having
15 discussions with Apple in this '97 period was that
16 they had asserted that various patents that they had
17 applied to various Microsoft products, and so our
18 primary focus in discussing an agreement with them
19 was to conclude a patent cross license of some kind.
20 Q. I want to be sure that the question and
21 answer are meeting. I asked for a period of 1996 to
22 the present and you answered about 1997. Were your
23 goals in 1996 or after 1997 any different than the
24 goals that you've just described in dealing with
25 Apple?
326
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 A. There's only one agreement with Apple,
2 so I don't know what you're talking about.
3 Q. Okay. Do you understand the word goals
4 or objectives?
5 A. You talked about agreeing with Apple --
6 there's only one agreement with Apple that I know
7 about that we're discussing and that was one that was
8 concluded in I think late July or early August, 1997
9 and there's no other agreement that I know was even
10 discussed or considered.
11 Q. Okay. Let me ask you to look at a
12 document previously marked as Government Exhibit 369.
13 The second item on the first page of this exhibit
14 purports to be an e-mail from you dated June 23, 1996
15 to Paul Maritz and Brad Silverberg with copies to
16 Messrs. Higgins, Bradford, Waldman and Ludwig on the
17 subject of "Apple meeting."
18 (The document referred to was marked by
19 the court reporter as Government Exhibit 369 for
20 identification and is attached hereto.)
21 Q. BY MR. BOIES: Did you send this
22 e-mail, Mr. Gates, on or about June 23, 1996?
23 A. I don't remember it specifically, but I
24 don't have any reason to doubt that I did.
25 Q. In the second paragraph you say, "I
327
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 have 2 key goals in investing in the Apple
2 relationship - 1) Maintain our applications share on
3 the platform and 2) See if we can get them to embrace
4 Internet Explorer in some way."
5 Do you see that?
6 A. Yeah.
7 Q. Does that refresh your recollection as
8 to what your two key goals were in connection with
9 Apple in June of 1996?
10 A. First of all, June of 1996 is not in
11 the time frame that your previous question related
12 to. And certainly in the e-mail to this group I'm
13 not talking about the patent thing, but believe me,
14 it was our top goal in thinking about Apple for many,
15 many years because of their assertions.
16 Q. My time frame in my question, sir, was
17 a time frame beginning in 1996 when you began to view
18 Netscape or the Java runtime threat as a competitive
19 threat to Microsoft.
20 A. And that was after June of 1996.
21 Q. Is it your testimony that in June of
22 1996 you did not consider Netscape to be a
23 competitive threat to Microsoft?
24 A. Netscape was a competitor, but in terms
25 of Java and all the runtime related issues, we didn't
328
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 have a clear view of that at all.
2 Q. So that -- I want to be sure I've got
3 your testimony accurately. It is your testimony that
4 in June of 1996 you considered Netscape to be a
5 competitive threat but you did not consider Java or
6 Java runtime to be a competitive threat; is that your
7 testimony?
8 A. We considered Netscape to be a
9 competitor and I told you earlier that until late '96
10 we were unclear about our position on various Java
11 runtime things and what other companies were doing
12 and what that meant for us competitively.
13 Q. Do you agree that in June of 1996 the
14 two key goals that you had in terms of the Apple
15 relationship were, one, maintain your applications
16 share on the platform, and two, see if you could get
17 Apple to embrace Internet Explorer in some way?
18 A. No.
19 Q. Do you have any explanation for why you
20 would have written to Mr. Maritz and Mr. Silverberg
21 on June 23, 1996 that those were your two key goals
22 in the Apple relationship?
23 A. They weren't involved in the patent
24 issue at all. So when I write to them, I'm focused
25 on the issues that relate to them. I do mention
329
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 patents in here, but that certainly was the primary
2 goal at this time and in subsequent times.
3 Q. Let me be clear. When you write to
4 Mr. Maritz and Mr. Silverberg, you talk about
5 patents, do you not, sir?
6 A. Where do you see that?
7 Q. Well, did you talk about patents?
8 A. Do you want me to read the entire mail?
9 Q. Have you read it enough to know whether
10 you talk about patents?
11 A. I saw the word "patent" in one place.
12 If I read the whole thing, I can find out if it's in
13 other places as well.
14 Q. You do talk about patent cross license,
15 do you not, in this memo? And if you want to look at
16 the last page, five lines from the bottom.
17 A. Yeah. They weren't involved in the
18 patent issues at all, so it looks like in this mail I
19 just mention that in a summary part, but it was our
20 top goal in our discussions with Apple.
21 Q. When you write to Mr. Maritz and
22 Mr. Silverberg, you don't describe that as your top
23 goal, in fact, you don't even describe it as one of
24 your two or three key goals; correct, sir?
25 A. This piece of e-mail doesn't talk about
330
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 the patent goal as the top goal. It's most likely
2 that's because the people copied on the mail don't
3 have a thing to do with it and I wouldn't distract
4 them with it.
5 Q. I want to be sure I have your testimony
6 correct. In June of 1996, what was Paul Maritz's
7 title?
8 A. He was involved in product development
9 activities.
10 Q. He was involved in product development
11 activities. What was his title?
12 A. I don't know. Systems.
13 Q. Systems?
14 A. Uh-huh.
15 Q. Did he have a title that went with
16 that?
17 A. Senior vice-president systems. I don't
18 know.
19 Q. Senior vice-president systems, I see.
20 Did Mr. Silverberg have a position in
21 June of 1996?
22 A. He worked for Mr. Maritz.
23 Q. Did he have a title?
24 A. I don't know what his title was at the
25 time. He would have been an officer of some kind.
331
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. An officer of some kind.
2 So you're writing a memo to Paul
3 Maritz, a senior vice-president, and Brad Silverberg,
4 an officer of some kind, and you're sending copies to
5 four other people on the subject of the Apple
6 meeting, and you say, "I have 2 key goals in
7 investing in the Apple relationship."
8 A. That's quite distinct than any goals I
9 might have for a deal with Apple. It says, "I have 2
10 key goals in investing in the Apple relationship,"
11 not "I have 2 key goals for a deal with Apple."
12 Q. Well, sir, at the bottom you say what
13 you propose in terms of a deal and you talk about
14 what Apple will get out of the deal and what
15 Microsoft will get out of the deal; correct, sir?
16 A. Do you want me to read you the e-mail?
17 I mean I don't know anything more than just what it
18 says in the e-mail. I'm glad to read it to you.
19 Q. Well, sir, does it say at the bottom of
20 the e-mail that you are proposing something with
21 Apple and you are identifying what Apple would get
22 under your proposed deal and what Microsoft would get
23 under your proposed deal?
24 A. Yeah, that's at the bottom of the
25 e-mail.
332
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. In fact, the bottom of the e-mail
2 talking about a proposed Apple-Microsoft deal, you
3 say, "The deal would look like this," and then you've
4 got a column "Apple gets" and a column "Microsoft
5 gets" and a column "Both get"; right, sir?
6 A. I'm reading that.
7 Q. Now, in this e-mail of a page or a page
8 and a half in which you are proposing this deal, you
9 describe your two key goals as maintaining
10 Microsoft's applications share on the platform and
11 getting Apple to embrace Internet Explorer.
12 A. No, that's wrong.
13 Q. That's wrong, okay.
14 A. The word "deal" and the word
15 "relationship" are not the same word. This says, "I
16 have 2 key goals in investing in the Apple
17 relationship." This down here is an agreement which
18 I thought we could reach with Apple.
19 Q. Is it your testimony here today under
20 oath that your two key goals in investing in the
21 Apple relationship, which you mention in the second
22 paragraph of this e-mail, is different than your two
23 key goals in the proposed deal that you describe five
24 paragraphs later?
25 A. I don't see anything in here about the
333
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 key goals -- two key goals in the deal. I've told
2 you that I'm certain that my primary goal in any deal
3 was the patent cross license.
4 Q. Mr. Gates, my question is whether it is
5 your testimony today here under oath that when you
6 talk about your two key goals in investing in the
7 Apple relationship in the second paragraph of this
8 e-mail, that that is different than what your key
9 goals were in the deal that you proposed five
10 paragraphs later?
11 A. That's right. Investing in a
12 relationship is different than the deal.
13 Q. Now, you don't tell Mr. Maritz or
14 Mr. Silverberg that your goals for investing in the
15 Apple relationship are different than your goals in
16 the proposed deal, do you, sir?
17 A. But the goals and the deal are quite
18 different, so obviously they would have known they
19 were quite different.
20 Q. Well, sir, you say the goals and the
21 deal are quite different. One of your two key goals
22 that you talk about in your second paragraph is to
23 get Apple to embrace Internet Explorer in some way.
24 And the very first thing under what Microsoft gets in
25 your proposed deal is, "Apple endorses Microsoft
334
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Internet Explorer technology." Do you see that, sir?
2 A. Uh-huh.
3 Q. Now, does that refresh your
4 recollection that the deal that you were proposing
5 had some relationship to the two key goals that you
6 were identifying?
7 A. Some relationship, yes, but they aren't
8 the same thing at all.
9 Q. All right, sir.
10 Did you ever prepare any e-mail to
11 anyone, Mr. Maritz or Mr. Silverberg or anyone, in
12 which you said that your primary goal in an Apple
13 deal was obtaining a cross license?
14 A. I don't remember a specific piece of
15 e-mail, but I'm sure I did with at least Mr. Maffei
16 and Mr. Maritz.
17 Q. You're sure you sent them e-mail saying
18 that?
19 A. I'm sure I communicated it to them in
20 some way.
21 Q. Do you believe you sent them anything
22 in writing or an e-mail?
23 A. I think it's likely, but I don't
24 remember a specific document.
25 Q. You certainly haven't seen any such
335
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 document in being prepared for your deposition; is
2 that fair?
3 MR. HEINER: Objection. You're not
4 seeking to intrude on the attorney-client privilege?
5 MR. BOIES: No. I want to know if he
6 has seen any such document, this document he says he
7 thinks exists that wasn't produced in document
8 production. I want to see if he has ever seen it, if
9 he recalls ever seeing it now or any other time.
10 THE WITNESS: I didn't say anything
11 about what may or may not exist at this point. I
12 said I'm sure I communicated to Mr. Maritz and
13 Mr. Maffei that our primary goal in doing the deal
14 with Apple was the patent cross license.
15 Q. BY MR. BOIES: And I had thought, and
16 perhaps I misunderstood, I thought that you had said
17 that you believed that you actually communicated that
18 not merely orally but by e-mail or in writing.
19 A. I think it's likely that I communicated
20 it in e-mail.
21 Q. And if you had communicated it in
22 e-mail, would that e-mail have been preserved?
23 A. Not necessarily.
24 Q. A lot of these e-mails were preserved
25 because we now have copies of them; right?
336
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 A. That's right.
2 Q. How did Microsoft decide what e-mails
3 would be preserved and what e-mails would not be
4 preserved?
5 A. Individuals get e-mail into their
6 mailbox and they decide.
7 Q. Do you have any explanation as to why
8 people would have decided to keep the e-mail that
9 described your two key goals in the Apple
10 relationship as being what they are stated to be here
11 and not have preserved your e-mail that you say you
12 sent saying you had a primary goal of a cross
13 license?
14 MR. HEINER: Objection. Lack of
15 foundation.
16 THE WITNESS: You're missing --
17 MR. HEINER: Hold it. Objection.
18 Those facts are not established. There could be 100
19 e-mails that talk about a patent cross license and
20 you may have them or you may not have them or they
21 may not have been called for. There is a range of
22 possibilities. That question is unfair and I object.
23 MR. BOIES: Okay, you've made your
24 objection. The witness will now answer the question.
25 MR. HEINER: Let's have it read back.
337
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 MR. BOIES: And if you come up with
2 those hundred e-mails, we will read them with
3 interest. I don't think you're going to and you
4 don't think you're going to either.
5 MR. HEINER: I disagree with that.
6 MR. BOIES: Okay.
7 Q. I'll restate the question to just be
8 absolutely certain that it's a fair question,
9 Mr. Gates.
10 If it were the case that neither your
11 counsel nor myself, after diligent search, can find
12 an e-mail that says your primary goal in dealing with
13 Apple was a patent cross license, do you have any
14 explanation as to why that e-mail that you say you
15 think exists would not have been saved, whereas the
16 e-mail that describes one of your two key goals as
17 getting Apple to embrace Internet Explorer was
18 preserved?
19 MR. HEINER: Objection. It's not a
20 sensible question. You asked a hypothetical. How
21 can the witness explain what the facts might be in
22 your hypothetical?
23 MR. BOIES: He is not being asked to
24 explain what the facts are in a hypothetical, I think
25 that's clear. If the witness tells me he cannot
338
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 answer the question, he can do so and we will go on
2 and take that up with everything else we'll take up
3 at a subsequent time.
4 THE WITNESS: When you say "dealing
5 with Apple," there were a lot of things we were
6 dealing with Apple on. I've told you in terms of the
7 deal, the deal I was involved in discussing in '96
8 and under another management at Apple in '97, there's
9 no doubt the primary goal was the patent cross
10 license.
11 Q. BY MR. BOIES: And by "the primary
12 goal," what you mean is the primary goal that you,
13 Mr. Gates, had; is that correct?
14 A. I don't think I'm the only one who had
15 it, but certainly yes, that was the primary goal of
16 myself and for the company.
17 Q. And when you said in your June 23, 1996
18 e-mail, "I have 2 key goals in investing in the Apple
19 relationship," you were talking about yourself
20 personally; is that correct?
21 A. Yeah. When I say "investing in the
22 Apple relationship," that means spending time with
23 Apple and growing the relationship.
24 Q. And when in describing the deal five
25 paragraphs later the very first thing that Microsoft
339
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 gets is, "Apple endorses Microsoft Internet Explorer
2 technology," did that indicate to you that that was
3 an important part of what you were getting in terms
4 of the deal?
5 A. No such deal was ever struck, so I'm
6 not sure what you're saying.
7 Q. Was that an important part of the deal
8 that you were trying to get, sir?
9 A. We never got as far as trying to get
10 that deal, unfortunately.
11 Q. You never got as far as trying to get
12 that deal; is that what you're saying?
13 A. No. Well, in this time frame Gil
14 Amelio's total focus was on his new OS strategy, so
15 what I outlined here we never got them to consider.
16 Q. Well, sir, your e-mail begins, "Last
17 Tuesday night I went down to address the top Apple
18 executives;" correct, sir?
19 A. That's right.
20 Q. And down at the bottom when you're
21 introducing the deal, you say, "I proposed." Now,
22 you're referring to what you proposed to the Apple
23 top executives, are you not, sir?
24 A. Yes.
25 Q. Okay. And what you proposed was
340
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 "the deal" that you then describe at the bottom of
2 the first page and the top of the second page;
3 correct, sir?
4 A. That's right.
5 Q. And that was a deal that you proposed
6 the Tuesday night before June 23, 1996 to what you
7 describe as the top Apple executives; correct, sir?
8 A. I put forward some of those points.
9 Q. Well, you put them forward and you
10 describe them as proposing a deal, correct, sir?
11 A. That's how I describe it here, yes.
12 Q. All right, sir. Now, you'd said that
13 the deal that you were talking about never got done.
14 Did you ever get Apple to endorse Microsoft Internet
15 Explorer technology?
16 A. You're trying to just read part of
17 that?
18 Q. I'm actually -- what I'm doing is
19 asking a question right now, sir. I'm asking whether
20 in 1996 or otherwise, at any time did you get Apple
21 to endorse Microsoft Internet Explorer technology?
22 A. Well, you can get a copy of the
23 agreement we reached with Apple and decide if in
24 reading that you think it meets that criteria or not.
25 Q. Sir, I'm asking you, as the chief
341
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 executive officer of Microsoft, I'm asking you
2 whether you believe that you achieved that objective?
3 A. We did not get some exclusive
4 endorsement. We did get some -- there's some part of
5 the deal that has to do with Internet Explorer
6 technology.
7 Q. Do you know what that part of the deal
8 is?
9 A. Not really. It has something to do
10 with they will at least ship it along with other
11 browsers.
12 Q. Does the deal prohibit them from
13 shipping Netscape's browser without also shipping
14 Internet Explorer?
15 A. I'd have to look at the deal to
16 understand.
17 Q. It is your testimony sitting here today
18 under oath that you simply don't know one way or the
19 other whether Apple is today free to ship Netscape's
20 browser without also shipping Internet Explorer?
21 A. That's right.
22 Q. When you identify things as key goals,
23 do you typically tend to follow up and see to what
24 extent those goals have been achieved?
25 A. In a very general sense, yes.
342
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. Did you ever follow up to see whether
2 one of the two key goals that you identify in your
3 1996 e-mail to Mr. Maritz and Mr. Silverberg and
4 others of getting Apple to embrace Internet Explorer
5 technology in some way had been achieved?
6 A. Well, certainly what I said here,
7 "I have 2 key goals in investing in the Apple
8 relationship," that -- those weren't achieved because
9 the investments I made were with Gil Amelio, who was
10 fired from Apple very soon thereafter.
11 Q. Was there something about Mr. Amelio
12 getting fired that changed what your goals were for
13 the Apple relationship?
14 A. I said, "I have 2 key goals in
15 investing in the Apple relationship." The form that
16 investment took was spending time with Gil Amelio.
17 That turned out to be wasted time because he was
18 fired from Apple rather abruptly within about, oh,
19 eight months of this.
20 Q. When he was fired, did that change what
21 goals you had for the Apple relationship, Mr. Gates?
22 A. It was basically a complete restart
23 because we had to understand what the new management,
24 what they were going to do with Apple and where they
25 were going.
343
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. Did your goals change?
2 A. Goals for what? For investing in the
3 relationship?
4 Q. You say in this e-mail you have two key
5 goals for investing in the Apple relationship. One
6 of --
7 A. In investing in the Apple relationship.
8 Q. One of them is to get Apple to embrace
9 Internet Explorer technology in some way. What I'm
10 asking you is whether that changed after this person
11 got fired?
12 A. We re-evaluated all of our thoughts
13 about working with Apple based on what the new
14 management was going to do, whether they were going
15 to target the machines, what they were going to do
16 with their machines. Since they continued to say we
17 were in violation of their patents, it continued to
18 be our top goal to get some type of patent cross
19 license.
20 MR. BOIES: Would you read the question
21 back, please.
22 (The record was read as follows:
23 "Q. One of them is to get Apple to
24 embrace Internet Explorer technology in some
25 way. What I'm asking you is whether that
344
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 changed after this person got fired?")
2 MR. BOIES: Better read the whole
3 question. And then again reincorporate it so that
4 it's clear for the record.
5 (The record was read as follows:
6 "Q. You say in this e-mail you have
7 two key goals for investing in the Apple
8 relationship. One of --
9 A. In investing in the Apple
10 relationship.
11 Q. One of them is to get Apple to
12 embrace Internet Explorer technology in some
13 way. What I'm asking you is whether that
14 changed after this person got fired?")
15 The WITNESS: You keep, either
16 intentionally or unintentionally, trying to confuse
17 my goals for investing in the relationship with the
18 goals we had overall for various dealings with Apple.
19 Certainly the goals I had for investing in the
20 relationship, that I had to start over and rethink
21 because the investment was to spend time with the CEO
22 who had been fired.
23 Q. Mr. Gates, neither in this e-mail nor
24 in any other document that either of us is aware of
25 do you make that distinction that you're making now,
345
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 correct?
2 MR. HEINER: Objection.
3 Q. BY MR. BOIES: Do you understand the
4 question I'm asking?
5 A. This document does not say that my
6 goals for dealing -- does not state my goals for
7 dealing with Apple up here. It states my goals in
8 investing in the Apple relationship, so there is a
9 clear distinction right there in that document.
10 Q. Mr. Gates, this document deals with a
11 proposed deal that you made to top Apple executives;
12 correct?
13 A. That's only one part of what is in the
14 document. There's a part where it talks about -- you
15 never mentioned it, but the first goal is "Maintain
16 our applications share on the platform." That's
17 something I'm doing in investing in the Apple
18 relationship and that's not related to the deal
19 that's given -- the proposed deal discussed below in
20 the e-mail, so those are clearly two separate things.
21 Related, but separate.
22 Q. What I think I've done is I think I
23 have mentioned the first goal a number of times.
24 A. I don't think so.
25 Q. I think it's been read about three
346
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 times in the record and the record will show it.
2 A. Okay. It's a point of disagreement.
3 Q. Okay.
4 MR. HEINER: But not an important one.
5 MR. NEUKOM: But a time consuming one.
6 MR. BOIES: Exactly the point that I
7 was making, which is why the witness makes those
8 kinds of statements. The --
9 MR. HEINER: It took two to tango just
10 there.
11 MR. BOIES: Yes, it did. And actually
12 it took four of us, three on that side of the table
13 and me.
14 Q. My question, Mr. Gates, has to do with
15 what your goals were, what your stated goals were.
16 Now, you say here, "I have two key goals in investing
17 in the Apple relationship, one of which is to get
18 Apple to embrace Internet Explorer technology in some
19 way."
20 Did that continue to be a goal that you
21 had after 1996?
22 A. It wasn't a goal in investing in the
23 Apple relationship in terms -- in the sense I meant
24 it here. It was a goal for our overall dealing with
25 Apple. One of many.
347
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. Okay. Was it a key goal?
2 A. I'm not sure what you mean by key goal.
3 It was a goal.
4 Q. What I mean by key goal is what you
5 meant by key goal in your June 23, 1996 e-mail,
6 Mr. Gates.
7 A. That's about investing in the Apple
8 relationship, which meant spending time with Gill
9 Amelio, so I don't know why you can take the word out
10 of there and apply it to a completely different
11 context.
12 Q. When you say "a completely different
13 context," let's be clear about what we're talking
14 about. The completely different context that you're
15 talking about is the difference between investing in
16 the Apple relationship and doing a deal with Apple;
17 is that what you're saying?
18 A. No. We have goals for our general
19 dealings with Apple, which came to a deal -- we
20 actually reached a deal in either late July, '97 or
21 early August. But there's a separate thing of what
22 was that deal, what we were able to achieve, what we
23 were trying to achieve when we were dealing with the
24 previous management, and what I'm trying to do in
25 terms of spending my time investing in the Apple
348
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 relationship.
2 Q. And what you're saying is it is your
3 testimony under oath, although you can't recall
4 actually having sent this e-mail, you're confident
5 when you wrote this and referred to investing in the
6 Apple relationship, you meant only what you expected
7 to get out of spending time with the Apple
8 executives; is that your testimony?
9 A. Yeah. I was explaining why I was
10 spending time with Gill Amelio.
11 Q. And that's all you meant to be saying
12 here is your testimony?
13 A. That's what -- in reading this, that's
14 what I believe I was trying to communicate to the
15 recipients of the e-mail.
16 Q. All right, sir.
17 Let me ask you to look at a document
18 previously marked as Government Exhibit 370. This
19 purports to be an e-mail, and the second item on the
20 e-mail is an e-mail from John Ludwig to Don Bradford
21 dated August 21, 1997. And the subject is
22 "Conversations with BillG last night."
23 And the BillG referred to there is you;
24 correct, sir?
25 A. Yes.
349
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 (The document referred to was marked
2 by the court reporter as Government Exhibit 370 for
3 identification and is attached hereto.)
4 Q. BY MR. BOIES: And it begins, "I was at
5 the exec staff meeting last night."
6 Can you explain for the record what the
7 exec staff meeting was?
8 A. He is referring to a regular
9 get-together four times a year of the Microsoft
10 executive staff.
11 Q. And he goes on to say that, "There were
12 three interesting exchanges with Bill and the whole
13 group about Apple." Do you see that?
14 A. I see it.
15 Q. And No. 1 is, "Bill's top priority is
16 for us to get the browser in the October OS release
17 from Apple. We should do whatever it takes to make
18 this happen. If we are getting shut out, we should
19 escalate to Bill. You should make sure that we are
20 engaging deeply with Apple on this one and resolving
21 any and all issues."
22 Do you recall conveying to your
23 executive staff in or about August of 1997 that your
24 top priority was to get Microsoft's browser in the
25 October OS release from Apple?
350
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 A. No, I don't recall that.
2 Q. The top e-mail, which is from Don
3 Bradford to a number of people dated August 21, 1997
4 and is also on the subject of "conversations with
5 BillG last night," says that Mr. Bradford and someone
6 else, Mohan Thomas, "will take the lead on working
7 out the Apple bundle deal." Do you see that?
8 A. Yes.
9 Q. Did you instruct your executive staff
10 in or about August of 1997 to work out an "Apple
11 bundle deal"?
12 A. Well, I think this is post the August
13 agreement, late July or early August agreement we
14 reached with Apple. And I think there were some
15 circumstances under which they would include or
16 bundle IE with some of their shipments. I think
17 that's what that's referring to.
18 Q. And is that what your present
19 recollection is that you told your executive staff in
20 August of 1997?
21 A. Well, I don't recall specifically what
22 I said to the executive staff about Apple, but it
23 appears Ludwig took out of that that he was supposed
24 to make sure that whatever outs that Apple had under
25 the previous agreement for not shipping our
351
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 technology, that we avoided those being a problem
2 that prevented them from shipping our technology.
3 Q. Well, Apple wasn't prohibited from
4 shipping your technology in August of 1997, was it,
5 sir?
6 A. No, I actually think if we -- I don't
7 know the Apple agreement, I haven't read it, but I
8 think there is something in there that if we got
9 certain things done and if there were no problems and
10 it passed tests and we were ready in time, that they
11 would actually affirmatively include some of our
12 technology in various OS releases. And this appears
13 to be a discussion about whether or not we're going
14 to be able to meet the requirements on us related to
15 that.
16 Q. It is clear that getting the browser in
17 the October OS release from Apple was something that
18 you, Bill Gates, and Microsoft wanted; correct, sir?
19 A. Yes, that's something that we wanted.
20 Q. The last sentence of the second
21 paragraph says, "Bill was clear that his whole goal
22 here is to keep Apple and Sun split. He doesn't care
23 that much about being aligned with Apple, he just
24 wants them split from other potential allies."
25 And that relates to Java, does it not,
352
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 sir?
2 A. I don't have a direct recollection, but
3 if you read the sentence in front of it, that
4 paragraph seems to relate to Java runtime.
5 Q. Do you have a recollection of telling
6 your executive staff in or about August 21 that your
7 whole goal with respect to Apple related to Java
8 runtime was to keep Apple and Sun split?
9 A. No.
10 Q. Who was at this executive staff
11 meeting?
12 A. Probably members of the executive
13 staff.
14 Q. And who were they?
15 A. It's about 40 to 50 people. I doubt
16 you want to take the time for me to guess. We
17 generally get about 70 percent attendance. Looking
18 at this document, I think it's very likely that I was
19 there and John Ludwig was there, but as to the rest
20 of the executive staff, I'd just be guessing. It's
21 very rare for us to have non-executive staff members
22 at those meetings, although sometimes it happens.
23 Q. Is Mr. Ludwig somebody who you believe
24 is an honest and competent person?
25 A. In general, yes.
353
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. Do you have any reason to believe that
2 he would make up anything about what your statements
3 were?
4 A. No.
5 Q. Let me ask you to look at a document
6 that has been previously marked as Government
7 Exhibit 371. The portion I'm particularly interested
8 in is in the second e-mail that is in this exhibit,
9 which is on the first page. And it is an e-mail from
10 you to Paul Maritz and others dated January 22, 1998.
11 (The document referred to was marked
12 by the court reporter as Government Exhibit 371 for
13 identification and is attached hereto.)
14 Q. BY MR. BOIES: Did you send this e-mail
15 on or about January 22, 1998?
16 A. I don't remember doing so, but I have
17 no reason to doubt that I did.
18 Q. The next to last sentence says, "I
19 think we can gain a lot of share with IE on Mac if we
20 do some modest things."
21 Why were you interested in January,
22 1998, in increasing IE's share on Mac, as you
23 describe it?
24 A. I'm not sure what I was thinking in
25 particular when I wrote this mail, but I can --
354
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 sitting here now, I can give you some reasons that I
2 think I would have had for saying that.
3 Q. Okay. Would you do so, please.
4 A. Well, the use of IE on Macintosh was
5 beneficial to us in terms of the APIs we had there
6 and the content HTML extensions that we had there.
7 And when you go to people who do content, being able
8 to say to them that those extensions are popular not
9 only with PC users but Mac users, it makes it easier
10 to convince the content person to take unique
11 advantage of the innovations that we had made in HTML
12 as well as some of the innovations we had made in how
13 the browser was structured.
14 Q. I want to be sure I understand your
15 answer. You mentioned APIs and you mentioned the
16 HTML extensions. Are those two different things?
17 A. Yes, sir.
18 Q. Okay. And am I correct that the
19 broader distribution of the APIs is something that
20 makes writing to those APIs more attractive to
21 independent software writers?
22 A. If users are choosing to use the
23 software that those APIs are present in, it makes it
24 easier to convince software vendors to write to those
25 APIs.
355
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. Let me ask the question this way. Why
2 were you interested in having Apple distribute your
3 APIs?
4 MR. HEINER: Objection.
5 THE WITNESS: Well, the key issue
6 wasn't about distribution at all. The key issue was
7 usage share by Mac users of the various browsers that
8 were available on the Macintosh.
9 Q. BY MR. BOIES: Why were you interested
10 in having the usage share of Mac users of your APIs
11 increase?
12 A. You -- that question is nonsensical.
13 Q. Okay. You were asked earlier why you
14 wanted to increase your share of IE on Mac, do you
15 recall that?
16 A. Yes.
17 Q. And am I correct that you said that
18 there were two reasons, one dealt with APIs and one
19 dealt with HTML extensions?
20 A. Yeah. I've thought of a third reason
21 since then, but that's right.
22 MR. HEINER: There was also a third
23 reason at the time. You might not remember it.
24 THE WITNESS: Now there might be three
25 or four.
356
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. BY MR. BOIES: Why don't you tell me
2 the one you're thinking of and we'll see if it is the
3 same one Mr. Heiner is thinking of.
4 A. Well, I talked earlier about having
5 traffic out of IE is always of value.
6 Q. So those are the three reasons that you
7 can think of now; is that correct?
8 A. Those are three reasons that are among
9 the good reasons that raising usage share of IE on
10 Macintosh was a positive thing for Microsoft.
11 Q. I'd like to know the other reasons you
12 can think of now, if there are other reasons.
13 A. That's all I can think of right now.
14 Q. Okay. Why does increasing IE share on
15 Mac help you with respect to APIs?
16 A. Because the Mac IE had APIs.
17 Q. And how does having that help
18 Microsoft?
19 A. Because those APIs are in common with
20 some Windows APIs.
21 Q. And why does that help Microsoft?
22 A. If we do things that make our APIs in
23 Windows more attractive, it helps us in increasing
24 the volume of Windows that we license.
25 Q. Are you saying that increasing IE share
357
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 on Mac will help increase the number of Windows that
2 you license?
3 A. Yeah. I went through the chain of
4 logic that explains that to you. I don't know if you
5 misunderstood some part of it.
6 Q. All I'm trying to do is get your
7 answers on the record because if I begin to tell you
8 what I think about your answers, we'll be here all
9 day.
10 So am I correct that it is your
11 testimony here that increasing your share of IE on
12 Mac will increase the distribution of Windows?
13 A. I don't know what you mean by
14 distribution of Windows.
15 Q. The usage of Windows.
16 A. No. The number of copies that we
17 license.
18 Q. Will that be increased?
19 A. Through the indirect factors that I
20 explained to you, yes, there is a positive effect
21 there.
22 Q. So by increasing your share of IE on
23 Mac, you would expect to increase the number of
24 copies of Windows that you would license?
25 A. Yes, increasing our usage share over
358
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 time we think will help us to increase the number of
2 copies of Windows we will license.
3 Q. Does increasing IE's share on Mac make
4 it more likely that content providers will want to
5 use IE?
6 A. I don't know what you mean by content
7 providers using IE. Content providers use servers,
8 they don't use clients.
9 Q. Do you know what content providers are?
10 A. Yes.
11 Q. Give me an example of a content
12 provider.
13 Disney?
14 A. Disney.
15 Q. Disney would be a content provider.
16 Disney is an important content provider; correct,
17 sir?
18 A. Now you're going to have to give me
19 some context.
20 Q. Without me giving you some context, you
21 can't answer the question as to whether Disney is an
22 important content provider; is that your testimony
23 under oath?
24 A. Important in what sense?
25 Q. Important in the everyday, common usage
359
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 sense of what important means.
2 MR. HEINER: Mr. Boies, you're going
3 down one of those trails that you really don't need
4 to. If you go back to -- let me finish the point.
5 If you go back to the original question and answer,
6 Mr. Gates stated what part of the question he thought
7 he needed some clarification on, and it wasn't this
8 part.
9 MR. BOIES: I understand that. And I'm
10 trying to walk a balance between doing a number of
11 things, but this is somebody who won't tell me
12 whether he's going to come to trial and if he doesn't
13 come to trial, this is an evidentiary deposition and
14 if it's an evidentiary deposition, part of what I
15 need to do is make explicit on the record what I
16 think the credibility issues are. And so when I
17 think we get into what I will characterize, and
18 without meaning to engender a debate, but something
19 that might be alleged to be word games, I think it is
20 appropriate for me to make explicit what's going on
21 on the record. That's all I'm saying.
22 MR. HEINER: Okay. And I'm just saying
23 there was no question about content providers. The
24 issue was clients and servers and use of IE and can
25 easily be cleared up.
360
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 MR. BOIES: Okay. I'll try to do it.
2 Q. Actually, I think probably the word
3 "content providers" was not used, but the word
4 "content" was used by the witness and I think it was
5 used in the context of answering the question.
6 THE WITNESS: If you're actually
7 interested, it's the "use IE" where you seem to be
8 confused about what content providers do. There is
9 no question about what content provider means. When
10 you say "use IE," it's people who view content who
11 use IE.
12 Q. BY MR. BOIES: Right. And in order for
13 somebody to view content through IE, that content has
14 to be put someplace to begin with; right?
15 A. Yes.
16 Q. And one of the things that Microsoft
17 has tried to do is it has tried to convince content
18 providers to put content places and in a way so that
19 it was more attractive to view that content using IE
20 than with Netscape's browser; correct, sir?
21 A. It's not the places that make it
22 attractive. It's the way they use the HTML.
23 Q. What you've tried to do, what Microsoft
24 has tried to do, is get content providers to display
25 information in a way that would make it more
361
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 attractive to a user to view that content using IE
2 than using Netscape Navigator; correct, sir?
3 A. No. We tried to get them to author it
4 in a way that they exploit our HTML extensions.
5 Author.
6 Q. And is the effect of that to make it
7 more attractive for users to view the content using
8 IE than Netscape Navigator?
9 A. It totally depends on what they do --
10 what Netscape Navigator does with HTML extensions and
11 what that content provider does with those HTML
12 extensions.
13 Q. Let me ask what I think is a simple
14 question. Has Microsoft made an effort to get
15 content providers to agree to display information in
16 a way that makes that information more attractive
17 when viewed by the then existing Internet Explorer
18 than if viewed by the then existing Netscape browser?
19 A. Our efforts have been focused in
20 getting them to author so that it looks good in
21 Internet Explorer. These people are authors. They
22 don't do display, they do authoring.
23 Q. Let me try to use your words and maybe
24 that will move it along.
25 Have you tried -- has Microsoft tried
362
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 to get content providers to agree to, in your words,
2 author information and data in a way so that that
3 information and data is more attractive to users when
4 viewed through the then current version of Internet
5 Explorer than when viewed through the then current
6 version of Netscape's browser?
7 A. Our attempts to convince people to
8 author using our extensions is not relative to
9 Netscape. It's just a question of can we convince
10 them to use our extensions. And yes, we have
11 endeavored to convince them to use our extensions,
12 but that doesn't say anything about what they're
13 doing or how that stuff looks in Netscape.
14 Q. Are you saying that your effort to
15 convince content providers to use your extensions was
16 unrelated to what the effect would be on Netscape?
17 A. The effect on Netscape would be
18 indirect. Our intent in doing that was to increase
19 the popularity of our products.
20 Q. Was part of your objective also to
21 decrease the popularity of Netscape products?
22 A. Our intent was to increase the
23 popularity of our products.
24 Q. I'm asking a different question. The
25 answer may be simply no, but I'd like to have an
363
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 answer to my question, which is that in addition to
2 trying, as you say you were trying to, to increase
3 the popularity of your products, were you also trying
4 to decrease the popularity of Netscape products?
5 A. All of our effort was aimed at making
6 our product more popular. There may have been an
7 indirect effort in terms of their people choosing our
8 product over other people's products, but the focus
9 is on making our product more attractive.
10 Q. Did you enter into agreements with
11 content providers that limited the ability of those
12 content providers to make their content more
13 attractive when viewed through Netscape's then
14 current browser?
15 A. I'm not familiar with agreements that
16 we had with content providers.
17 Q. You're not familiar with them at all;
18 is that what you're saying?
19 A. I know that we had some, so I'm
20 familiar with their existence. I've never read one,
21 I've never seen one, I've never negotiated one.
22 Q. Have you ever discussed with anyone the
23 substance of what is in them?
24 A. What I know about them is that they --
25 they're related to the efforts to convince people to
364
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 take advantage of extensions we've done that make
2 those extensions worthwhile to end users.
3 Q. My question now is whether you've ever
4 discussed the substance of what's in those agreements
5 with anyone. And if you have --
6 A. To the degree I just described them,
7 yes. Beyond that, no.
8 Q. With whom did you have those
9 discussions?
10 A. Oh, it would have been in meetings with
11 various people. You know, Brad Chase, Paul Maritz.
12 Brad Silverberg in a certain period of time.
13 Q. And did they ever tell you that these
14 agreements with content providers limited what the
15 content providers could do with Netscape?
16 A. I don't think so.
17 Q. Do you know, as you sit here now,
18 whether any of the agreements that you entered into,
19 Microsoft entered into with content providers over
20 the last three years limited what those content
21 providers could do with Netscape?
22 MR. HEINER: This question now is,
23 perhaps intentionally, quite a bit broader than the
24 original question about extensions and so forth? Or
25 maybe it's not intentional.
365
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 MR. BOIES: It is a different question.
2 And if the witness doesn't understand it, I'll
3 rephrase it.
4 THE WITNESS: I know that when I was
5 going to testify in Washington, D.C. in the Senate,
6 that Netscape or someone was raising these content
7 provider agreements in an effort to create some
8 controversy around them. And so I was given like a
9 paragraph or two summary. And there were about 40
10 issues in general there, but one of the issues was
11 related to those agreements. And so there may have
12 been something in those paragraphs about the
13 agreements beyond what I knew about them earlier.
14 Q. BY MR. BOIES: But you don't recall the
15 substance of that now; is that what you're saying?
16 A. Well, I can tell you there was
17 something about in a period of time a certain class
18 who is on our channel bar, they could appear on
19 competitive channel bars, but if they -- they could
20 only pay us. There was something like that.
21 Q. That's an interesting one for you to
22 focus on. Can you think of any reason why you would
23 want content providers to agree that they would not
24 pay Netscape any money?
25 A. I know that we had hopes that the
366
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 channel bar would get some usage and we wanted to
2 work with some content providers to show off the
3 channel bar. And I can't give you the reasoning
4 behind any part of the ICP agreement because I wasn't
5 involved in those.
6 Q. But what I'm asking you now is whether
7 you, as you sit here now, can think of any legitimate
8 reason why Microsoft would be getting content
9 providers to agree not to pay Netscape? I'm not
10 talking about getting them to try to use your channel
11 bar. I'm talking about getting them to agree not to
12 pay Netscape.
13 A. You'd have to ask somebody else why
14 they put that in the agreement, unless you're asking
15 me to speculate wildly.
16 Q. Well, I don't know whether it would be
17 wild speculation or not, but I'm asking you whether
18 you, as you sit here now, as the chief executive of
19 Microsoft, can think of any legitimate reason for
20 Microsoft getting content providers to agree not to
21 pay Netscape?
22 MR. HEINER: Object to the question as
23 lacking foundation.
24 THE WITNESS: I'm not aware of any
25 broad prohibition against paying Netscape for
367
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 anything. I think there was something about relative
2 to the channel bar, we wanted some of the premier
3 partners, which is a very small number, to talk about
4 their work with us. And it would have been
5 embarrassing if all those same people were in the
6 same relationship with Netscape in that time period.
7 Q. In your answer in which you said that
8 you thought you recalled some of the things that you
9 were told in preparation for your hearing testimony,
10 you were the one, were you not, just a few minutes
11 ago who said that you recalled that there was some
12 provision that even if the content provider was on
13 another channel bar, they couldn't pay for it? Do
14 you recall saying that just a few minutes ago?
15 A. Uh-huh.
16 Q. You've got to say yes so the
17 reporter --
18 A. Yes.
19 Q. Now, that's what I'm asking about.
20 What I'm asking is whether you can think of any
21 legitimate reason why Microsoft would get a content
22 provider to agree not to pay Netscape?
23 A. I can guess about that if you want.
24 Q. What I'm asking is not whether you can
25 guess why you did it because we could all guess maybe
368
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 why you did it. What I'm asking is whether you can
2 think of any legitimate reason that would justify
3 doing that?
4 A. Sure.
5 Q. What?
6 A. Well, someone might have said, gee, it
7 would be embarrassing if all these same people
8 appeared in Netscape's equivalent in that time
9 period, let's have them agree not to appear at all.
10 And then someone else might have said no, let's not
11 be that restrictive, let's just make it less likely
12 they will appear by saying that they won't pay
13 Netscape to appear.
14 Q. But if you're going to let them appear,
15 why would you try to stop them from paying to appear?
16 A. It lowers the probability that they
17 will appear.
18 Q. And why does it do that, sir?
19 A. Because there's lots and lots of
20 content providers. And so in the channel bar, these
21 gold or premier or platinum -- I forget the
22 terminology -- slots, there's only visually, at least
23 in the way we did it, room for about five or six of
24 those. And so if you have a contract that says that
25 they won't take money from Netscpae to appear on
369
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 their channel bar, given the broad universe of
2 content providers that are out there, it's very
3 likely that Netscape will choose to pick people who
4 do pay them to be in their channel bar and therefore
5 you've lowered the probability that all the people
6 who appear in yours also appear in Netscape's.
7 Q. So that precluding people from paying
8 was an indirect way of trying to make sure that they
9 didn't appear on Netscape's channel bar; is that
10 right?
11 A. No. Now you've changed things. I've
12 told you I don't know why the provision was put in
13 there. You asked me if I could think of any set of
14 reasoning behind it, and which I did, and then you
15 changed and asked me a question about the history,
16 which again, I can't talk to you about the history.
17 Q. And I don't mean to be asking just
18 about the history. What I mean to be asking is
19 whether you, as the chief executive officer at
20 Microsoft -- and you testified yesterday about some
21 practices that you thought were consistent and some
22 practices that you thought were inconsistent with
23 company policy. And is it consistent with company
24 policy, let me approach it this way, to get companies
25 like content providers to agree not to pay
370
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 competitors, is that consistent with company policy
2 if that was done?
3 MR. HEINER: Objection.
4 THE WITNESS: Well, our company policy
5 is that when we're doing agreements, we rely on the
6 expertise of our law and corporate affairs department
7 to look at those and make sure that they're
8 appropriate. That's one of the things that's done in
9 agreements like that.
10 Q. BY MR. BOIES: Well, other than
11 whatever your lawyers tell you that you can do, which
12 I don't want to ask about because I think they will
13 probably object that it's privileged, do you have a
14 company policy that addresses the issue of whether it
15 is appropriate for Microsoft people to enter into
16 agreements that limit companies from doing business
17 with Microsoft's competitors?
18 A. There is no general policy that covers
19 that area. As I said, the very competent staff we
20 have is involved in reviewing agreements we reach.
21 Q. Did you ever have any conversations
22 with anyone about whether or not they could deal with
23 a competitor of Microsoft?
24 A. That's open ended enough that I'm not
25 sure what you mean at all.
371
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. I mean to keep it open ended as an
2 initial question and then if you say no, I don't have
3 to go through it, but if you say yes, then I go
4 through who you met with and what you said.
5 MR. HEINER: Let's have the open-ended
6 question read back, if we could.
7 (The record was read as follows:
8 "Q. Did you ever have any conversations with
9 anyone about whether or not they could deal
10 with a competitor of Microsoft?")
11 THE WITNESS: I'd say the answer is
12 probably yes because, for example --
13 Q. BY MR. BOIES: If the answer is yes,
14 then --
15 A. No, I want to make -- I think I should
16 give an example so you understand how I've
17 interpreted your question.
18 Q. Could you give me a specific example?
19 A. Yes. IBM is a competitor of ours and
20 people have said to me should we fly out and meet
21 with IBM on this topic. And I've said in some cases
22 yes, we should and in some cases no, we shouldn't.
23 So that's a case where I was giving people advice on
24 whether they should deal with a competitor of
25 Microsoft.
372
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. Were these people within Microsoft?
2 A. People -- yes.
3 Q. Now, have you ever had any personal
4 conversations with anyone other than a Microsoft
5 employee as to whether that person's company could or
6 should deal with a competitor of Microsoft?
7 A. Well, in terms of should, I might have
8 said to somebody that --
9 Q. No, no. I'm not asking what you might
10 have said. What I'm asking is what you remember
11 doing. I'm trying to move this along. I'm trying to
12 stay as concrete as I can and I'm not asking you to
13 speculate about what you might have done.
14 A. Okay. I know --
15 Q. I'm asking you what you remember doing.
16 A. I know concrete cases where I've told
17 customers that I think picking our product as opposed
18 to a competitor's product is in their best interests
19 and so they should pick our product. And in that
20 sense, yes.
21 Q. Have you told people that if they pick
22 your product, they can't use a competitor's product?
23 A. If there's a technical issue about how
24 things won't work together, possibly. But otherwise,
25 no.
373
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. Do you know a Mr. Poole who works at
2 Intuit?
3 A. No.
4 Q. You do not?
5 A. No. I think you're confused.
6 Q. You may be right, but all I need to do
7 is get your testimony down and then people can judge
8 for themselves.
9 So it is your testimony that you do not
10 know anyone who works at Intuit who is named
11 Mr. Poole. Do you know somebody at Microsoft who
12 deals with Intuit who is named Mr. Poole?
13 A. Yes. It's quite distinct.
14 Q. Yes. The distinction actually is at
15 the heart of what I'm going at, sir.
16 What is Mr. Poole's first name?
17 A. Will. That's at least what he goes by.
18 Q. And what has Mr. -- what is Mr. Will
19 Poole's title?
20 A. I have no idea.
21 Q. You have dealt directly and personally
22 with Mr. Poole, have you not, sir?
23 A. Not until very recently.
24 Q. When was the first time that you dealt
25 directly and personally with Mr. Poole?
374
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 A. Well, if you mean was he ever on an
2 e-mail that I went back and forth on, that probably
3 goes back -- that could be any time in the last few
4 years. In terms of actually being in a meeting that
5 Will was in, I think that's quite recent.
6 Q. When?
7 A. Which?
8 Q. Both.
9 A. I said in terms of e-mail, that would
10 be the last couple years. How can I be more concrete
11 than that? I answered the question.
12 Q. Can you be more concrete than the last
13 couple years?
14 A. No.
15 Q. Okay. Now, when with respect to the
16 meeting?
17 A. I don't think I was in a meeting that
18 he was in until maybe two or three months ago.
19 Q. Did you ever have a discussion with
20 Mr. Poole, either orally or through an e-mail, in
21 which you told Mr. Poole what the conditions were
22 pursuant to which Microsoft would give Intuit access
23 to a position on the Active Desktop?
24 A. There may have been mail on that
25 general topic, but I don't remember any specific
375
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 mail.
2 Q. Did you have any discussions with
3 Mr. Poole, apart from e-mail?
4 A. No.
5 Q. Did you tell Mr. Poole in words or in
6 substance that Intuit could get access to a position
7 on the Active Desktop only if it would agree not to
8 deal with Netscape?
9 A. There may have been some discussion
10 about whose browser technology Intuit chooses to
11 integrate its products with. There certainly wasn't
12 anything broadly about dealing with Netscape.
13 Q. Let me try to be as precise as I can.
14 Did you tell Mr. Poole in words or in substance that
15 if Intuit wanted to have access to a position on the
16 Active Desktop, Intuit would have to agree to use
17 Microsoft's browser technology and not use Netscape's
18 browser technology?
19 A. I don't remember that specifically, but
20 I do know that we were, in various time periods,
21 endeavoring to get Intuit to choose the component
22 ties to IE technology as the way that Quicken -- the
23 default way that Quicken would bring up a browser.
24 In fact, they've always supported both browsers at
25 all times.
376
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. My question to you is whether you told
2 Mr. Poole either orally or through e-mail that in
3 order for Intuit to get access to a position on the
4 Active Desktop, Intuit would have to agree not to use
5 the Netscape browser technology? Did you tell
6 Mr. Poole that orally or through e-mail?
7 A. I know we were talking with Intuit
8 about using IE as the default browser because of our
9 technology. So in that sense of being a default, we
10 were trying to get them to favor IE. But I don't
11 remember any specific thing beyond that.
12 Q. So is it your testimony that you do not
13 remember telling Mr. Poole in words or in substance
14 that if Intuit was to have access to a position on
15 the Active Desktop, Intuit would have to agree not to
16 use the Netscape browser technology?
17 A. Intuit has supported the Netscape
18 browser technology at all times and I never thought
19 there was any chance of avoiding them supporting the
20 Netscape browser technology. I did think there was a
21 chance that we would become the default and I was
22 hoping we could convince them that it made sense for
23 them to make us the default.
24 Q. Default browser?
25 A. That's right.
377
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. I understand that's what you said and I
2 do want to explore that, but I want to first be clear
3 that it is your testimony that you never told -- or
4 at least you don't recall ever telling Mr. Poole in
5 words or in substance that in order to get access to
6 a position on the Active Desktop, Intuit would have
7 to agree not to deal with Netscape or not to use the
8 Netscape browser technology?
9 A. I don't remember using those exact
10 words.
11 Q. How about substance?
12 A. In terms of substance, my desire to get
13 us to be the default did imply a favorable position
14 for us relative to other browsers.
15 Q. Is it fair to say that your position
16 with respect to wanting to become the default browser
17 for Intuit meant that the Microsoft browser would
18 have a more favorable position, but it would not
19 preclude Intuit from dealing with Netscape; is that
20 correct?
21 A. That's right.
22 Q. Now, I want to follow up on that issue,
23 but before I do, I want to be absolutely certain that
24 I have your testimony now clear. And that is,
25 leaving aside the issue of becoming the default
378
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 browser, did you ever tell Mr. Poole in words or in
2 substance that in order for Intuit to have access to
3 a position on the Active Desktop, Intuit would have
4 to agree not to deal with Netscape or not to use the
5 Netscape browser technology? Did you ever
6 communicate that to Mr. Poole in words or in
7 substance?
8 A. You can't leave out the idea of the
9 default browser. It's nonsensical to say did you do
10 that but leaving out the notion of the default
11 browser. The substance of us being the default
12 browser is that that's a favorable position for our
13 browser. So what you've just asked me is
14 nonsensical.
15 Q. Does making Internet Explorer the
16 default browser preclude Intuit from dealing with
17 Netscape?
18 A. In a specific way, yes.
19 Q. In what way?
20 A. Any deal that relates to them being the
21 default browser.
22 Q. Other than a deal that involves them
23 becoming the default browser, does it preclude Intuit
24 from dealing with Netscape?
25 A. Not necessarily.
379
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. So that Intuit could make Internet
2 Explorer its default browser but still deal with
3 Netscape with respect to Netscape's browser, correct?
4 A. Intuit at all times has supported the
5 Netscape browser.
6 Q. Now, I think it has to be clear from
7 what you just said that it is your view that becoming
8 the default browser does not preclude Intuit from
9 dealing with Netscape completely in terms of
10 browsers; is that fair?
11 A. Well, it was the issue that would have
12 been of the most interest to us.
13 Q. I'm not asking what the interest was
14 that you had or what the issue was that was of most
15 interest to you. What I'm asking is whether, aside
16 from the issue of the default browser, have you ever
17 told Mr. Poole in words or in substance that in order
18 for Intuit to get access to a position on the Active
19 Desktop, Intuit would have to agree not to deal with
20 Netscape or not to use the Netscape browser
21 technology at all?
22 A. That question doesn't make sense to me.
23 If you say that somebody is not the default, you're
24 certainly affecting how they deal with you on the
25 browser.
380
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. Would you explain what you mean by
2 that?
3 A. We wanted to convince Intuit to make us
4 the default browser.
5 Q. And making you the default browser,
6 does that preclude them from dealing with Netscape at
7 all in terms of browsers?
8 A. Not in every respect, no.
9 Q. Okay, not in every respect.
10 Did you ever tell Mr. Poole in words or
11 in substance that if Intuit was going to obtain
12 access to a position on the Active Desktop, Intuit
13 would have to stop supporting the Netscape browser?
14 A. Well, supporting can mean a lot of
15 different things. I know that --
16 Q. I mean what you mean when you said it.
17 A. I never expected at any time that they
18 would not support the Netscape browser in terms of
19 running with it, working with it, supporting it and
20 all those things. In terms of did I use that
21 specific word, no, I don't -- I don't have a
22 recollection. But, you know, support can mean quite
23 a few things.
24 Q. What I'm not doing right now is asking
25 what you meant by support. What I'm asking you is
381
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 whether you told Mr. Poole that. Do you understand
2 the distinction?
3 A. Did I use those words?
4 Q. That you told Mr. Poole --
5 A. See, if you're going to ask me did I
6 use the exact words, you can ask me that question.
7 Or if you're going to ask me if I said something like
8 that, that's okay, but then I have to actually
9 understand what the words -- what you mean by the
10 words.
11 Q. Let's take it one step at a time.
12 Did you tell Mr. Poole that if Intuit
13 was to have access to a position on the Active
14 Desktop, Intuit would have to stop "supporting" or
15 could no longer "support" the Netscape browser?
16 A. What does it mean when you keep going
17 in and out of quotes like that?
18 Q. It means you used the word "supporting"
19 or you used the word "support."
20 MR. HEINER: In that case, you should
21 put the document in front of the witness.
22 MR. BOIES: I'm just asking whether he
23 ever communicated that orally or in writing or by
24 e-mail to Mr. Poole.
25 MR. HEINER: I think you twice
382
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 testified in the scope of your questions about things
2 he said. And so if you have a document, at some
3 point, just put it --
4 MR. BOIES: I'm just asking him whether
5 he said it.
6 THE WITNESS: Whether I said what?
7 Q. BY MR. BOIES: Well, whether you told
8 Mr. Poole that if Intuit was to have a position on
9 the Active Desktop, that Intuit would have to agree
10 to stop supporting or could no longer support, that
11 is, you used the word "support," the Netscape
12 browser? Did you do that, sir, in e-mail
13 communications or orally or any other form of
14 communications to Mr. Poole?
15 A. I don't remember using those words, if
16 that's the question.
17 Q. Do you remember whether or not you used
18 those words?
19 A. No.
20 Q. Let me turn now to the substance of
21 what you told Mr. Poole. And what I'd like you to
22 describe for me in your own words is what did you
23 tell Mr. Poole, either orally or by any other form of
24 communication, Intuit would have to agree to in order
25 to get access to a position on the Active Desktop?
383
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 MR. HEINER: Objection. I may be
2 mistaken, but I think the question lacks foundation.
3 MR. BOIES: I will rephrase the
4 question.
5 Q. What, if anything, did you tell
6 Mr. Poole --
7 A. I'm not sure if I told Mr. Poole or
8 Mr. Chase or Todd Nielson or who, but I'm sure I
9 communicated that the kind of support Intuit had been
10 giving where Netscape was the default browser, that I
11 didn't see that as consistent with agreeing with
12 them -- for them to be featured on the active channel
13 bar.
14 Q. I think that goes to what you were
15 saying before, which is that you wanted Microsoft's
16 browser to become the default browser?
17 A. That's right.
18 Q. Now, what I'm trying to do is ask
19 whether you went beyond that in talking to Mr. Poole.
20 Did you say to Mr. Poole that if Intuit is going to
21 get access to a position on the Active Desktop,
22 Intuit had to do something more than simply make IE
23 the default browser?
24 A. That was my goal there, which of course
25 would imply a change in how they'd been supporting
384
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Netscape as the default browser.
2 Q. I understand that you said you wanted
3 IE to be the default browser and that inevitably
4 means that Netscape can't be the default browser
5 because you can only have one default browser; right?
6 A. Right.
7 Q. What I'm now asking is did you go
8 beyond that and say to Mr. Poole that if Intuit was
9 going to get access to a position on the Active
10 Desktop, Intuit would have to do something more than
11 simply make IE the default browser?
12 A. I don't think so.
13 Q. Did you ever say that to Mr. Chase or
14 to anyone else?
15 A. I don't think so.
16 Q. Or communicate it in e-mail or some
17 other communication?
18 A. I included that. So no, I don't think
19 so.
20 Q. I thought you might have included it,
21 but I wasn't sure, so I wanted to be clear.
22 MR. HEINER: If we've come to a logical
23 stopping point within this small subset of this
24 point, let's break for lunch.
25 MR. BOIES: Okay.
385
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 MR. HEINER: Okay.
2 VIDEOTAPE OPERATOR: The time is 11:54.
3 We're going off the record.
4 (Lunch recess.)
5 * * *
6
7
8
9 I hereby declare, under penalty of
10 perjury, that the foregoing answers are true
11 and correct to the best of my knowledge and
12 belief.
13 EXECUTED AT_____________, WASHINGTON,
14 this_________day of________________, 1998.
15
16 ________________________________
17 BILL GATES
18
19
20
21
22
23
24
25
386
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 STATE OF CALIFORNIA )
) ss.
2 COUNTY OF LOS ANGELES )
3
4 I, Kathleen E. Barney, CSR 5698, a
5 Certified Shorthand Reporter in and for the State of
6 California, do hereby certify:
7 That, prior to being examined, the
8 witness named in the foregoing deposition was by me
9 duly sworn to testify the truth, the whole truth, and
10 nothing but the truth;
11 That said deposition was taken down by
12 me in shorthand at the time and place named therein
13 and was thereafter reduced to typewriting under my
14 supervision; that this transcript is a true record of
15 the testimony given by the witness and contains a
16 full, true and correct record of the proceedings
17 which took place at the time and place set forth in
18 the caption hereto as shown by my original
19 stenographic notes.
20 I further certify that I have no
21 interest in the event of the action.
22 EXECUTED this_______day of____________,
23 1998.
24 ______________________________
25 Kathleen E. Barney, CSR #5698
387
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900




Released Pursuant to 15 U.S.C. §30

10.11.20

Transcripts of Mr. Boies and Mr. Houck Examining Bill Gates’ Lies

Posted in Antitrust, Bill Gates, Courtroom, Microsoft at 8:50 pm by Dr. Roy Schestowitz

Part 1 (of a total of 4)

Gates deposition 1998

Summary: Techrights is curating and maintaining plain text versions of the Gates deposition of 1998, in which years if not decades of the company’s abuses were scrutinised in a face-to-face fashion

Videos of the deposition: First part, second part, third part, fourth part, fifth part, sixth part, seventh part, eighth part, ninth part, tenth part, eleventh part, and last part

Selected transcripts of the deposition: Few annotated transcripts and longer transcripts


1 IN THE UNITED STATES DISTRICT COURT
2 FOR THE DISTRICT OF COLUMBIA
3
4
5 UNITED STATES OF AMERICA, )
)
6 Plaintiff, )
)
7 vs. ) No. CIV 98-1232(TPJ)
)
8 MICROSOFT CORPORATION, )
) CONFIDENTIAL
9 Defendant. )
)
10 _________________________________ )
11
12
13 DEPOSITION OF BILL GATES, a witness
14 herein, taken on behalf of the plaintiffs at
15 9:09 a.m., Thursday, August 27, 1998, at One
16 Microsoft Way, Redmond, Washington, before Kathleen
17 E. Barney, CSR, pursuant to Subpoena.
18
19
20
21
REPORTED BY:
22 Kathleen E. Barney,
CSR No. 5698
23
Katherine Gale
24 CSR No. 9793
25 Our File No. 1-49005

1 APPEARANCES OF COUNSEL:
2 FOR THE UNITED STATES OF AMERICA:
3 UNITED STATES DEPARTMENT OF JUSTICE
BY PHILLIP R. MALONE
4 KARMA M. GIULIANELLI
450 Golden Gate Avenue
5 Box 36046
San Francisco, California 94102
6 (415) 436-6660

7 BOIES & SCHILLER LLP
BY DAVID BOIES
8 80 Business Park Drive
Armonk, New York 10504-1710
9 (914) 273-9800
10 FOR MICROSOFT CORPORATION:
11 MICROSOFT CORPORATION
LAW AND CORPORATE AFFAIRS
12 BY DAVID A. HEINER
WILLIAM H. NEUKOM
13 One Microsoft Way
Redmond, Washington 98052
14 (425) 936-3103
15 SULLIVAN & CROMWELL
BY RICHARD J. UROWSKY
16 125 Broad Street
New York, New York 10004
17 (212) 558-3546
18 FOR THE PLAINTIFF STATES:
19
STATE OF NEW YORK
20 OFFICE OF ATTORNEY GENERAL
BY STEPHEN D. HOUCK
21 GAIL P. CLEARY
RICHARD GRIMM
22 120 Broadway
New York, New York 10271-0332
23 (212) 416-8275
24 ALSO PRESENT: PRISCILLA ALVAREZ, Paralegal
MICHEL CARTER, Video Operator
25
BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 I N D E X
2 WITNESS EXAMINATION BY PAGE
3 Bill Gates Mr. Houck 5
4 Mr. Boies
5
GOVERNMENT
6 EXHIBITS:
7 337 E-mail dated 5/22/96 23
8 338 "Microsoft OEM Sales" 30
9 339 E-mail dated 10/25/94 36
10 340 E-mail dated 3/27/97 45
11 341 E-mail dated 4/6/95 51
12 342 E-mail dated 4/24/95 57
13 343 E-mail dated 1/31/95 70
14 344 Series of e-mails, first one 75
dated 4/12/95
15 345 "The Internet Tidal Wave" 77
16 346 Series of e-mails, first one 85
17 dated 5/3/95
18 347 "Financial Analysts Day 86
Executive Q & A"
19
348 Series of e-mails, first one 88
20 dated 1/8/97
21 349 Series of e-mails, first one 93
dated 7/14/97
22
350 Series of e-mails, first one 94
23 dated 6/12/97
24
25
BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1
2 351 E-mail dated 6/23/95 96
3 352 E-mail dated 7/28/96 114
4 353 E-mail dated 12/1/96 114
5 354 E-mail dated 5/19/96 121
6 355 Financial Times Article 130
7 356 "Netscape: Sitting Pretty 138
or Sitting Duck?"
8
357 PC Magazine Online Article 142
9
358 E-mail dated 1/5/96 143
10
359 PC Value Analysis 146
11
360 E-mail dated 12/16/97 146
12
361 E-mail dated 9/8/97 147
13
362 E-mail dated 4/25/97 149
14
363 E-mail dated 5/15/98 152
15
364 The Financial Times Comment 172
16 and Analysis
17
18
19
20
21
22
23
24
25
BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 BILL GATES,
2 a witness herein, having been duly sworn, was deposed
3 and testified as follows:
4
5 MR. HOUCK: Mr. Heiner, I understand
6 you want to make a statement?
7 MR. HEINER: Very briefly. This
8 deposition is being taken, of course, pursuant to the
9 protective order in the case and we will exercise our
10 rights under that to have this transcript treated
11 confidentially.
12 MR. HOUCK: Okay.
13 MR. HEINER: We'll make the appropriate
14 designations in accordance with the schedule set out
15 in the protective order.
16
17 EXAMINATION
18 BY MR. HOUCK:
19 Q. Mr. Gates, as I've indicated, my name
20 is Steve Houck, I represent the plaintiff states.
21 I'll be examining you first and I suspect that
22 Mr. Boise on behalf of the U.S. Government will have
23 some questions for you. I understand from your
24 lawyers you don't want to be here any longer than
25 necessary. I will do my best to accommodate that.
5 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 If I move too quickly, let me know and I'll slow
2 down.
3 I'll be showing you some documents
4 during the course of the deposition and I may point
5 out to you, to speed up the process, portions of the
6 document that pertain to the questions I have, but
7 feel free if you want to take more time to read the
8 entire document to get it in context.
9 Also, if you don't understand any of my
10 questions, if they are unclear in any way, let me
11 know and I'll try to make them a little more clear.
12 I understand that you are one of the
13 co-founders of Microsoft; is that correct?
14 A. Yes.
15 Q. When was the company founded?
16 A. 1975.
17 Q. What positions have you held with
18 Microsoft since then?
19 A. Partner, chairman, CEO.
20 Q. What is your present title?
21 A. Chairman and CEO.
22 Q. Have you been deposed before, sir?
23 A. Yes.
24 Q. In other litigations?
25 A. I'm sorry?
6 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q. In other litigations? You've been
2 deposed in other litigated matters where Microsoft
3 was a defendant; is that correct?
4 A. I've been deposed in cases where
5 Microsoft wasn't a defendant and in cases where it
6 was the defendant.
7 Q. So you understand the deposition
8 process and how it works? Any questions before we
9 proceed into the substance about the procedures?
10 A. I'm not sure what you mean.
11 Q. Well, are you comfortable with the
12 procedures here? Do you have any questions before we
13 proceed about how this deposition works? You have
14 the right to speak to counsel if you'd like. As I
15 indicated, if you have any clarifications with
16 respect to any of my questions, please ask me, but I
17 assume you understand the general process since
18 you've been deposed before.
19 With whom have you spoken in
20 preparation for the deposition today? Anyone other
21 than your counsel?
22 A. No.
23 Q. I assume you've reviewed written
24 materials in connection with your preparation for the
25 deposition today; is that correct?
7 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A. I was shown some written documents.
2 Q. Did you review in that connection any
3 documents that were prepared especially to prepare
4 you for this deposition as opposed to documents that
5 were generated in the normal course of Microsoft's
6 business?
7 A. No.
8 Q. Do you keep any work-related files at
9 home as opposed to the office?
10 A. In general?
11 Q. Yes.
12 A. I don't have a filing system at home.
13 I sometimes take paper home, but I don't keep paper
14 there.
15 Q. Do you use a computer at home?
16 A. Yes, I do.
17 Q. Do you use that on work-related
18 matters?
19 A. Some of the computers I do and some of
20 the computers I don't.
21 Q. Do you know whether those computers
22 were searched in connection with a document search in
23 this litigation?
24 A. Those computers don't have storage.
25 Q. But you don't know whether the hard
8 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 disk was searched for any material that might be
2 there that --
3 A. You should understand it's a portable
4 computer, it moves back and forth. That's the
5 computer with my e-mail, it moves back and forth. So
6 it's the same computer in my office as at home.
7 Q. I see, okay. And I assume the computer
8 in your office was searched for relevant e-mails; is
9 that your understanding?
10 A. Yes.
11 Q. I gather from time to time you give
12 interviews to the press; is that right?
13 A. Yes.
14 Q. During those interviews, does anybody
15 from Microsoft or Microsoft's PR firm take notes or
16 record remarks that you make to the press?
17 A. Sometimes they do. Most times they
18 don't.
19 Q. Who would be responsible for doing that
20 at Microsoft when that's done?
21 A. Well, if there is nobody in the
22 meeting, then no one. If there's -- usually it would
23 have to be somebody that was actually present.
24 Q. Correct. Is there somebody in the
25 Microsoft PR department that is responsible for
9 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 making notes or recordings of interviews you give to
2 the press?
3 A. I said if there is someone in the
4 meeting, then they can choose to do so.
5 Q. I understand that.
6 A. There is no particular person who comes
7 to those meetings. Sometimes there is no one in
8 those meetings and sometimes there is someone in the
9 meeting.
10 Q. When there is somebody there, who
11 undertakes to take notes or make recordings of your
12 remarks?
13 A. The person who is there.
14 Q. And who has that been in the past? Can
15 you identify any specific people who would have done
16 that?
17 A. Well, I wouldn't know all their names.
18 Sometimes Mitch Matthews might be in interviews.
19 Sometimes -- Katie Erling was in when I talked to an
20 analyst once. Marianne Allison, not in the last few
21 years. Melissa Wagner maybe 15 years ago. Pam
22 Edstrom. Dean Katz. Collins Hemingsway.
23 I don't remember everyone who ever sat
24 in an interview with me.
25 Q. Okay. Have you had any communications
10 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 with anyone from a company outside Microsoft with
2 respect to whether or not somebody from that company
3 might testify at the trial of this matter?
4 A. No.
5 Q. Sir, are you familiar with the
6 Microsoft Press computer dictionary?
7 A. No.
8 Q. You've never cracked it open before?
9 A. No.
10 Q. Well, I'll introduce you to it. I have
11 here the Microsoft Press computer dictionary. It's
12 the third edition dated 1997. It says -- it claims
13 to be the authoritative source of definitions for
14 computer terms, concepts and acronyms from the
15 world's most respected computer software company.
16 I'll give you a softball question.
17 Would you agree that Microsoft is the
18 world's most respected computer software company?
19 A. Some people would agree with that, some
20 people wouldn't.
21 Q. What's your opinion?
22 A. I think we are the most -- if you took
23 it on a statistical basis, yes, we'd be the most
24 respected software company.
25 Q. This computer dictionary defines
11 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 operating system as follows: "The software that
2 controls the allocation and usage of hardware
3 resources such as memory, central processing unit,
4 time, disk space and peripheral devices."
5 Is that an accurate definition of an
6 operating system?
7 A. Well, the notion of what's in an
8 operating system has changed quite a bit over time.
9 So that definition is not really complete in terms of
10 how people think of operating systems in the last
11 decade or so.
12 Q. So this definition in the 1997
13 dictionary is incomplete in your estimation?
14 A. What I said is that over time the
15 number of things that are in operating systems has
16 increased and so if you want to look at operating
17 systems in the last decade, you'd say the definition
18 is incomplete.
19 Q. Is it accurate?
20 Let me read it to you once again.
21 "The software that controls the allegation and usage
22 of hardware resources such as memory, central
23 processing unit, time, disk space and peripheral
24 devices."
25 A. I said in terms of operating systems in
12 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 the last decade, it's an incomplete definition.
2 Q. In what respects is it incomplete?
3 A. There are aspects of the operating
4 systems in the last decade that aren't included in
5 that definition.
6 Q. And what aspects?
7 A. Do you want -- I mean it's a long
8 answer to that question. Shall we go through them
9 all?
10 Q. Sure, go ahead.
11 A. Okay. Well, typically the way people
12 interact with computers now is on a graphical basis
13 and so the constructs that relate, for example, to
14 fonts are now, in the last ten years, a typical part
15 of the operating system.
16 For example, the idea of how you take a
17 font and render it at different sizes, whether you
18 have descenders, how you deal with ligatures, how you
19 deal with, say, Arabic ellision, how you deal with
20 Kanji characters or Hangul characters. And so there
21 is a font rasterizer and a set of font resources and
22 a set of font substitution algorithms that are
23 included in the computer. So that when people write
24 applications that run on top of that computer, they
25 can call on those resources in order to render the
13 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 glyphs on the computer screen. And there is a lot of
2 utility software that relates to the management of
3 those fonts.
4 Q. Is that the end of your answer?
5 A. No. No. Another thing that is typical
6 in operating systems for the last decade is a set of
7 utilities for managing the disk space that's on the
8 computer dealing with backup, dealing with being out
9 of memory, dealing with security aspects of managing
10 the disk there. And so the various utility programs
11 help you make sure the disk is being used for the
12 most recent information, to help you archive that
13 information in a variety of ways. So that's
14 something that has been in operating systems over the
15 last decade.
16 Also operating systems have a shell
17 type function that is a way of interacting with the
18 user to navigate through the informational resources.
19 Actually, that's more than a decade that that's been
20 a typical inclusion in the operating system.
21 Do you want me to keep going on?
22 Q. Yeah, finish your answer and I'll ask
23 you another question. Let me know when you're done.
24 A. There's enough things here that I doubt
25 I'll be able to hit them all, but I'll hit another
14 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 set of them.
2 It's typical in terms of interacting
3 with the user to have some sort of facility for
4 helping the user. That is, if the user is confused
5 about the commands, which utility to use and what to
6 do. It's typical now to have something where they
7 can give some sort of ask for help and help will come
8 up onto the computer screen and be displayed in order
9 to let them interact.
10 It's also typical now not just to
11 map the low-level hardware but also to have very
12 high-level graphics support that's even independent
13 of what's in the hardware that's there. It's typical
14 to have remote booting capabilities so you can get
15 the operating system that can come across the
16 network. It's typical to have things that relate to
17 viruses that you find in computer systems.
18 Let's see. It's also typical to have
19 as well what you think of as disk management
20 utilities, some application type programs that let
21 you go in and show off some of the strengths of that
22 operating system, what's actually available with that
23 system. So, for example, if you take a Macintosh,
24 when you get it, it has a variety of little things
25 that you can play around with.
15 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 It's also typical to have a thing like
2 a control panel, I don't know if you've used that on
3 the Macintosh, but it lets you go in do things like
4 set the sound settings and set the keyboard settings,
5 the keyboard repeat factor. It's -- because of the
6 way operating systems now handle languages, there are
7 a lot of things that have to do with configuring the
8 system in that respect.
9 In the whole area of networking there's
10 more and more that's being included in operating
11 systems to let people get out and do things,
12 including often the ability to create electronic
13 mail, receive electronic mail, deal with the system
14 in that fashion.
15 Q. Is it your testimony that the control
16 panel is part of the operating system?
17 MR. HEINER: Objection. What operating
18 system are we talking about?
19 MR. HOUCK: Macintosh operating system.
20 MR. HEINER: Okay.
21 THE WITNESS: Well, they have a control
22 panel that is part of the Macintosh OS, yes.
23 Q. BY MR. HOUCK: Is that part of any OS
24 marketed by Microsoft?
25 A. No. The Macintosh control panel is
16 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 actually unique to the Macintosh operating system.
2 It only appears in the Macintosh operating system.
3 Q. During the course of your answer, you
4 used the word "application" several times, and let me
5 see if you agree with the definition in the Microsoft
6 dictionary of that term.
7 Application is there defined as:
8 "A program designed to assist in the performance of a
9 specific task, such as word processing, accounting or
10 inventory management."
11 Is that an accurate definition,
12 Mr. Gates?
13 A. Could you read it again?
14 Q. Sure. "A program designed to assist in
15 the performance of a specific task, such as word
16 processing, accounting or inventory management."
17 A. I'd say it's a pretty vague definition.
18 Q. Is it accurate, as far as it goes?
19 A. I'd say it's vague but accurate.
20 Q. Another term I'm sure we're going to be
21 using throughout the course of the deposition is Web
22 browser. And let me read you the definition from
23 your company's dictionary and see if you think that's
24 accurate.
25 Web browser is defined by the Microsoft
17 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 computer dictionary as follows: "A client
2 application that enables a user to view HTML
3 documents on the World Wide Web, another network for
4 the user's computer, follow the hyperlinks among them
5 and transfer files."
6 Is that accurate?
7 A. It's actually describing browsing
8 functionality.
9 Q. Is it an accurate definition of
10 browsing functionality?
11 A. It describes part of what you do when
12 you browse.
13 Q. What is your definition of a Web
14 browser?
15 A. I'd say browsing technology is what
16 lets you navigate through -- typically it means
17 something that lets you do HTML display and
18 navigation.
19 Q. Is that what you mean when you use the
20 term Web browser?
21 A. Well, software that lets you do Web
22 browsing is sometimes referred to as a Web browser.
23 Q. And Microsoft has marketed a Web
24 browser under the trade name Internet Explorer; is
25 that correct?
18 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A. We've used the term Internet Explorer
2 to refer to the Internet technologies in Windows as
3 well as some stand-alone products we've done.
4 Q. Let me see if you agree with this
5 definition in the 1997 edition of Microsoft's
6 computer dictionary. The definition is of the term
7 Internet Explorer.
8 Internet Explorer is defined as
9 follows: "Microsoft's Web browser introduced in
10 October, 1995."
11 Is that an accurate definition of
12 Internet Explorer?
13 A. I'm not sure why they say October. I
14 don't think that's right.
15 Q. When is your recollection that it was
16 introduced?
17 A. Well, we shipped Windows 95, including
18 browsing functionality, in August, 1995.
19 Q. Was IE shipped as a stand-alone product
20 in or about October, 1995?
21 A. No.
22 Q. Was it ever shipped as a stand-alone
23 product?
24 A. Well, it depends on what you are
25 referring to. If you are talking about Unix or the
19 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Macintosh, we did create a set of bits that stood by
2 themselves and could be installed on top of those
3 operating systems.
4 Q. When were those versions of IE first
5 marketed?
6 A. Certainly not in October, 1995.
7 Q. Apart from the timing issue, would you
8 agree that Internet Explorer is defined here
9 correctly as Microsoft's Web browser?
10 A. Did you actually read what was in
11 there?
12 Q. Yeah, I read the first sentence. I can
13 read you the whole thing if you'd like.
14 A. Well, it seems strange. If you're
15 trying to use the dictionary, you might as well read
16 what it says. You could show it to me.
17 Q. I'll read it to you and I'll show it to
18 you and you tell me if you think there is anything in
19 here that is inaccurate.
20 The full entry of Internet Explorer
21 reads as follows: "Microsoft's Web browser
22 introduced in October, 1995. Internet Explorer is
23 now available in Windows and Macintosh versions.
24 Later versions provide the ability to incorporate
25 advanced design and animation features in the Web
20 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 pages and recognize ActiveX controls and Java
2 applets."
3 Take a look at it and tell me if there
4 is anything else in there that you think is
5 inaccurate?
6 A. Well, certainly the product we shipped
7 that was before October, 1995 was Windows 95. The
8 browsing functionality we had in it we've updated
9 quite a bit several times. And so defining Internet
10 Explorer to be what we shipped just on one particular
11 date can't be considered accurate. You have to say
12 that many times we've taken the browsing
13 functionality in Windows, which we refer to as
14 Internet Explorer, and we've updated that
15 functionality. So you can't really pin the
16 definition to a particular date. It's really a brand
17 name we use for those technologies.
18 Q. Was this definition accurate in 1997
19 when Microsoft's computer dictionary was sold to the
20 public?
21 A. I already told you that reference to
22 October, 1995 certainly makes the definition
23 inaccurate.
24 Q. Apart from that, is it accurate?
25 A. It's not accurate to say that Internet
21 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Explorer is defined at a single point in time, that
2 it's one set of bits because it's a brand that we
3 have used for a set of technologies that have evolved
4 over time. And in that sense I would take exception
5 to the way that the book, that I've never seen there,
6 happened to define it.
7 Q. You've described the Web browser as a
8 killer application, haven't you?
9 A. I'm not sure what you're talking about.
10 You'd have to show me the context.
11 Q. Okay.
12 MR. HOUCK: I'd like to mark as
13 Government Exhibit 1 a memorandum from Mr. Bill Gates
14 to the executive staff dated May 22, 1996.
15 MR. HEINER: We'd like three copies,
16 Mr. Houck.
17 MR. HOUCK: Unfortunately, I have one
18 for the witness. This is yours, Mr. Gates. You can
19 use the original marked by the court reporter and
20 we'll hand out a keepsake for counsel. We have just
21 one, unfortunately.
22 MR. HEINER: You were not expecting
23 more than one of us on this side of the table?
24 MR. HOUCK: I expected to have one
25 lawyer to be the principal representative of
22 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Mr. Gates and if you feel incapable of that, maybe at
2 the break we can make other copies.
3 MR. HEINER: We're capable of having
4 one, but we'd like to have our side have --
5 MR. HOUCK: In the past I've been at
6 depositions where several DOJ and state
7 representatives have appeared and we've received just
8 one ourselves from Microsoft, so I extended you the
9 same courtesy, sir.
10 MR. HEINER: Okay.
11 (The document referred to was marked
12 by the court reporter as Government Exhibit 337 for
13 identification and is attached hereto.)
14 Q. BY MR. HOUCK: I'd like you to look at
15 Exhibit 1, Mr. Gates, right here in front of you.
16 This is a memorandum that purports to be from you to
17 your executive staff dated May 22, 1996, and it
18 attaches, for want of a better word, an essay
19 entitled "The Internet PC" dated April 10, 1996.
20 Do you recall writing that essay?
21 A. It looks like this is an e-mail, not a
22 memorandum.
23 Q. Do you recall writing the essay dated
24 April 10, 1996 entitled "The Internet PC"?
25 A. Well, it looks like an essay I wrote.
23 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 I don't remember specifically, but it does look like
2 something I wrote.
3 Q. The portion I refer you to is at the
4 bottom of the first page under the heading called
5 "The Latest Killer App." Do you see that?
6 A. I see a heading.
7 Q. First paragraph under that heading
8 reads as follows: "Our industry is always looking
9 for the next 'killer application'-- for a category of
10 software that, by its utility and intelligent design,
11 becomes indispensable to millions of people. Word
12 processors and spreadsheets were the killer
13 applications for business PCs starting in 1981."
14 And the next sentence reads, "The
15 latest confirmed 'killer app' is the web browser."
16 Do you recall writing that, sir?
17 A. No.
18 Q. Do you have any reason to believe you
19 didn't write it?
20 A. No.
21 Q. Can you explain what you meant here by
22 describing the Web browser as a "killer app"?
23 A. I just meant that browsing would be, in
24 our view, a popular thing, not necessarily on the Web
25 but just browsing in general would be a popular
24 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 activity.
2 Q. Is a killer application an application
3 that drives sales of other products like operating
4 systems and hardware?
5 A. No.
6 Q. Do you have a definition in your own
7 mind of killer application?
8 A. It means a popular application.
9 Q. Let me resort again to the Microsoft
10 computer dictionary, and I'll read you what that says
11 about killer applications. You may disagree with it,
12 and if so, you can tell me.
13 The Microsoft computer dictionary, 1997
14 edition, defines killer app as follows, and it gives
15 two definitions. And I'll be very complete this
16 time, Mr. Gates.
17 The first definition is, "An
18 application of such popularity and widespread
19 standardization that fuels sales of the hardware
20 platform or operating system for which it was
21 written."
22 Do you agree with that definition?
23 A. Are you saying to me that there is more
24 in there and you're just reading me part of it?
25 Q. I'm going to read you the second
25 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 definition as well.
2 A. So you're asking me about it without
3 reading me the whole thing?
4 Q. No, sir. There's two definitions.
5 You're familiar with dictionaries, I take it?
6 Sometimes they have more than one definition of a
7 term; correct?
8 A. Sometimes terms have more than one
9 meaning, so it's appropriate that dictionaries would
10 give the two different meanings. And generally
11 before you'd ask somebody if they agreed with the
12 dictionary, you'd actually give them the benefit of
13 reading them what is in the dictionary, not just a
14 part of it.
15 MR. BOISE: Move to strike the answer
16 as nonresponsive.
17 Q. BY MR. HOUCK: I read you the first
18 definition and asked you if you agreed with that
19 definition.
20 A. I don't think it's the only definition.
21 Q. Is that an accurate definition?
22 A. I'd like to hear what the other --
23 Q. I'll read it to you. The second
24 definition is, "An application that supplants its
25 competition."
26 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Let me go back and read you the first
2 definition again, now that you've heard both of them.
3 The first definition reads as follows:
4 "An application of such popularity and widespread
5 standardization that fuels sales of the hardware
6 platform or operating system for which it was
7 written."
8 A. I already told you that my definition
9 of killer app is a very popular application.
10 Q. Is this definition accurate?
11 A. I told you, when I use the term "killer
12 application," in particular when I use it in a piece
13 of e-mail, what I mean by it -- I'm sure there's
14 people --
15 Q. I understand. You've told me that, but
16 there's another question on the table. Do you have
17 any disagreement with this definition?
18 A. I think most people when they use the
19 word "killer app" are not necessarily tying it to any
20 relationship to hardware.
21 Q. What about a relationship to an
22 operating system?
23 A. Usually they're just talking about it
24 being a very popular application. I certainly know
25 of things that have been referred to as killer
27 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 applications that haven't driven hardware sales or
2 operating system sales.
3 Q. What other applications would you
4 identify as being killer applications?
5 A. Applied simulator.
6 Q. Any others?
7 A. Well, you always have to take a year
8 and a context for those things. For example, when
9 desktop publishing software became popular in the
10 1980's, many people referred to it that way. When
11 people are talking about interactive TV, they thought
12 video on demand would be a killer application. And
13 something went wrong because, you know, the whole
14 thing never caught on. But people had been using
15 that term, the idea of letting people watch movies,
16 as something that would be extremely popular.
17 Q. In what time frame was the Web browser
18 a killer application?
19 A. Well, I think Web browsers became very
20 popular between, oh, '95 and '97 they became very
21 popular.
22 Q. So at that point in time the Web
23 browser was, in your definition, a killer
24 application?
25 A. They were very popular, yeah.
28 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 MS. CLEARY: If I could interrupt for a
2 minute, I'd just like to keep the record straight.
3 We need to renumber Exhibit 1 as Exhibit 337.
4 Q. BY MR. HOUCK: Microsoft currently
5 markets operating systems for personal computers;
6 correct?
7 A. Yes.
8 Q. What's the current version called?
9 MR. HEINER: Objection.
10 Q. BY MR. HOUCK: What operating systems
11 for personal computers does Microsoft currently have
12 on the marketplace?
13 A. Well, we have MS DOS. We've got
14 Windows CE that's got a lot of different versions.
15 We've got Windows 3x, Windows 95, Windows 98,
16 Windows NT Version 3, Windows NT Version 4.
17 Q. Are all those operating systems
18 currently being marketed by Microsoft?
19 A. Yes.
20 Q. Does Microsoft endeavor to track its
21 market share with respect to operating systems on
22 personal computers?
23 A. There's not some unified effort to do
24 that.
25 Q. Is there anybody in Microsoft
29 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 responsible for trying to determine what Microsoft's
2 market share is with respect to PC operating systems?
3 A. No.
4 Q. Have you seen any figures indicating
5 what Microsoft's market share is with respect to
6 operating systems on personal computers?
7 A. From time to time people doing
8 marketing analysis may pull together some figures
9 like that. And depending on, you know, what the
10 context is, they will be different numbers.
11 Q. Do you have any -- strike that.
12 MR. HOUCK: I'd like to mark as
13 Exhibit 338 a Fiscal Year 1996 Midyear Review dated
14 January 22, 1996.
15 (The document referred to was marked
16 by the court reporter as Government Exhibit 338 for
17 identification and is attached hereto.)
18 Q. BY MR. HOUCK: Is Exhibit 338 the type
19 of document you referred to that contains market
20 share information?
21 A. I don't know anything about 338.
22 Q. Have you ever seen it before?
23 A. No.
24 Q. Do you know what position Joachim
25 Kempin held in January, 1996?
30 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A. Yes.
2 Q. What was his position at that time?
3 A. He is in charge of our relationships
4 with hardware manufacturers.
5 Q. Do you have any understanding that in
6 connection with that position he endeavored to
7 determine what Microsoft's market share was with
8 respect to operating systems sold to hardware
9 manufacturers?
10 A. I'm sorry, say that again.
11 Q. Do you have any understanding that one
12 of Mr. Kempin's job responsibilities in that
13 connection in 1996 was to try to determine what
14 Microsoft's market share was with respect to
15 operating systems sold to hardware manufacturers?
16 A. No.
17 Q. I'd like you to turn to the page of
18 this document that ends in 022. And the heading
19 reads "x86 OS Analysis for Fiscal Year '96."
20 A. Okay.
21 Q. On the page that is titled "x86 OS
22 Analysis for Fiscal Year '96" appears a statement,
23 "All other competitive licenses, less than 5%"
24 Do you have any understanding that in
25 or about early 1996 Microsoft's share of the market
31 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 with respect to operating systems sold for x86
2 computers was in the vicinity of 95 percent?
3 A. No.
4 Q. What is your understanding of what the
5 Microsoft market share was at that time?
6 A. I wouldn't know.
7 Q. Do you have any idea, as you sit here
8 today, what Microsoft's market share is with respect
9 to operating systems sold for x86 architecture
10 computers?
11 A. Well, piracy alone is greater than 5
12 percent. But no, I don't know the number.
13 Q. What other companies besides Microsoft
14 sell operating systems for x86 architecture
15 computers?
16 A. There's a great number.
17 Q. Can you identify them?
18 A. Santa Cruz. Red Brick. Caldera. IBM
19 in many different products. Sun Microsystems.
20 Microware. Wind River.
21 Those are all I can think of right now.
22 Q. Do you have any estimate as to what the
23 collective market share of those companies is with
24 respect to operating systems sold for x86
25 architecture PCs?
32 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A. No.
2 Q. Is it under 10 percent?
3 A. Well, I've said to you I don't know the
4 numbers.
5 Q. Can you estimate it?
6 A. Actually, I know something about
7 piracy. Are you including that or not?
8 Q. No, sir. My question was, you've
9 identified a number of companies that market
10 operating systems for x86 PCs; correct?
11 A. Yes.
12 Q. And the question is, do you have any
13 understanding at all as to approximately what their
14 collective market share is with respect to operating
15 systems sold on x86 machines that come equipped with
16 operating systems?
17 A. I wouldn't be the best source for that
18 data.
19 Q. Can you answer my question?
20 A. I don't know their market share.
21 Q. You are unable to estimate it; is that
22 right?
23 A. I don't think I'd be accurate in
24 guessing and I don't think it's a good idea to guess.
25 Q. You have no idea whatsoever as to
33 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 approximately what the market share is; is that
2 correct?
3 A. I'm reluctant to give a number because
4 I don't consider myself someone who knows the volumes
5 involved.
6 Q. You have no understanding whatsoever as
7 to the approximate market share these companies have?
8 A. Are you asking me for a number or just
9 a --
10 Q. I'm asking for your best --
11 A. If you're asking does Microsoft sell
12 more than they do, yes, I can safely say that. But
13 when you say to me what is their share, which I
14 thought was one of the questions you asked, I'd say
15 it's not good for me to guess at the number.
16 Q. Do you have any understanding as to
17 whether the collective market share of those
18 companies is under 20 percent?
19 A. What time period were you talking
20 about? I guess I should -- what time period are you
21 saying?
22 Q. Fiscal year 1997. Do you have any
23 understanding whatsoever as to whether or not the
24 collective market share of all of Microsoft's
25 competitors in operating systems for x86 PC machines
34 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 is under 20 percent?
2 A. It's probably under 20 percent.
3 Q. Okay. Any idea how far under?
4 A. No.
5 Q. Who is the author of documents you've
6 seen at Microsoft with respect to market share
7 information on operating systems?
8 A. I've told you there is no one whose
9 particular responsibility it is to track those
10 figures, so I'm not sure what documents you're
11 referring to.
12 Q. Correct me if I'm wrong, but I thought
13 you said you had seen documents that contained market
14 share information; is that right?
15 A. I've seen documents where people
16 attempt in some context to estimate various numbers.
17 Q. And what people are you referring to?
18 A. I'm just saying I've seen documents
19 like that. I'm not saying any particular --
20 Q. Do you know who authored those
21 documents?
22 A. No.
23 Q. Do you recall what unit of Microsoft
24 they came from?
25 A. They could have come from the product
35 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 groups or the sales and marketing groups.
2 Q. Do you have any understanding as to how
3 the folks who prepared those documents go about
4 tracking Microsoft's market share?
5 MR. HEINER: Objection. Misstates the
6 testimony.
7 THE WITNESS: Well, I think IDC and
8 Dataquest are examples of firms who are in the
9 business of trying to measure the size of various
10 product sales. And so sometimes we might look at
11 their numbers. I think the Microsoft library
12 subscribes to a number of services that are in the
13 business of trying to guess at numbers.
14 MR. HOUCK: I'd like to mark as
15 Exhibit 339 a memorandum or e-mail from Anthony Bay
16 to Ben Slivka dated October 25, 1994.
17 (The document referred to was marked
18 by the court reporter as Government Exhibit 339 for
19 identification and is attached hereto.)
20 Q. BY MR. HOUCK: Would you take a look at
21 Exhibit 339, Mr. Gates. Exhibit 339 contains a
22 number of e-mails, and I want to ask you a couple
23 questions about one on the first page from Russell
24 Siegelman to yourself and others re MCI as an access
25 provider dated October 13, 1994.
36 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Do you recall receiving this e-mail?
2 A. No.
3 Q. Do you have any reason to believe you
4 didn't get it?
5 A. No.
6 Q. What was Mr. Siegelman's position in
7 October of '94?
8 A. He was involved with looking at Marvel.
9 Q. And what was Marvel?
10 A. It was a code name for what we would do
11 in terms of Internet sites or online service
12 activity.
13 Q. Do you understand that in this e-mail
14 here Mr. Siegelman is opposing a proposal to give MCI
15 a position on the Windows 95 desktop as an Internet
16 service provider?
17 A. I don't remember anything about MCI.
18 This talks about how we'll have a Mosaic client in
19 Windows 95. I don't see anything in here about the
20 desktop.
21 Q. It references in this e-mail the
22 Windows box. What do you understand the Windows box
23 to mean?
24 A. Well, the Windows box is certainly not
25 the Windows desktop. The Windows box is a piece of
37 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 cardboard.
2 Q. Is it your understanding that when he
3 uses "Windows box" here, he means a piece of
4 cardboard?
5 A. Well, he is probably talking about the
6 stuff that's inside. He is saying access to the
7 Windows box. He is talking about the bits that are
8 on the --
9 Q. What do you understand to be the
10 subject of the memorandum here that he is addressing?
11 MR. HEINER: Mr. Houck, you're at risk
12 here of cutting off the witness.
13 MR. HOUCK: I'm sorry.
14 MR. HEINER: Or I should say you did
15 cut off the witness.
16 MR. HOUCK: I apologize if I did. I'm
17 just trying to move this along, but if I cut you off,
18 I apologize.
19 MR. HEINER: Can we have the last
20 question and answer read back.
21 (Record read.)
22 THE WITNESS: This is electronic mail
23 and Russ is suggesting that he disagrees with doing a
24 deal with MCI under these particular terms.
25 Q. BY MR. HOUCK: In the e-mail he refers
38 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 to Windows distribution as a unique and valuable
2 asset, more specifically as "our one unique and
3 valuable asset." Do you see that?
4 A. I see a sentence that has those words
5 in it.
6 Q. Do you have an understanding as to what
7 he meant?
8 A. Well, the Marvel people were having a
9 hard time coming up with a strategy, and in
10 retrospect we can look back and say they didn't come
11 up with a good strategy. And they were looking at,
12 you know, what could they do that would be attractive
13 to a lot of users. And sometimes their goals and the
14 goals of the Windows group were different. And in
15 retrospect it's clear they weren't able to attract a
16 lot of users.
17 Q. Mr. Gates, I indicated at the outset of
18 the deposition I do want to move through this
19 deposition as quickly as possible, but I must say I
20 think your answers are nonresponsive and rambling,
21 and if that continues to be the case, I'm just
22 letting you know this is going to take much longer
23 than I would have hoped. So I'll pose my question
24 again because I think your answer was nonresponsive.
25 Do you have any understanding as to
39 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 what Mr. Siegelman meant here by his reference to
2 Windows distribution being "our one unique and
3 valuable asset"?
4 A. Was that the question I was asked --
5 Q. Yes, sir.
6 A. Can you read me back the previous
7 question?
8 (The record was read as follows:
9 "Q. In the e-mail he refers to Windows
10 distribution as a unique and valuable asset,
11 more specifically as 'our one unique and
12 valuable asset.' Do you see that?
13 "A. I see a sentence that has those
14 words in it.
15 "Q. Do you have an understanding as to
16 what he meant?"
17 THE WITNESS: Well, maybe there is some
18 understanding -- you said do I understand what he
19 meant. I thought you were asking about his e-mail as
20 a whole.
21 Q. BY MR. HOUCK: Let me reask it for the
22 third time and see if I can get an answer.
23 Do you have any understanding what
24 Mr. Siegelman meant when he referred to Windows
25 distribution as our one unique and valuable asset?
40 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 MR. HEINER: This is a line of
2 questioning about the mail that Mr. Gates does not
3 recall reading; is that right?
4 MR. HOUCK: The question has been put.
5 THE WITNESS: I think the Marvel group
6 in their search for what they could do to get
7 millions of users at this particular point in time
8 was thinking about making it easy to sign up to the
9 Windows box being something that would be helpful to
10 them and therefore an asset for the Marvel group in
11 what they were doing.
12 Q. BY MR. HOUCK: Do you understand that
13 Mr. Siegelman in his reference had in mind the large
14 market share that Microsoft has with respect to
15 operating systems?
16 A. I don't see anything about that in
17 here.
18 Q. That's not your understanding?
19 A. Remember, Russ isn't involved with the
20 Windows business, he is involved with the Marvel
21 business.
22 Q. Do you consider Windows distribution a
23 unique asset of Microsoft?
24 A. I know that the inclusion of what
25 Marvel became didn't lead to its being popular.
41 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q. Again, let me ask the question,
2 Mr. Gates. I wasn't asking about Marvel. I was
3 asking about Windows distribution.
4 A. Well, Marvel was a thing that was put
5 into the Windows box and so, in fact, if the question
6 is is putting things in there, is that valuable in
7 the sense that it creates popularity for those
8 things, there are many good examples that we know
9 where it obviously does not create popularity. So in
10 terms of how much of a value that is, it's very
11 instructive to look at Marvel and what subsequently
12 happened to that because we did include it in the
13 Windows box as one of the things that the user had on
14 the desktop.
15 MR. HOUCK: Move to strike the answer
16 as nonresponsive.
17 MR. HEINER: Mr. Houck, I'm afraid that
18 if you ask a question with vague terms, you may get
19 answers that you don't like, but that was a very
20 responsive answer to the question.
21 Q. BY MR. HOUCK: Let me put the question
22 again without reference to this document. Mr. Gates,
23 do you believe that Windows distribution is a unique
24 asset that Microsoft has?
25 MR. HEINER: Objection. Form.
42 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Foundation. Defined terms.
2 THE WITNESS: What do you mean when you
3 say "Windows distribution" there?
4 Q. BY MR. HOUCK: Do you have an
5 understanding what Mr. Siegelman meant by the phrase
6 "Windows distribution" in his e-mail that he wrote to
7 you?
8 A. He means -- I think he means, I don't
9 know for sure, I think he means including an icon on
10 the desktop for access to Marvel.
11 Q. And by "the desktop," you mean the
12 Windows desktop?
13 A. In this case, yes.
14 Q. He goes on in the e-mail to say as
15 follows: "The only real advantage we have in this
16 game is Windows distribution. Why sell it so cheaply
17 when we think is will be a big market and can give us
18 leverage in so many ways in the Iway business."
19 Do you have any understanding what he
20 meant by the phrase "Iway business" here?
21 A. No. I've never -- I don't remember
22 ever seeing that term before.
23 Q. What distribution channels has
24 Microsoft employed to distribute Internet Explorer?
25 A. Well, the primary distribution channel
43 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 is the Internet where people very easily download
2 whatever version of Windows Internet technology
3 they're interested in.
4 We've also distributed it through
5 retailers, the Windows 95 update product and, you
6 know, wherever Windows goes out, which includes
7 retail, OEM. And then people who do Internet signups
8 have also done some distribution. There's a lot of
9 different marketing programs where we'll have like a
10 conference and we'll make available Internet Explorer
11 to people that attend the conferences.
12 I think we've also included it with
13 Microsoft Office in some cases.
14 Q. Has Microsoft done research to
15 determine which distribution channels are most
16 effective in delivering browsers that are actually
17 used by people?
18 A. I think somebody did a survey to ask
19 people where they get their browser at some point.
20 Q. Do you have any recollection who did
21 that survey?
22 A. No.
23 Q. Do you recall what the results were?
24 A. I know the Internet has always been the
25 primary distribution channel for browsers.
44 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q. You're talking about specifically
2 Internet Explorer?
3 A. No.
4 MR. HOUCK: I'd like to mark as
5 Exhibit 340 a memorandum -- or rather an e-mail --
6 from Kumar Mehta to Brad Chase and Yusuf Mehdi dated
7 March 27, 1997.
8 (The document referred to was marked
9 by the court reporter as Government Exhibit 340 for
10 identification and is attached hereto.)
11 Q. BY MR. HOUCK: Is this an example of
12 the type of memorandum you've seen in which Microsoft
13 has endeavored to determine which distribution
14 channels are most effective in distributing Web
15 browsers?
16 A. No.
17 Q. What position in the company did
18 Mr. Mehta have in March of 1997?
19 A. I don't know.
20 Q. Do you know if one of his
21 responsibilities was market research?
22 A. No. I mean I'm not copied on this. I
23 mean just looking at it -- and I certainly have no
24 recollection of seeing this. It also seems to
25 contradict some other things that I have seen.
45 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q. The e-mail reads as follows: "Bob
2 Foulon is gathering data for a John Roberts meeting
3 with Bill Gates tomorrow. Apparently they are going
4 to discuss whether IE and Memphis should be bundled
5 together."
6 Do you recall such a meeting with
7 Mr. Foulon and Mr. Roberts?
8 A. No.
9 Q. Do you recall Mr. Foulon or Mr. Roberts
10 sharing with you market research data with respect to
11 how people get their browsers?
12 A. I don't know Bob F-o-u.
13 Q. Do you understand that is a reference
14 to Bob Foulon?
15 A. I don't know Bob Foulon. I don't know
16 anyone whose name is Bob F-o-u anything.
17 Q. Do you know John Roberts?
18 A. Yes.
19 Q. What position does he have with
20 Microsoft?
21 A. He at this time -- is that what you're
22 interested in?
23 Q. Yes.
24 A. At this time I think he works for Brad
25 Chase.
46 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q. Did you have a meeting that you recall
2 with Mr. Roberts and/or Mr. Chase in or about March
3 of 1997 where you talked about the results of market
4 research to determine how people obtained Internet
5 Explorer?
6 A. I don't remember.
7 Q. The e-mail I quoted attaches another
8 e-mail dated March 27, 1997, which says in the first
9 two paragraphs, which I'll read, "Bob, here is some
10 information on how people get and use IE that might
11 help you guys. My feeling, based on all the IE
12 research we have done, is that it is a mistake to
13 release Memphis without bundling IE with it. IE
14 users are more likely than other browser users to get
15 it with their computers. Overall, 20% of people who
16 use IE at home obtained it with their computer; and
17 24% of those using IE at work got it with their
18 computer. Effectively we would be taking away the
19 distribution channel of almost a quarter of all IE
20 users."
21 Do you have any understanding as to the
22 accuracy of the numbers he cites here with respect to
23 the number of people using IE who obtained it with
24 their computer?
25 A. I have no idea what we're talking about
47 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 in terms of what kinds of users he surveyed or looked
2 at. So no, I have no opinion on it whatsoever. I
3 mean who knows.
4 Q. Do you have any reason to believe the
5 information he reports here is inaccurate?
6 A. I don't have enough of a context to
7 even state an opinion. It doesn't even say what kind
8 of users or anything.
9 Q. Do you have any understanding
10 whatsoever as to approximately what percentage of IE
11 users have obtained IE through the OEM channel?
12 A. The only data point I know along these
13 lines is I'm pretty sure I've seen that about 60 to
14 70 percent of people, the browser they're using they
15 got through the Internet, that's the way they got the
16 browser they're working with.
17 MR. HOUCK: Move to strike the answer
18 as nonresponsive.
19 Can we have the question back, please.
20 MR. HEINER: It's just a way to cut
21 through the line of questioning, which is not really
22 going anyplace and he is telling you about the only
23 data point he has in this general subject area, so
24 it's just a question of efficiency.
25 (The record was read as follows:
48 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 "Q. Do you have any understanding
2 whatsoever as to approximately what percentage
3 of IE users have obtained IE through the OEM
4 channel?"
5 THE WITNESS: Well, I guess I need to
6 explain then how it works. If you take 100 percent
7 and you take the one number that I say I know, which
8 is 60 to 70 percent get it through the Internet, it
9 at least places an upper bound on the number you
10 asked for. And that's all I would know about that
11 statistic.
12 MR. HOUCK: Move to strike that answer
13 as well.
14 Q. What information -- strike that.
15 Can you identify any specific documents
16 you've seen that indicate how IE users obtained IE?
17 A. No.
18 Q. Have you seen any documents like that
19 at Microsoft prepared by Microsoft employees?
20 A. I believe I have, yes.
21 Q. Do you know who prepared them?
22 A. No.
23 MR. HOUCK: Do you want to take a break
24 here?
25 MR. HEINER: Sure.
49 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 VIDEOTAPE OPERATOR: The time is 10:16.
2 We're going off the record.
3 (Recess.)
4 VIDEOTAPE OPERATOR: The time is 10:31.
5 We're going back on the record.
6 Q. BY MR. HOUCK: Was Netscape the first
7 company to market a Web browser that gained
8 widespread consumer usage?
9 A. I think Mosaic was the first browser.
10 I don't know what your criteria -- what you're
11 implying in terms of widespread. Mosaic was the
12 first popular browser and that predates the existence
13 of Netscape for their browser.
14 Q. Did Netscape's browser supplant the
15 Mosaic browser as the most popular one?
16 A. There's a point in time where
17 Netscape's browser became more popular in terms of
18 usage share than Mosaic.
19 Q. Do you recall when that was?
20 A. I'm sorry?
21 Q. Do you recall when that was?
22 A. No. I don't think anybody knows
23 exactly when that was.
24 MR. HOUCK: I'd like to mark as
25 Exhibit 340 -- excuse me. I'd like to mark as
50 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Exhibit 341 a series of e-mails, the first one being
2 from Pat Ferrel, F-e-r-r-e-l, to Bill Gates and
3 others dated April 6, 1995.
4 (The document referred to was marked
5 by the court reporter as Government Exhibit 341 for
6 identification and is attached hereto.)
7 Q. BY MR. HOUCK: I hand you Exhibit 341,
8 Mr. Gates, and this is a series of e-mails and the
9 one I want to ask you about is the one on the second
10 page from Mr. Siegelman to yourself and others dated
11 April 6, 1995. Take a minute to take a look at it.
12 Have you finished reviewing the e-mail?
13 A. I looked at it.
14 Q. The e-mail starts off as follows: "Pat
15 Ferrel and I have been thinking about this problem a
16 lot and watching Netscape very closely. I too am
17 very worried."
18 What position did Mr. Ferrel hold at
19 Microsoft in or about April of 1995?
20 A. He wasn't involved with Windows. He
21 was involved with Marvel.
22 Q. Is he still a Microsoft employee?
23 A. I don't think so. I'm not sure.
24 Q. Do you recall personally being worried
25 about Netscape in or about April of 1995?
51 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A. No.
2 Q. Do you recall discussing Netscape with
3 Mr. Siegelman in this time period?
4 A. I'm sure Russ and I discussed the
5 effect of the Internet in general on online service
6 strategies like the work he was doing that became
7 MSN, but not Netscape in particular, no.
8 Q. The next sentence of the e-mail says,
9 "I agree with most of your problem statement, but I
10 think you underestimate the publisher/ISV threat.
11 Netscape is already opening up API hooks in their
12 viewer and many ISVs are hopping aboard."
13 Do you know what his reference is to
14 your "problem statement"?
15 A. No.
16 Q. Do you understand what he means here
17 when he talks about opening up API hooks and many
18 ISVs hopping aboard?
19 A. I don't know what he meant. I can
20 guess if you want.
21 Q. Do you have any understanding as you
22 sit here what he meant by the language used in this
23 e-mail?
24 A. I don't know what he meant. I'd have
25 to ask him what he meant.
52 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q. I'm asking for your understanding. Do
2 you have one or not?
3 A. Understanding of what? Of what he
4 meant?
5 Q. Yes.
6 A. No. Of what those words might mean, I
7 can guess.
8 Q. I don't want you to guess. I'm asking
9 if you have any present understanding of what these
10 words mean.
11 A. I've told you I don't know who he means
12 by "you." I don't know what he means by "problem
13 statement." So I'm a little unclear about what he
14 means in this paragraph.
15 Q. Do you have any understanding -- strike
16 that.
17 By ISV do you understand him to be
18 referring to independent software vendors?
19 A. That acronym refers to independent
20 software vendor.
21 Q. And what does the acronym API refer to?
22 A. Application programming interface.
23 Q. Do you recall yourself having a concern
24 in or about April, 1995 about the possibility that
25 Netscape was going to open up API hooks in the
53 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Netscape Web browser?
2 A. I can't pin any recollection to that
3 particular time period, no.
4 Q. Did you at some point come to the
5 conclusion that the prospect that Netscape might open
6 up API hooks in their browser was a threat to
7 Microsoft?
8 A. I think in late '95 Andreeson was
9 talking about how he was going to put us out of
10 business, suggesting that their browser was a
11 platform. And, in fact, they did have APIs in their
12 browser.
13 Q. Do you recall having any concern
14 yourself before late 1995 with respect to the threat
15 posed by Netscape opening up API hooks in their
16 browser?
17 A. No.
18 Q. Do you recall that other folks at
19 Microsoft had such concerns before late 1995?
20 A. It's hard to recall other people's
21 concerns. No, I don't recall other people's
22 concerns.
23 Q. In the last paragraph of the e-mail
24 Mr. Siegelman refers to the "danger of letting
25 Netscape create a new platform and get
54 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 ISV/merchant/content provider support."
2 Do you have any understanding what he
3 meant by that language?
4 A. Well, he was in charge of our online
5 service strategy and so he thought of the various
6 things going on in the Internet as affecting what he
7 was going to do. In particular, online services, up
8 until the Internet really exploded in popularity,
9 they'd had content that was unique to their online
10 service. And the whole Internet phenomenon was
11 changing that. And so for Marvel that was a
12 challenge to the business strategy they'd gone down,
13 so I'm sure he is referring to that general issue.
14 Q. Did you understand Mr. Siegelman had a
15 concern in or about April, 1995 that the opening up
16 of API hooks in Netscape's browser constituted a
17 threat to the Windows operating system?
18 A. Well, certainly he wasn't involved in
19 the Windows operating system and none of this is
20 about the Windows operating system, so to try to read
21 that into here is certainly incorrect.
22 MR. HOUCK: Move to strike as
23 nonresponsive.
24 Repeat the question, please.
25 (Record read.)
55 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 THE WITNESS: I'll give the same
2 answer.
3 Q. BY MR. HOUCK: In the next sentence
4 Mr. Siegelman says, "I don't think that the way to
5 fight back is simply with a better Web browser
6 either."
7 Do you recall having any discussion
8 with Mr. Siegelman on what the best way to fight back
9 was?
10 A. I certainly had discussions with him
11 about our online strategies, which subsequently were
12 not successful, and certainly it's clear that for the
13 online strategy, he needed to do quite a bit,
14 including content relationships, not just browsing
15 functionality.
16 Q. Did you have any discussion with
17 Mr. Siegelman as to what the best way was for
18 Microsoft to fight back with respect to any threat
19 posed by Netscape to Windows as a platform?
20 A. Mr. Siegelman wasn't involved with
21 Windows, so I don't understand why you keep asking me
22 about --
23 Q. Well, you can say yes or no, sir. I
24 don't mean to interrupt, but --
25 A. No. My discussions with Russ were
56 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 about his responsibilities, which were online service
2 activities.
3 MR. HOUCK: I'd like to mark as
4 Exhibit 342 a series of e-mails, first one being from
5 Nathan Myhrvold to Mr. Gates dated April 24, 1995.
6 (The document referred to was marked
7 by the court reporter as Government Exhibit 342 for
8 identification and is attached hereto.)
9 Q. BY MR. HOUCK: Before you take a look
10 at that document, do you recall that there was a
11 general discussion at Microsoft at the top executive
12 level in or about April, 1995, with respect to the
13 threat to Microsoft posed by Netscape?
14 A. No.
15 Q. What position did Mr. Myhrvold hold
16 with Microsoft in April of 1995?
17 A. He was Russ Siegelman's boss, so he
18 wasn't involved in the Windows business. He was
19 involved in our online service activities.
20 Q. Was he one of your top executives?
21 A. He was an executive. I'm not sure what
22 you mean by top executive. He didn't manage any of
23 the large products that we offer.
24 Q. Was he sort of Microsoft's resident
25 strategic thinker?
57 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A. No.
2 Q. Did you value his advice?
3 A. Not over the advice of people who are
4 more directly involved in their businesses.
5 Q. Do you recall consulting Mr. Myhrvold's
6 advice in or about April, 1995 as to how Microsoft
7 should respond to Netscape?
8 A. I'm sure since Nathan was in charge of
9 online services at that time there was some
10 discussion or e-mail about the effect of the Internet
11 growth on the Marvel and Blackbird strategies, but
12 not in a general sense.
13 Q. If you would, would you take a look at
14 Exhibit 342, and in particular the e-mail on the
15 second page, which is from Mr. Myhrvold to yourself
16 and others regarding Internet strategy dated
17 April 18, 1995.
18 A. There's a lot of different e-mails
19 here.
20 Q. The one I referred you to is the one on
21 the second page, sir, the one at the bottom of that
22 page, and it's from Mr. Myhrvold to yourself and
23 others dated April 18, 1995.
24 A. Doesn't the same e-mail extend for
25 about nine pages or ten pages? Isn't that all one
58 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 e-mail?
2 Q. That's the one I want to ask you about.
3 A. So it's on all those pages; right?
4 Q. Right. And the questions I have, to
5 help you focus, are going to be with respect to the
6 first couple pages of the e-mail.
7 A. Okay.
8 Q. The first paragraph reads, "There has
9 been a flurry of e-mail about Netscape and our
10 general Internet development strategy. This e-mail
11 is my contribution to this topic."
12 Does this refresh your recollection
13 there was a general discussion at the upper levels of
14 Microsoft in or about April, 1995 with respect to
15 Netscape and how to respond competitively to
16 Netscape?
17 A. Well, I think that's a
18 mischaracterization. It appears there was some mail
19 about the effect of Netscape and their activities on
20 our online service strategy.
21 Q. What do you understand about
22 Mr. Myhrvold's reference here to general Internet
23 development strategy?
24 A. This memo is about our strategy with
25 the Blackbird front end and how it should relate to
59 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Internet protocols. And it's a very long, nine-page
2 thing about Blackbird and his various opinions about
3 Blackbird. The interesting thing is Blackbird
4 basically was canceled.
5 Q. Is it your testimony and your
6 understanding that this memorandum is limited to a
7 discussion about Blackbird?
8 MR. HEINER: Object to the question
9 because you know the witness hasn't read it.
10 MR. HOUCK: He has read it. He took
11 time to read it.
12 MR. HEINER: You said you would direct
13 him to two pages and he read two pages. He can read
14 nine pages and tell you what the nine pages are
15 about, if you'd like.
16 Q. BY MR. HOUCK: Take as much time as you
17 need to review the memorandum and answer my question.
18 MR. HEINER: Could I have the question
19 read back.
20 (The record was read as follows:
21 "Q. Is it your testimony and your
22 understanding that this memorandum is limited
23 to a discussion about Blackbird?")
24 THE WITNESS: You keep using the word
25 memorandum to refer to electronic mail. I don't
60 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 think of electronic mail as a memorandum. So this
2 e-mail, which I haven't read, the part I've glanced
3 at, all the action items, all the things he is saying
4 we should do all relate strictly to Blackbird and the
5 online services activities.
6 Q. BY MR. HOUCK: Did any of the
7 recipients of this e-mail have responsibilities for
8 Windows?
9 A. Well, let's see. He copies Russ, who
10 works for him in online services. He copies Craig,
11 who works on interactive TV, not Windows. He copies
12 Dan Rosen, who works on online service. Pat Ferrel,
13 who works on online service. Peter Neupert, who
14 works on online service. And then he copies Paul,
15 who has another part of the business that includes
16 Windows, and he copies me. So Paul and myself have
17 broad responsibilities, but otherwise all the other
18 people are online service people.
19 Q. Were you and Paul Maritz two senior
20 executives with responsibilities for Windows in
21 April, '95?
22 A. I'm not sure how you'd characterize my
23 role. I'm the CEO of the company, so all the
24 products of the company -- I'm not sure you'd say --
25 you'd use the description you used.
61 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q. Windows is a very important product to
2 Microsoft, is it not?
3 A. That's right.
4 Q. Is it fair to say you devote a fair
5 amount of your time to Windows and strategies for
6 marketing Windows and making sure it's a successful
7 product?
8 A. I spend some of my time on that.
9 Q. Was that one of Mr. Maritz's principal
10 responsibilities in April of 1995?
11 A. It was one of his, yes.
12 Q. In the third paragraph of this e-mail
13 Mr. Myhrvold states, "The big issue to be concerned
14 about is the same issue that we have faced in the
15 past - proprietary standards coming from competing
16 software companies. Netscape is certainly one of the
17 many companies who will try to promote their
18 proprietary extensions (and entirely new protocols)
19 on the world."
20 Do you have any understanding as to
21 what he was referring to by his reference to issues
22 that Microsoft had faced in the past?
23 A. No.
24 Q. Do you know if he is referring to Lotus
25 Notes there?
62 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A. I'm quite certain that's not what he
2 was referring to.
3 Q. Do you have any present understanding
4 as to what he meant?
5 A. I'm not sure.
6 Q. On the next page, first full paragraph,
7 Mr. Myhrvold states, "The world of the Internet is
8 rapidly becoming Windows centric because Windows will
9 be the most popular client operating system by a wide
10 margin."
11 Did you understand he was referring
12 here to market share enjoyed by Windows?
13 A. I've said I don't remember the memo
14 specifically, so it's hard for me to say I remember
15 something he was referring to.
16 Q. You have no present understanding of
17 what he meant by this language; is that correct?
18 MR. HEINER: That's a different
19 question.
20 THE WITNESS: It's a different -- which
21 question should I answer?
22 Q. BY MR. HOUCK: Do you have any present
23 understanding of what -- strike that question.
24 Is it your present understanding that
25 by the reference here to Windows being the most
63 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 popular client operating system by a wide margin,
2 Mr. Myhrvold was referring to the market share
3 enjoyed by Windows in or about April, 1995?
4 A. He may have been.
5 Q. Several paragraphs further on in this
6 e-mail Mr. Myhrvold states, "As platform specific
7 work is done on the Internet, we want it to be done
8 on our platform. As proprietary technology and
9 protocols are used, we want them to be ours - in as
10 many broad mainstream areas as is reasonably
11 possible."
12 Is it your understanding that his use
13 of the word "platform" here is a reference to
14 Windows?
15 A. No.
16 Q. What is your understanding?
17 A. He is talking about all our platform
18 activities.
19 Q. Which would be what?
20 A. That include Blackbird. That's the
21 primary subject of the memo, as we discussed.
22 Q. Did you consider Blackbird a platform
23 at this point in time?
24 A. Yes. What else is it?
25 Q. Did you have a concern in April of 1995
64 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 that Netscape was somehow threatening Blackbird,
2 Microsoft's product?
3 A. There was a concern that our whole
4 online service strategy, including the Blackbird part
5 of it, may have been something we should change
6 because of all the activity on the Internet in
7 general, including the things Netscape was doing.
8 Q. Did you have a concern that what
9 Netscape was doing was threatening Blackbird as a
10 platform?
11 A. The whole phenomenon of people doing
12 Websites using HTML was changing the framework that
13 had existed for online service people, and so the
14 Marvel and Blackbird strategy, you really had to call
15 into question whether changes should be made. And so
16 Netscape was part of a phenomenon that was making us
17 rethink did Blackbird make sense. And eventually,
18 due to size and speed and delays and various changes
19 in the market, we actually canceled Blackbird.
20 MR. HOUCK: Move to strike the answer
21 as nonresponsive.
22 Can you read the question back, please.
23 (Record read.)
24 MR. HEINER: The answer was directly
25 responsive to the question. You can move to strike
65 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 all the answers and we'll have a short transcript.
2 THE WITNESS: If there is some part of
3 my answer you don't understand, I'll be glad to
4 elucidate, but it's one hundred percent responsive to
5 the question.
6 Q. BY MR. HOUCK: Isn't it a fact,
7 Mr. Gates, that Blackbird never did become a platform
8 at all?
9 A. I told you we canceled Blackbird, but
10 Blackbird -- the whole idea of Blackbird is to be a
11 platform for people to write enhanced content on.
12 That's the reason we invested so much money in
13 building Blackbird. As it says in this memo, there
14 were people who were enthusiastic about what we've
15 done in Blackbird, including Nathan.
16 Q. Isn't it a fact that you executives at
17 Microsoft back in April of '95 were concerned that
18 Netscape's Web browser posed a threat to Microsoft's
19 Windows platform?
20 A. Well --
21 Q. You can answer it yes or no, sir.
22 A. I don't know when people began to think
23 of Netscape as a competitor to Windows. I don't
24 think it was that early, but it might have been. I
25 know that by late '95 when people thought about the
66 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 various competitors to Windows, they did think of
2 Netscape.
3 Q. What's the earliest date you could put
4 on the concern expressed to you by Microsoft
5 executives that Netscape posed a threat to the
6 Windows platform?
7 MR. HEINER: Asked and answered.
8 THE WITNESS: I said that in late '95
9 I'm pretty sure people thought of them as a
10 competitor. I couldn't name a date earlier than
11 that.
12 I know that online service people were
13 thinking about Netscape and the Internet at earlier
14 dates.
15 Q. BY MR. HOUCK: Let me ask you a few
16 questions about page 898 of this document, several
17 pages later on. I'll read you the portion of it I
18 want to ask you some questions about so you have that
19 in mind.
20 "The front end which supports these
21 services is basically the union of the MSN front end
22 with Blackbird and O'Hare. At some point this is
23 very smoothly integrated, but at first they are
24 separate pieces of code stuck together at the end
25 user level.
67 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 "The front end should be given away as
2 widely as possible, including:
3 "Put into Windows. I agree with Paul
4 Maritz's comment that we should distribute the front
5 end very broadly by having it Windows, at least at
6 some point down the line.
7 "Distributed free on the Internet.
8 "Distributed free with MSN."
9 Do you recall any general discussion of
10 this subject with Mr. Myhrvold or Mr. Maritz back in
11 April of '95?
12 A. I know there was a plan to have
13 Blackbird include all the HTML support and so it
14 would be a superset in that sense.
15 Q. Is the reference to O'Hare a reference
16 to Internet Explorer?
17 A. Probably.
18 He says -- in the memo earlier he says,
19 "I've had people tell me that the O'Hare people
20 either are (or should be) working on their own plan
21 to superset Internet protocols." So it appears that
22 the author of this memo is pretty confused about what
23 the O'Hare people are doing and therefore what O'Hare
24 is.
25 MR. HOUCK: Move to strike the last
68 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 remark, which was not responsive to any question on
2 the table.
3 THE WITNESS: I was answering about
4 what the author of this memo meant by the word
5 "O'Hare". And believe me, that sentence that I read
6 to you is very informative on that point.
7 Q. BY MR. HOUCK: Isn't it a fact that
8 O'Hare is a code name used at Microsoft for Internet
9 Explorer?
10 A. There was a group of people who were
11 looking at doing the Explorer. Nathan says he
12 doesn't know what those people were doing, what their
13 strategy was at this time he wrote the memo.
14 MR. HOUCK: Move to strike again the
15 last portion of his answer.
16 Q. Do you know a gentleman by the name of
17 Ben Slivka?
18 A. Yes.
19 Q. What were his responsibilities, if any,
20 at Microsoft back in early 1995?
21 A. I'm not sure.
22 MR. HOUCK: I'd like to mark as
23 Government Exhibit 343 a series of e-mails, the first
24 one being from Alec Saunders to various people at
25 Microsoft dated January 31, 1995, the subject being
69 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Frosting and O'Hare.
2 (The document referred to was marked
3 by the court reporter as Government Exhibit 343 for
4 identification and is attached hereto.)
5 Q. BY MR. HOUCK: To expedite your review
6 of this document, Mr. Gates, I'll tell you my
7 questions are going to be limited to the e-mail on
8 the last page of the document. This is an e-mail
9 from Ben Slivka to Tim Harris and others at Microsoft
10 dated February 13, 1995 and does not show you as a
11 recipient.
12 A. Which one?
13 Q. The top one.
14 The first sentence of the e-mail from
15 Mr. Slivka states, "O'Hare is the code name for our
16 Internet Client, and we plan to ship it in the Win95
17 'frosting' package, which sim-ships with Win95."
18 Do you understand his reference here to
19 O'Hare and the Internet Client to be a reference to
20 what became known as Internet Explorer?
21 A. I think Internet Explorer 1.0 that was
22 in part of the Windows 95.
23 Q. Do you recall a plan back in early 1995
24 to ship a product known as Frosting?
25 A. I don't recall the plan. I know we
70 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 worked on what we called Frosting.
2 Q. What is your understanding of what
3 Frosting was?
4 A. It became the Windows Plus Pack. It
5 didn't sim-ship I don't think.
6 Q. Was it your understanding that at some
7 point in time it was Microsoft's intention to include
8 Internet Explorer in the Frosting package as opposed
9 to Windows 95?
10 A. Well, for the primary Windows 95
11 distribution channel, we included Internet Explorer
12 1.0 with Windows, so when you say Windows 95, it was
13 part of Windows 95. Then there is the Windows 95
14 Upgrade that was sold at retail, which that had a box
15 labeled "Windows 95 Upgrade" and a box labeled
16 "Windows 95 Plus Pack."
17 Q. Do you recall that in or about
18 February, 1995, it was Microsoft's intention to
19 include Internet Explorer in the Frosting package and
20 not in Windows 95?
21 MR. HEINER: Objection.
22 THE WITNESS: No. I think you
23 misunderstood what I said. Windows 95, the full
24 product, included IE. Windows 95, the upgrade
25 product, did not. But Windows 95, the full product,
71 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 whether sold through the OEM or whatever, that
2 included the capabilities. It was just the upgrade
3 that did not.
4 Q. BY MR. HOUCK: I understood your
5 answer. Let me ask the question again because I
6 don't think you understood the question.
7 The question was, is it your
8 understanding that as of February, 1995, it was not
9 Microsoft's intention to include Internet Explorer in
10 the full product known as Windows 95?
11 A. The product that didn't include
12 Internet Explorer is called the Windows 95 Upgrade.
13 Windows 95, the full product, did include Internet
14 Explorer.
15 Q. I understood -- strike that.
16 I understand that when it was marketed,
17 it included Internet Explorer. The question is, is
18 it your recollection that back in February of 1995,
19 it was Microsoft's intention not to include Internet
20 Explorer in Windows 95 but to market it instead as
21 part of the package known as Frosting?
22 MR. HEINER: You're talking about the
23 OEM channels in that question? I'm wondering, for
24 the record.
25 MR. HOUCK: The question is complete as
72 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 it stands.
2 Q. Can you answer the question, sir?
3 A. I'm confused about what you're asking
4 me because you have to differentiate the retail
5 channel, which is the Windows 95 Upgrade and the Plus
6 Pack from Windows 95, the whole product. Windows 95,
7 the whole product, we wanted to include a lot of
8 features. We don't know for sure which features are
9 going to get done in time until really the product is
10 done. So certainly our intention to do it and
11 working hard on doing it, that plan had existed for a
12 long time. We weren't certain for any future on
13 Windows 95 exactly what we would decide to get in or
14 not get in. We did, in fact, get the Internet
15 Explorer 1.0 into the Windows 95 full product.
16 Q. Do you recall that in or about
17 February, 1995, it was Microsoft's intention to ship
18 O'Hare as part of Frosting?
19 A. The thing that was code named O'Hare
20 ended up in the Windows 95 full product as one place
21 it came. And another place was in the Plus Pack.
22 Q. Let me ask it one more time.
23 Was it Microsoft's plan as of February,
24 1995, to ship Internet Explorer solely in the
25 Frosting package and not in the initial full
73 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Windows 95 package that was to be marketed?
2 A. No. Our plan was to get it into the
3 Windows 95 full package if possible.
4 Q. Do you recall that in or about
5 February, 1995, it was felt at Microsoft that it was
6 not possible to include O'Hare in the Windows 95
7 package?
8 A. We had a plan to include it if at all
9 possible. In the world of software development
10 there's always skeptics, so you can name any feature
11 of Windows 95 and you can find somebody who would
12 have been skeptical about whether it would get done
13 or not in time for the shipment of the product.
14 Certainly the people involved in doing the
15 development were working hard and, in fact, they
16 succeeded in achieving our plan, which was as best we
17 could to include it in the product. And we did.
18 Q. Do you recall what the -- strike that.
19 Do you recall when Microsoft first
20 determined that it would be possible to include IE in
21 Windows 95 that shipped in 1995?
22 A. Well, as I've said, until the minute
23 you actually ship a product, you can always change
24 your mind about what's going to be in it and what's
25 not going to be in it. And so there wasn't absolute
74 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 certainty for the different features until we
2 actually froze the bits.
3 Q. Who was responsible back in 1995 for
4 determining what went into Windows and what didn't?
5 A. That's a decision that I would have the
6 final say on.
7 Q. Who were your senior executives
8 responsible for assisting in that decision?
9 A. Maritz.
10 MR. HOUCK: I think our videotape
11 operator wants to change the videotape, so why don't
12 we take a short break.
13 VIDEOTAPE OPERATOR: The time is 11:15.
14 We're going off the record.
15 (Recess.)
16 VIDEOTAPE OPERATOR: The time is 11:24.
17 We're going back on the record.
18 MR. HOUCK: I'd like to mark as
19 Government Exhibit 344 a series of e-mails, first one
20 being from Paul Maritz dated April 12, 1995.
21 (The document referred to was marked
22 by the court reporter as Government Exhibit 344 for
23 identification and is attached hereto.)
24 Q. BY MR. HOUCK: Exhibit 344, Mr. Gates,
25 is a series of e-mails and the initial questions will
75 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 be about the very last one, which is an e-mail from
2 you to Craig Mundie dated April 10, 1995.
3 What were Mr. Mundie's responsibilities
4 back in April of 1995?
5 A. He was doing the broadband online
6 service work, which was sometimes referred to as
7 Interactive TV.
8 Q. In the first paragraph you say, "Given
9 that we are looking at the Internet destroying our
10 position as a setter of standards in APIs, do you see
11 things we should be doing to use ACT assets to avoid
12 this?"
13 What was your reference to ACT assets?
14 A. ACT, A-C-T. That's Craig Mundie's
15 group.
16 Q. Your e-mail goes on to state, "I admit
17 I find it hard to focus lots of resources on trials
18 and things when the Internet is taking away our power
19 every day."
20 In what sense did you mean the Internet
21 was taking away Microsoft's power every day?
22 A. I meant that -- this is copied to
23 people involved in the online service activity,
24 Nathan, Rick and Russ, and not to the Windows people
25 at all. It looks like at 3:00 a.m. that morning I
76 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 was thinking about the fact that our ambitions for
2 online service in the narrow band field, we needed to
3 think of some of the broadband work that Craig was
4 doing to come in and be helpful to that, particularly
5 given that the Internet was changing the framework.
6 Q. What was Mr. Rick Rashid's position in
7 Microsoft back in April of '95?
8 A. He was -- he had actually two jobs at
9 the time. He was involved in research, but mostly he
10 had moved over to help out with the ACT work, which
11 is the Interactive TV activities.
12 MR. HOUCK: I'd like to mark as
13 Exhibit 345 a memorandum from Mr. Gates to his
14 executive staff and direct reports entitled
15 "The Internet Tidal Wave."
16 (The document referred to was marked
17 by the court reporter as Government Exhibit 345 for
18 identification and is attached hereto.)
19 Q. BY MR. HOUCK: Do you recall authoring
20 this memorandum, Mr. Gates?
21 A. Yes.
22 Q. To whom did you send it?
23 A. It appears it was sent to executive
24 staff and direct reports.
25 Q. What does executive staff refer to?
77 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A. It's an electronic mail alias for a
2 group of people.
3 Q. And who did that constitute as of
4 May of 1995?
5 A. I'm not sure, but it would have
6 included most of the officers.
7 Q. On the second page of the memorandum,
8 second paragraph you say, "Most important is that the
9 Internet has bootstrapped itself as a place to
10 publish content. It has enough users that it is
11 benefiting from the positive feedback loop of the
12 more users it gets, the more content it gets, and the
13 more content it gets, the more users it gets."
14 Can you explain what your reference was
15 to a positive feedback loop?
16 A. Well, it's explained right there. It
17 says "the more users it gets, the more content it
18 gets, and the more content it gets, the more users it
19 gets." I mean I don't expect that people know what
20 the term means, so I explain it right in that
21 sentence.
22 Q. Is the positive feedback loop something
23 that, in your estimation, would result in ever
24 increasing popularity of the Internet?
25 A. No.
78 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q. Did you anticipate in May of 1995 that
2 the Internet would become increasing popular?
3 A. It had become more popular, yes.
4 Q. Was one of the reasons you thought it
5 would be more on popular was that more content would
6 be written for the Internet?
7 A. Created to Internet standards, yes.
8 Q. And was it your understanding or
9 expectation that the more content that was written,
10 the more users there would be?
11 A. Yes.
12 Q. In the fourth page of your memorandum
13 in the second paragraph above the heading "Next
14 Steps," you state, "A new competitor 'born' on the
15 Internet is Netscape. Their browser is dominant,
16 with 70% usage share, allowing them to determine
17 which network extensions will catch on."
18 Do you recall how you determined that
19 Netscape's usage share was 70 percent at this time?
20 A. No.
21 Q. Is your reference to "network
22 extensions" a reference to APIs?
23 A. No.
24 Q. What is it a reference to?
25 A. To network extensions.
79 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q. And how do you define that?
2 A. Things that let you do richer things
3 across the network.
4 Q. Can you give some examples?
5 A. Advanced HTML. HTML tables. HTML file
6 tags.
7 Q. Did you undertake a reorganization of
8 Microsoft back at this time in order to position the
9 company to respond better to the Internet?
10 A. Not at the time I wrote this memo.
11 Q. Under the heading "Next Steps" you say
12 "The challenge/opportunity of the Internet is a key
13 reason behind the recent organization."
14 What were you referring to?
15 A. I'm not sure.
16 Q. What did you perceive the challenge/
17 opportunity of the Internet to be at this point in
18 time?
19 A. That users were interested in using the
20 Internet and so we needed to make sure that our
21 software was doing a good job of that and that that
22 was a challenge in the sense that other people could
23 do it and that was competition and an opportunity in
24 the sense that it would grow the importance of our
25 strong software work.
80 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q. On the next page you talk about various
2 critical steps. Were these steps to respond to the
3 challenge/opportunity of the Internet you described
4 in the earlier part of your memorandum?
5 A. I'm not sure what you mean by that.
6 Q. You outline several critical steps.
7 Can you explain why you felt they were critical?
8 A. For all the reasons I cite in the
9 entire memo. I mean the whole memo -- there's part
10 of the memo that precedes these steps. I could read
11 the memo up to the point of the critical steps to you
12 if you want.
13 Q. What was your purpose in sending this
14 memorandum to your key executives?
15 A. To talk about my view of the Internet
16 tidal wave.
17 Q. Did you also outline your views as to
18 what steps Microsoft needed to take to respond to the
19 Internet tidal wave?
20 A. There's a part of the memo that talks
21 about steps.
22 Q. And in that part of the memorandum, are
23 you outlining the steps that needed to be taken in
24 your view to respond to the Internet tidal wave?
25 A. I'm suggesting some steps I think we
81 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 should take. I wouldn't say they are all related to
2 one particular thing, but I make some recommendations
3 here.
4 Q. The second step here relates to
5 something called the "Client." Is that a reference
6 to Internet Explorer?
7 A. No.
8 Q. What is it a reference to?
9 A. Client here means Windows.
10 Q. You say, "First we need to offer a
11 decent client (O'Hare) that exploits Windows 95
12 shortcuts."
13 Is not O'Hare a reference to client
14 here?
15 A. Client means client operating system.
16 Q. Why did you put "O'Hare" in parentheses
17 after the word "client"?
18 A. Probably because that's the part of
19 Windows that exploits Windows 95 shortcuts.
20 Q. What Windows 95 shortcuts did you have
21 in mind?
22 A. Windows 95 shortcuts is a technical
23 term. And the O'Hare part of Windows exploits this
24 feature known as Windows shortcuts. It doesn't mean
25 shortcut as in the common sense use of the term
82 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 shortcut. It means the technical feature Windows 95
2 shortcuts.
3 Q. When you use the term "O'Hare" in the
4 e-mails that you write, what do you mean?
5 A. Well, this -- in this case I meant the
6 group that was working on that part of Windows 95.
7 Q. And what part is that?
8 A. The part that supported HTML.
9 Q. Is that the part that became known as
10 Internet Explorer?
11 A. Yes. Most of the work in Internet
12 Explorer came out of that group.
13 Q. Further down in this paragraph you
14 refer to Plus pack. Is that again a reference to
15 something also referred to at Microsoft as Frosting?
16 A. Yes, Frosting was a name we used for
17 what later became known as Plus pack.
18 Q. Do you recall it was in or about that
19 time frame that Microsoft was doing everything it
20 possibly could to include the O'Hare client in the
21 Windows 95 package?
22 A. And by that you mean the Windows 95
23 full product? Yes.
24 Q. Who was responsible at Microsoft for
25 accomplishing that?
83 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A. I'm not sure you could point to one
2 individual.
3 Q. Was there one individual that had
4 primary responsibility?
5 A. Brad Silverberg managed the group that
6 was doing a lot of that work.
7 Q. Did you periodically have something you
8 called Think Week?
9 A. Yes.
10 Q. What is Think Week?
11 A. It's setting aside a week of time where
12 I have no meetings or phone calls and I get a chance
13 to use products and learn about new research work
14 that we're doing and other people are doing.
15 Q. Do you recall one of the subjects you
16 devoted time to in your 1995 Think Week was the
17 Internet?
18 A. I'm sure I did.
19 Q. Do you recall receiving information
20 from your subordinates in connection with your 1995
21 Think Week on the subject of the Internet?
22 A. Well, before I go off on Think Week, I
23 get boxes of information, usually three cardboard
24 boxes. And some of that I get a chance to look at
25 and some of it I don't. I don't recall specifically
84 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 what I was given for that Think Week.
2 MR. HOUCK: Let's mark as Exhibit 346 a
3 memorandum -- strike that -- an e-mail from Pat
4 Ferrel to Russ Siegelman dated May 3, 1995, on the
5 subject of Bill G's Think Week documents.
6 (The document referred to was marked
7 by the court reporter as Government Exhibit 346 for
8 identification and is attached hereto.)
9 Q. BY MR. HOUCK: Do you recall whether
10 you reviewed the attachment to Exhibit 346 in
11 connection with your Think Week activities in 1995?
12 A. I don't think I did.
13 Q. I won't ask you any questions about it
14 then.
15 How did the process work for giving you
16 Think Week materials? Did your senior executives
17 collect items that might be of interest to you and
18 send them to you for your review?
19 A. Well, most of my Think Week time is
20 focused on technology issues and so there is a
21 variety of people I solicit to provide input. It's
22 not -- many of them are not executives, but people
23 who might have things that I'm interested in learning
24 about.
25 Q. Do you recall that Mr. Siegelman was
85 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 one of the people whom you asked to collect materials
2 for you for your 1995 Think Week?
3 A. I think probably I asked Brian Flemming
4 to gather the material and he would have gone out to
5 the other people asking.
6 Q. What position did Mr. Flemming have
7 in --
8 A. He had an assistant position working
9 for me.
10 Q. Was it your expectation that the
11 inclusion of Internet Explorer with Windows would
12 drive up Internet Explorer's market share?
13 MR. HEINER: Objection. Ambiguity.
14 THE WITNESS: I'm not sure what you
15 mean. We do know that when we included Internet
16 Explorer in Windows, it gained basically no market
17 share.
18 MR. HOUCK: I'd like to mark as
19 Exhibit 347 what purports to be a transcript of a
20 question-and-answer session with Mr. Gates and others
21 at Microsoft's Financial Analysts Day on July 24,
22 1997. And this is a document I've downloaded from
23 the Microsoft Website, Mr. Gates.
24 (The document referred to was marked
25 by the court reporter as Government Exhibit 347 for
86 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 identification and is attached hereto.)
2 Q. BY MR. HOUCK: I'll ask you to take a
3 look, sir, at page 8 of Exhibit 347.
4 And before you do so, let me ask you
5 this. Do you recall attending this Financial
6 Analysts Day Executive Q & A session?
7 A. Yes.
8 Q. And what is that exactly?
9 A. It's a chance for people to ask
10 questions.
11 Q. And who attends?
12 A. Some people from the press, some people
13 from various financial firms or investment firms.
14 Q. On page 8 appears the following
15 question: "Bill and Steve, you both referred to the
16 importance of building browser share over the coming
17 year. Can you be more explicit about why browser
18 share is important to various aspects of your
19 business and maybe talk about some of the initiatives
20 you're going to be undertaking to increase it?"
21 And then Mr. Ballmer gives a response,
22 the last paragraph of which is as follows: "There
23 are a lot of things we're investing in over the
24 course of the next year in marketing. Of course, the
25 new browser is the key thing - IE 4.0. But if you
87 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 take a look at the initiatives, the content
2 partnership that Paul's teams have formed, the things
3 that we're doing with ISP, the work we're doing with
4 large accounts on digital nervous systems, where the
5 IE browser -- IE 3 today, IE 4 tomorrow -- is fairly
6 fundamental to what we're doing on browser share, the
7 way we're trying to get large accounts, and large and
8 small accounts to author their content to use our
9 dynamic HTML stuff; all of those actions should help,
10 I think, drive up our browser share."
11 And you're quoted as saying, "Yeah,
12 along with the integration."
13 Do you recall that question and your
14 giving an answer, Mr. Gates?
15 A. No.
16 Q. Do you have any reason to doubt the
17 accuracy of this transcript?
18 A. Well, in general, transcripts like this
19 which come off an audio tape are somewhat unreliable,
20 but I don't have a specific recollection about that
21 specific question and answer.
22 MR. HOUCK: I'd like to mark as
23 Exhibit 348 an e-mail from Mr. Allchin to various
24 people dated January 6, 1997.
25 (The document referred to was marked
88 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 by the court reporter as Government Exhibit 348 for
2 identification and is attached hereto.)
3 Q. BY MR. HOUCK: What do you understand
4 the second e-mail to contain, Mr. Gates, on
5 Exhibit 348?
6 A. Looks like Ben Slivka is making some
7 comments on something.
8 Q. Do you understand that this e-mail
9 contains slides that were prepared for a presentation
10 you made or were to make in or about January of 1997?
11 A. No, these are not slides that were
12 prepared for me to give. I think these are -- it may
13 have been something that Ben Slivka was looking at
14 doing, I'm not sure.
15 Q. The subject of the second e-mail from
16 Mr. Slivka to Mr. Maritz is "Overview slides for
17 BillG/NC & Java session with 14+'s on Monday."
18 Do you know what the reference here is
19 to a "session with 14+'s"?
20 A. Well, 14 probably refers to the fact
21 that in our jobs in the technical group, level 14 is
22 a fairly high level. And I know we had a meeting
23 where we asked some of those high-level people to
24 come and sit and talk about our strategy and indicate
25 what they thought about the strategy.
89 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q. Do you recall making a presentation
2 yourself at that meeting?
3 A. I made a presentation, but not of these
4 slides.
5 Q. What was the subject of your
6 presentation?
7 A. I don't recall exactly, but it
8 certainly wasn't these slides.
9 Q. Do you recall a discussion at that
10 session of the NC and Java challenge?
11 A. No.
12 Q. Do you have any understanding as to
13 what is meant here by the NC and Java challenge?
14 A. I'm sure NC stands for network computer
15 and the competition that came from that direction.
16 And Java I'm sure refers to the competition coming
17 from that direction.
18 Q. Why did you consider Java to be a
19 challenge at this point in time?
20 A. Well, the term Java is used in a lot of
21 different ways. There's a part of it with respect to
22 run times that was a direct competitor to Windows.
23 Q. Under "Key Platform Challenge" the memo
24 states "Possible emergence of a set of APIs and
25 underlying system software that lead to lesser or no
90 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 role for Windows."
2 Do you recall any of the portion of the
3 discussion on this subject at that meeting?
4 A. No.
5 Q. The next sentence says, "Puts our other
6 (server and apps) businesses at a disadvantage."
7 Do you recall any portion of the
8 discussion on this subject at this meeting?
9 A. No.
10 Q. Under the heading "Response Summary"
11 various items appear. One is "Increase IE share"
12 followed by "Integrate with Windows."
13 Do you recall any discussion about this
14 portion of the meeting?
15 A. Remember we haven't established that
16 these slides were ever presented at any meeting, so
17 no, I don't recall that being discussed, but doing it
18 in the context of the slides means nothing to me
19 because I don't -- certainly don't think I presented
20 any slides like this.
21 Q. Do you have any recollection of a
22 discussion at this meeting as to how to increase IE
23 market share?
24 A. No.
25 Q. Next page refers to another response as
91 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 "Differentiate through Windows integration."
2 Do you recall any aspect of a
3 discussion on this subject?
4 A. No.
5 Q. Do you recall -- strike the question.
6 Is it correct that the Netscape browser
7 was one of the principal means through which the Java
8 virtual machine was distributed?
9 A. I don't know what you mean "was
10 distributed." Certainly the Java virtual machine has
11 the ability to be distributed with any application
12 over the Internet, so just like all software on the
13 Internet, distribution is wide open.
14 Q. Did you form any judgment yourself as
15 to whether the Netscape browser was the major
16 distribution vehicle for the Java virtual machine?
17 A. Well, I don't know what you mean "the
18 Java virtual machine." Understand that many
19 different companies have Java virtual machines.
20 Netscape had one that was different than the one that
21 Sun had, which was different than ours, which was
22 different than HP's, which was different than IBM's,
23 which was different from Novell's, so you'll have to
24 be more specific. But in terms of distributing those
25 things, they're out there on the Internet easy to
92 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 get.
2 MR. HOUCK: I'll mark as Exhibit 349 an
3 e-mail from Paul Maritz to Mr. Gates and others dated
4 July 14, 1997.
5 (The document referred to was marked
6 by the court reporter as Government Exhibit 349 for
7 identification and is attached hereto.)
8 Q. BY MR. HOUCK: To save time, I'll tell
9 you I'm going to ask you about the very first e-mail
10 here from Mr. Maritz to Mr. Dunie and yourself and
11 others. And in particular, where it says "If we look
12 further at Java/JFC being our major threat, then
13 Netscape is the major distribution vehicle."
14 Do you see that?
15 A. I see it.
16 Q. What does JFC refer to here, if you
17 know?
18 A. Well, as I said, it's all about run
19 time APIs and JFC was the term for what Netscape was
20 putting out as a set of run time APIs, which was
21 different than what Sun was putting out but was their
22 Netscape 1.
23 Q. Do you have any understanding as to
24 what Mr. Maritz meant here when he referred to
25 Netscape as the major distribution vehicle?
93 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A. Well, Netscape had some unique APIs and
2 one of the ways they were distributing it was through
3 their software products, including the browser.
4 Q. Did you understand that in Mr. Maritz's
5 view Netscape was the principal means by which people
6 were acquiring the Java virtual machine?
7 A. Well, you actually started these
8 questions asking about Sun's virtual machine and I
9 explained to you that Netscape's is different, so I'm
10 not sure what you're referring to now.
11 Q. What did you understand, sir, by
12 Mr. Maritz's reference to being the major
13 distribution vehicle -- strike that.
14 When Mr. Maritz said that Netscape was
15 the major distribution vehicle, what did you
16 understand him to be saying the vehicle for?
17 A. The Netscape run time bits. Not Sun's
18 virtual machine. It says JFC there, so obviously
19 it's not Sun.
20 MR. HOUCK: I'd like to mark as
21 Exhibit 350 an e-mail from Mr. Slivka to various
22 people dated June 12, 1997.
23 (The document referred to was marked
24 by the court reporter as Government Exhibit 350 for
25 identification and is attached hereto.)
94 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q. BY MR. HOUCK: The second e-mail on the
2 first page here is from Chris Jones and it says,
3 "Here is final copy of the memo we sent to BillG for
4 Think Week about what we should do to get to 30%
5 browser share."
6 Do you recall reviewing the attachment
7 as part of your 1995 Think Week?
8 A. I didn't review it.
9 Q. What were Mr. Jones's responsibilities
10 in 1995?
11 A. Good question.
12 Q. Do you recall?
13 A. No. He might have worked for Maritz.
14 MR. HOUCK: I'd like to take a short
15 break now. Do you want to stop for lunch now or --
16 MR. HEINER: Let's take a lunch break.
17 VIDEOTAPE OPERATOR: The time is
18 12:04 p.m. We're going off the record.
19 (Lunch recess.)
20 THE VIDEOGRAPHER: The time is 12:54.
21 We're going back on the record.
22 Q BY MR. HOUCK: In or about June 1995,
23 Mr. Gates, did you become involved in the planning
24 for some meetings with Netscape?
25 A No.
95 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q I'd like toe mark as Exhibit 352 --
2 351. I'd like to mark as Exhibit 351 an e-mail
3 chain. This appears to have been produced from
4 Mr. Gates' file.
5 (The document referred to was marked by
6 the court reporter as Government's Exhibit 351 for
7 identification and is attached hereto.)
8 Q BY MR. HOUCK: Mr. Gates, Exhibit 351
9 is a series of e-mails that relate to some meetings
10 with Netscape. And I'm -- I'm going to start my
11 questioning from the earliest one chronologically
12 which is at the back of the group of e-mails here.
13 So I think to save time, it might make sense for you
14 to look seriatim at the ones I'm going to be asking
15 you about.
16 A Seriatim?
17 Q Yeah. In other words, my first
18 questions are going to be about the e-mail dated June
19 1, 1995.
20 A June what?
21 Q June 1, 1995 at the back of this
22 package. So I'm suggesting before I ask you
23 questions about a particular e-mail, you review that,
24 and then when I come to the next e-mail, you can
25 review that one.
96 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 If you'd like to do them all together,
2 it's up to you. I'm just trying to save some time
3 here.
4 A What does seriatim mean? Serially?
5 Q Correct. One right after the other.
6 A But does it mean more than serially?
7 Q I'm going to ask you about one e-mail
8 at a time. I'll point out to you the one that I'm
9 going to ask you about.
10 A Okay.
11 Q And my suggestion is you'll read that
12 one first, and then I'll ask you about that. And
13 then when I turn to the next one, I'll let you know,
14 and you can look at that one. But if you want to
15 look at all of them together, you're welcome to do
16 that.
17 So if you proceed as I suggest,
18 seriatim or serially, whatever the case may be, what
19 I'm going to do is ask you first about the e-mail
20 that appears on what's page 100 of the document here.
21 MR. HEINER: Mr. Houck, one question
22 for you, if you know, did we produce these to you
23 stapled like this? Or is this a collection that --
24 MR. HOUCK: Actually, that's a question
25 I had for you. I'm going to throw it back at you
97 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 that this was produced serially, as you'll see, by
2 the production number they're consecutive numbers.
3 But the pages at the bottom are not consecutive, and
4 I was going to ask you if you knew why that was, if
5 there were some documents or pages that were a part
6 of a group of memoranda or e-mail that was not
7 produced to us. As you'll see, they're consecutive
8 production numbers.
9 So if you could take that under
10 advisement and let me know what the answer is, I'd
11 appreciate it.
12 MR. HEINER: Okay. I certainly don't
13 know the answer sitting here now. Which pages are we
14 talking about? Are you talking about the Bates
15 numbering or something else?
16 MR. HOUCK: Yeah. The Bates numbering
17 is consecutive, but the page numbers applied by
18 Microsoft at the bottom are not consecutive, so it
19 looks like these are part of a larger document. And
20 my question is if there are pages missing that were
21 not produced to us.
22 MR. HEINER: Okay. Those page numbers
23 just FYI are just a funny thing to see down there.
24 I'm not sure even what those refer to, but we'll try
25 to figure it out.
98 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 MR. HOUCK: Thank you. Okay.
2 Q The e-mail I want to ask you about
3 first, Mr. Gates, is dated June 1, 1995, and the very
4 top portion indicates that the bottom portion is
5 being sent to you for your information by Paul
6 Maritz, and the bottom portion is an e-mail from
7 Thomas Reardon dated June 1, 1995, on the subject of
8 working with Netscape.
9 Do you recall receiving this memorandum
10 or e-mail?
11 A E-mail, no.
12 Q I apologize for using my old-fashioned
13 terminology.
14 You don't recall receiving this e-mail
15 particularly?
16 A No.
17 Q The e-mail states that,
18 "Dan and Barb and I met late
19 yesterday to review our recent
20 discussions with Netscape and form
21 our next few action items. Dan is
22 meeting with Jim Barksdale, their
23 CEO, shortly."
24 Do you understand the reference to Dan
25 to be a reference to Dan Rosen?
99 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A Probably.
2 Q And is the reference for Barb a
3 reference to Barbara Fox?
4 A I mean, you could ask Thomas.
5 Probably.
6 Q Do you have any understanding, sir?
7 A Based on -- I've never spoken to Thomas
8 about this. I don't remember seeing the e-mail.
9 Q Do you recall speaking to anyone about
10 the meeting referred to here between Dan Rosen and
11 Jim Barksdale?
12 A No.
13 Q The e-mail goes on to list working
14 goals which are:
15 "1. Launch STT, our
16 electronic payment protocol. Get STT
17 presence on the Internet.
18 "2. Move Netscape out of
19 the Win32 Internet client area.
20 "3. Avoid cold or hot war
21 with Netscape. Keep them from
22 sabotaging our platform evolution."
23 Do you understand the reference to
24 Win32 Internet client to be a reference to Windows
25 95?
100 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A No.
2 Q What do you understand it to be a
3 reference to?
4 A Win32.
5 Q Can you describe what that is?
6 A 32 bit Windows.
7 Q Is Windows 95 a 32 bit Windows product?
8 A It's one of them.
9 Q Were there any other 32 bit products in
10 development in June of 1995?
11 A Certainly.
12 Q Which ones?
13 A Windows NT.
14 Q Do you know whether Mr. Reardon was
15 referring to Windows NT and Windows 30 and Windows 95
16 or one or the other?
17 A Win32's a term that refers to all the
18 32 bit platforms.
19 Q And as I understand your testimony, is
20 that the 32 bit platforms under development in June
21 of 1995 were Windows NT and Windows 95; is that
22 correct?
23 A No. Windows NT was shipping and there
24 was a new version that was under development.
25 Q And Windows 95 was in development at
101 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 this time?
2 A Certainly.
3 Q In the portion of the e-mail
4 denominated No. 2 which is, "Move Netscape out of
5 Win32/Win95, avoid battling them in the next year,"
6 there appears the following statement in the second
7 paragraph, quote,
8 "They appear to be moving
9 fast to establish themselves in the
10 value-add app business by leveraging
11 Netscape itself as a platform."
12 Do you recall whether you agreed that
13 that's what Netscape was doing back in June '95?
14 A At this time I had no sense of what
15 Netscape was doing.
16 Q Okay.
17 The next e-mail I want to ask you about
18 is on page 231 of the document, and it's an e-mail
19 from Paul Maritz to various people including yourself
20 regarding the Netscape meeting, and it's dated June
21 5, 1995.
22 A How did you find that?
23 MR. HEINER: You have to go
24 surprisingly the opposite direction.
25 MR. NEUKOM: You have to go by Bates
102 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 numbers.
2 THE WITNESS: Yeah. If you just use
3 those numbers, those numbers are sequential.
4 MR. BOIES: 9594.
5 THE WITNESS: 237? Okay.
6 MR. HEINER: No. Which one?
7 MR. HOUCK: 231. Page 231. Bates No.
8 594. I'll take your eminent counsel's suggestion,
9 and refer to it by Bates number, make it a little bit
10 easier.
11 Q Here Mr. Maritz reports that he did not
12 get the impression from the meeting he had that
13 Netscape was ready for a broad, strategic
14 relationship.
15 Do you see that?
16 A Do you think that refers to a meeting
17 he had? I don't think so.
18 Q Let me refer you to page 596, Bates No.
19 596.
20 A Okay.
21 Q It's e-mailed the same date. And it
22 says,
23 "Attached is my summary of the meeting that
24 Nathan, Paul and I had with Jim Barksdale of
25 Netscape."
103 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Do you understand the reference of Paul
2 to be a reference to Paul Maritz?
3 A Oh, maybe he is talking about a meeting
4 he had.
5 Q Do you have any recollection of
6 discussing Mr. Maritz's impression of this meeting
7 with Netscape?
8 A I didn't think Paul had met with
9 Netscape.
10 Q So you have no present recollection of
11 discussing with Mr. Maritz his views based on a
12 meeting he had with Mr. Barksdale in or about the
13 early part of June 1995?
14 A No.
15 Q Let me refer you next to a Bates No.
16 page 585. And this is an e-mail to you and others
17 from Dan Rosen regarding a Netscape meeting, and the
18 date of the e-mail is June 22, 1995. It's page 585
19 Bates number.
20 You got it?
21 A Uh-huh.
22 Q Do you want to look at the e-mail first
23 before I ask you some questions, or do you want me to
24 proceed?
25 A Go ahead.
104 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Do you recall getting this particular
2 e-mail?
3 A No. I recall getting this e-mail from
4 Brad Silverberg on 584 but not this one from Dan
5 (indicating).
6 Q And you have no reason to believe you
7 didn't get it; is that correct?
8 A That's right. I'm still confused if it
9 actually was enclosed in the other one or not. From
10 the way it's printed out, it may have been. And
11 although my name is there, I don't remember getting
12 that one. I do remember getting this one which it
13 may also be an enclosure to.
14 Q Do you understand this to be Mr.
15 Rosen's report on the meeting he had on June 21,
16 1995, with Netscape executives?
17 A It looks like it. The thing I recall
18 is the Reardon --
19 Q Right.
20 A What he calls his perspective that Brad
21 sent to me.
22 Q Right. Did you understand that
23 Mr. Reardon had a somewhat different perspective on
24 the meeting than Mr. Rosen had?
25 A Yes.
105 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Who was the senior Microsoft executive
2 at the June 21st meeting?
3 A There were no senior executives at that
4 meeting.
5 Q Who was the most senior of the people
6 there?
7 A You would have to tell me who was at
8 the meeting. I have no idea who was at the meeting.
9 Q Did you understand that Dan Rosen was
10 at the meeting?
11 A Apparently from this e-mail, yes.
12 Q Did you understand that Tom Reardon was
13 at the meeting?
14 A From his e-mail, yes.
15 Q Did you understand that Jim Allard was
16 at the meeting?
17 A Jim who?
18 Q Allard.
19 A Jay Allard?
20 Q Jay Allard, yeah.
21 A I don't know.
22 Q How about Chris Jones?
23 A I don't know. Does one of these list
24 who was at the meeting?
25 Q Let me just ask you: Do you have any
106 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 recollection as you sit here as to who you were told
2 attended the meeting on behalf of Microsoft other
3 than Mr. Reardon?
4 MR. HEINER: Can I have the question
5 read back?
6 (Question read.)
7 MR. HEINER: Objection. Foundation.
8 THE WITNESS: I'm not certain what you
9 mean, "told."
10 Q BY MR. HOUCK: Were you informed,
11 Mr. Gates, who attended the meeting on behalf of
12 Microsoft?
13 A I don't think so.
14 Q Do you have any understanding, as you
15 sit here today, who attended that meeting on behalf
16 of Microsoft?
17 A Well, the last page of the thing you
18 gave me on 599 might relate to that. But I don't
19 have any prior knowledge about it.
20 Q The e-mail from Mr. Rosen on the first
21 page says, quote,
22 "Our goals going into the
23 meeting were (in priority order):
24 "1. Establish Microsoft
25 ownership of the Internet client
107 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 platform for Win95.
2 "2. Have Netscape add value
3 to the NT server and Back Office
4 platform (above our stuff), making it
5 the preferred Internet solution.
6 "3. Have Netscape
7 preferentially support Microsoft
8 authoring tools/solutions and support
9 our viewers.
10 "4. Send a message to the
11 marketplace that Netscape and
12 Microsoft were cooperating on
13 Internet issues."
14 Do you recall discussing these goals
15 with any of the Microsoft people who attended the 16 meeting in advance of the meeting?
17 A No.
18 Q The next page of the e-mail says,
19 "Chris Jones summed up the
20 purpose nicely: 'We need to
21 understand if you will adopt our
22 platform and build on top of it or if
23 you are going to compete with us on
24 the platform level.'"
25 Did you understand that was a principal
108 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 purpose of Microsoft in attending this meeting with
2 Netscape?
3 MR. HEINER: Objection.
4 THE WITNESS: No. It says in the Rosen
5 memo the purpose of the meeting was to scope out
6 specific areas that the relationship between the two
7 companies might take and to set in place a process to
8 either conclude a strategic relationship or go our
9 separate ways.
10 Q BY MR. HOUCK: Do you have any present
11 recollection as you sit here as to what the purpose
12 of the Microsoft executives was in attending the
13 meeting?
14 A Well, there were no Microsoft
15 executives in the meeting.
16 Q You don't consider Mr. Rosen a
17 Microsoft executive?
18 A No. Inside Microsoft -- I don't know
19 about other companies -- but the VPs are called
20 executives and the non-VPs are called non-executives,
21 and there were no executives at that meeting.
22 Q Let me rephrase the question then.
23 Do you have any understanding as you
24 sit here today as to what the purpose was of the
25 Microsoft employees who attended the meeting with
109 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Netscape on June 21, 1995?
2 A I can read to you from the stuff you've
3 given me here.
4 Q I don't want you just to read, I'm
5 asking for your present recollection if you have one.
6 I can read the document myself.
7 A I don't know what you mean my present
8 recollection.
9 Q As you sit here today, do you have any
10 recollection as to what your understanding was back
11 in June 1995 as to the principal purpose of the
12 Microsoft employees in the meeting with Netscape?
13 A I wasn't involved in setting up the
14 meeting, so I -- I can see what Reardon said here, I
15 can see what Rosen said here. You've read something
16 that purports to be something that Jones said. I
17 mean --
18 Q As we discussed before, did you
19 understand that Mr. Reardon and Mr. Rosen had
20 different perspectives on the meeting?
21 A Well, I -- I got some e-mail from Brad
22 Silverberg after the meeting that showed that Reardon
23 seemed to have a more realistic view of what was
24 going on.
25 Q Did you share his view?
110 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 MR. HEINER: Objection.
2 THE WITNESS: I had no view whatsoever.
3 Q BY MR. HOUCK: When you said Reardon
4 had a more realistic view of the meeting, can you
5 explain what you meant?
6 A Well, Reardon's mail says,
7 "Maybe I am being a dick,
8 but there is no deal here. If we are
9 smart and deft and engaged at the
10 right levels, we have a chance to
11 cooperate on a few of these smaller
12 things."
13 So usually the -- if you have two
14 people that go to a meeting and one comes back and
15 says "Looks great," and the other comes back and says
16 "It doesn't look good," my business experience is the
17 person who says that it doesn't look good is probably
18 the one who has the most accurate view of the
19 meeting, particularly when you're dealing with Thomas
20 Reardon and Dan Rosen.
21 Q So you thought that Reardon's view of
22 how the meeting went was likelier the more accurate
23 one?
24 A In the sense that it didn't look like
25 much would come out of it, yes.
111 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Okay.
2 Do you recall, as you sit here today
3 apart from just reading these e-mails, anything that
4 was reported back to you by any of the participants
5 from Microsoft at this June 21st meeting?
6 A Well, I think somewhere about this time
7 somebody said to me that -- asked if it made sense
8 for us to consider investing in Netscape. And I said
9 that that didn't make sense to me, I didn't see that
10 as something that made sense.
11 Q Do you recall who said that to you?
12 A It would have been probably suggested
13 in a piece of e-mail from Dan, I think.
14 Q Do you recall when you got that
15 suggestion, whether it was before or after the
16 meeting?
17 A Oh, it would have been after the
18 meeting.
19 Q Do you recall anything else that anyone
20 told you back in June '95 about the meeting?
21 A No.
22 Q Did you personally devote time,
23 Mr. Gates, to studying Netscape and trying to
24 determine what their sources of revenue were?
25 A In what time frame are we talking
112 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 about?
2 Q Well, do you recall doing that at all?
3 A I personally didn't make any study of
4 it. But I know that in late '95 when we reviewed a
5 bunch of different competitors, one of those was
6 Netscape, and there was some revenue analysis done as
7 part of that.
8 Q Do you recall an employee at Microsoft
9 by the name of Amar Nehru?
10 A I know Amar.
11 Q Did he work for you directly?
12 A Never.
13 Q Who did he work for?
14 A He's at least five levels below me, and
15 I have no idea who he works for.
16 Q Do you recall that he worked for
17 Mr. Chase?
18 A I'm certain that he did not.
19 Q Let me mark as exhibit --
20 A Are you talking -- what's the last name
21 of Amar?
22 Q It's Amar Nehru.
23 A Yeah. He did not.
24 Q N-e-h-r-u.
25 Mark as Exhibit 352 an e-mail from
113 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Mr. Gates to Amar Nehru.
2 (The document referred to was marked by
3 the court reporter as Government's Exhibit 352 for
4 identification and is attached hereto.)
5 MR. HOUCK: I think I marked the wrong
6 document, but we'll probably get that at some point.
7 I apologize. So let me mark as the next exhibit,
8 Exhibit 353 -- strike what I said, I think we do have
9 the right document, and I apologize for the
10 confusion.
11 Okay. I gave you the wrong document.
12 Let me mark as Exhibit 353 the December 1, 1996
13 e-mail. I apologize once more.
14 THE WITNESS: December 1, 1996?
15 MR. HOUCK: Yeah.
16 THE WITNESS: Oh, is this something I
17 haven't seen?
18 MR. HOUCK: Yes. And I apologize.
19 There were a couple of e-mails from Mr. Nehru -- or
20 to Mr. Nehru, I gave you the wrong one, I don't want
21 to ask you about that one right now. So what I want
22 to ask you about is Exhibit 353, and this is a
23 December 1, 1996 e-mail from you to Mr. Nehru.
24 (The document referred to was marked by
25 the court reporter as Government's Exhibit 353 for
114 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 identification and is attached hereto.)
2 Q BY MR. HOUCK: Do you recall asking
3 Mr. Nehru in or about December 1996 to collect for
4 you information about Netscape revenues?
5 A No.
6 Q Do you recall sending this e-mail on or
7 about December 1, 1996 to Mr. Nehru?
8 A No.
9 Q Okay.
10 Do you recall receiving from Mr. Nehru
11 the attached e-mail dated November 27, 1996?
12 A From time to time we do reviews of
13 various competitors, and at least one point in time
14 Netscape was one of the people that we looked at. So
15 it doesn't surprise me, but I don't remember it
16 specifically.
17 Q On the second page of the exhibit,
18 which is part of Mr. Nehru's November 27, 1996
19 e-mail, he talks about browsers.
20 A What page?
21 Q Page 2.
22 A Okay.
23 Q He identifies there sources of
24 Netscape's revenue. He says,
25 "Browser revenue for the
115 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 quarter amounted to $45 million (a 32
2 percent increase over the last
3 quarter) representing 60 percent of
4 total Netscape revenue."
5 Do you have any reason to doubt the
6 accuracy of the information reported there?
7 A Well, I know that Mr. Nehru didn't work
8 for Netscape, so I'm sure he didn't have access to
9 the figures directly. If you're interested in that,
10 you should ask Netscape.
11 Q Was this the best information you had
12 in December of 1996 as to the proportion of
13 Netscape's revenue that was derived from browsers?
14 A I don't know.
15 Q Do you recall receiving any other
16 information than this on that subject?
17 A I might have seen an analyst report.
18 It says here we're 70 percent confident
19 about our numbers.
20 Q Do you recall why it was in this time
21 frame you had asked Mr. Nehru to collect this
22 information for you?
23 A I don't think I did. I already told
24 you that.
25 Q You have no recollection of asking him
116 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 for this information?
2 A I'm quite certain I wasn't the one who
3 asked for the information.
4 Q Do you have any recollection as to who
5 did?
6 A Perhaps Steve.
7 Q Steve, you mean Steve Ballmer?
8 A Uh-huh.
9 Q In your memo here -- strike that.
10 In your e-mail here you say, "What kind
11 of data do we have about how much software companies
12 pay Netscape?"
13 Do you recall asking that question to
14 Mr. Nehru in or about December 1996?
15 A It looks like I sent him that question
16 after he sent out one of these competitive analysis
17 reports.
18 Q Do you recall -- strike that.
19 Do you have any reason to believe you
20 didn't ask him for this information on December 1,
21 1996?
22 A Now, wait a minute. Now, you're
23 confusing two things. There's the information here
24 enclosed which I didn't ask him for.
25 Q I understand.
117 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A And that's what you've been asking me
2 about earlier.
3 Q No, sir.
4 A Then there's the question here in my
5 e-mail, I have no idea if he ever responded to that,
6 but that question certainly looks like it came from
7 me. But that's different than --
8 Q I understand. I'm not confused.
9 A Okay.
10 Q Let me straighten the record out here.
11 Your testimony, as I understand it, is
12 you believe that in all likelihood the information
13 initially collected by Mr. Nehru was sought by
14 Mr. Ballmer; is that right?
15 A I know it wasn't -- I'm pretty sure it
16 wasn't me who asked for it.
17 Q Correct. And then you got this e-mail
18 from Mr. Nehru and you in turn asked him what kind of
19 data do we have about how much software companies pay
20 Netscape; is that right?
21 A That's part of the e-mail I sent to him
22 it looks like, yes.
23 Q Okay.
24 The -- Exhibit 353, in particular
25 Mr. Nehru's memo, says his conclusion was of the $45
118 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 million in revenue obtained that quarter by Netscape
2 as a result of the browsers ISPs commanded the
3 largest share at 40 percent of browser revenue.
4 Did you have any reason to doubt the
5 accuracy of that information obtained by Mr. Nehru?
6 A Well, I'll say two things about that:
7 First of all, he's not including the
8 prime -- when he gives that number he's not including
9 the primary browser revenue source which is what was
10 called service revenues in this report; that is,
11 taking the ad space in the browser, which is proven
12 to be the biggest source of revenue and a significant
13 source of revenue for browsers, he's not including
14 that in. So that would be a rather significant
15 change.
16 Also, although I haven't had a chance
17 to read his entire e-mail, it says that his
18 confidence in these numbers is about what he says 70
19 percent.
20 So clearly, there are people at
21 Netscape who would be 100 percent sure about the
22 numbers.
23 Q Do you know what, if any, service
24 revenue Netscape was earning from its browsers in or
25 about the first quarter of 1996?
119 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A No, I don't.
2 Q Was Microsoft earning any service
3 revenue on its browsers the first quarter of 1996?
4 A In the first quarter of 1996? No.
5 That developed into a large business subsequently in
6 our case.
7 Q Do you know whether Netscape was any
8 different or not?
9 A Well, it's a measurable business for
10 them. You can just read what I say in the mail.
11 Q Do you know how that source of
12 revenue -- strike that.
13 Why don't we just take a very short
14 break.
15 MR. HEINER: Okay.
16 THE VIDEOGRAPHER: The time is 1:32.
17 We're going off the record.
18 (Recess.)
19 THE VIDEOGRAPHER: The time is 1:47.
20 We're going back on the record.
21 MR. HEINER: During the break I checked
22 with our people who do document productions about
23 Exhibit 351 and asked them what these page numbers
24 are at the bottom of the pages. And they said that
25 we found these documents instead of archives so we
120 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 went back and searched in connection with the current
2 case. So these were documents that were actually
3 printed out back for some other case, presumably in
4 1995 or something like that.
5 And when we printed the documents they
6 would just page number every single page.
7 So the documents -- and then we
8 produced the responsive documents. So pages --
9 whatever pages are missing here are e-mail about any
10 subject under the sun.
11 And then that also tells you that
12 whether or not we produced these stapled, they
13 probably shouldn't be stapled. It's really
14 individual e-mail strings.
15 MR. HOUCK: Okay.
16 MR. HEINER: For what it's worth.
17 MR. HOUCK: I would like to mark as
18 Exhibit 354 an e-mail from Mr. Gates to various
19 people dated May 19, 1996, on the -- and the subject
20 is "Some thoughts on Netscape."
21 (The document referred to was marked by
22 the court reporter as Government's Exhibit 354 for
23 identification and is attached hereto.)
24 Q BY MR. HOUCK: Is Exhibit 354 a
25 memorandum you prepared on or about May 1996?
121 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A It looks like it is. I don't have a
2 specific recollection.
3 Q On the second page under the heading
4 "Netscape" you say,
5 "During this Thinkweek I had
6 a chance to play with a number of
7 Netscape products. This reenforced
8 the impression that I think all of us
9 share that Netscape is quite an
10 impressive competitor."
11 Do you recall what it was that led you
12 to the conclusion that Netscape was an impressive
13 competitor?
14 A I think the memo speaks for itself in
15 terms of outlining that.
16 Q Did you come to believe that their
17 products would be popular with consumers?
18 A That's a very vague question.
19 Q Can you answer it or not?
20 A In its current vague form? No.
21 Q Did you come to the conclusion that
22 Netscape had high quality products in or about this
23 time frame?
24 A Not all of their products but some of
25 them.
122 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Which products did you believe were of
2 high quality?
3 A Well, the memo gets into that. I'm
4 glad to read it.
5 Q Do you have any additional recollection
6 as you sit here apart from just reading the
7 memorandum?
8 A No.
9 Q Was it your understanding that in or
10 about this time frame Netscape sought to generate
11 revenue by charging money for its browser?
12 A That's kind of a complex area because,
13 in fact, they didn't really charge people for the
14 browser. If you wanted to just download it and use
15 it, they never followed up and charged anyone.
16 So as I show in the memo, one of the --
17 when it's under "Their price," I show "Free."
18 Q You also show $49; correct?
19 A Yeah. It says "$49 & free." 49 was
20 the nominal price which no one had any reason to pay
21 at all.
22 Q Did you understand from Mr. Nehru
23 and/or other people at Microsoft that, in fact,
24 Netscape was generating revenue by sales of its
25 browser?
123 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A Nothing significant, I think, came out
2 of that $49 offering. They had a retail value at an
3 offering at a different price, and they had some
4 corporate licensing. But in terms of the $49, I
5 don't know of any data that I had that would suggest
6 that that was something people were paying.
7 Q Do you have any recollection at all as
8 you sit here today of receiving any data that
9 indicated how much revenue Netscape was generating
10 through sales of its browser at a $49 price?
11 A Well, I know they were getting revenue
12 from the Search button and the Home Page hits
13 essentially advertising fees. And I had seen some
14 data about that.
15 Q Did you see any data at all with
16 respect to how much money was being generated by
17 sales of the browser?
18 A I just said I saw some data about
19 revenue they got from essentially the advertising
20 sales.
21 Q Right.
22 Do you recall seeing any data with
23 respect to revenue generated from sales of the
24 browser itself?
25 MR. HEINER: Is this any particular
124 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 time, any particular channel?
2 MR. HOUCK: In or about this time
3 period, which is May of 1996.
4 MR. HEINER: And is the question about
5 the $49 retail offering?
6 MR. HOUCK: Correct.
7 THE WITNESS: I don't think that $49
8 retail offering is very popular. The particular memo
9 that you've got in front of me here is -- doesn't
10 relate much to that. It's talking more about the
11 different products and Microsoft plans to have better
12 products.
13 MR. HOUCK: Move to strike that answer
14 as nonresponsive.
15 Q As you sit here today, Mr. Gates, do
16 you have any recollection of receiving data that
17 purported to show how much, if any, revenue was being
18 generated by Netscape through sales of its web
19 browser at retail?
20 A The $49 product?
21 Q Can you answer the question?
22 MR. HEINER: Asked and answered.
23 THE WITNESS: Which SKU?
24 MR. HOUCK: The $49 product.
25 THE WITNESS: I don't remember any
125 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 specific data. But as to that SKU, I'm -- I don't
2 think their sales were ever significant.
3 Q BY MR. HOUCK: The next -- strike that.
4 On Bates No. page 954 appears the
5 heading "Browser War."
6 Do you see that?
7 A Uh-huh.
8 Q What did you mean by your use of that
9 phrase?
10 A I think somebody -- I wasn't the one
11 who created that phrase. I think it was a phrase
12 that some people had used to refer to the competition
13 in the browser space including that between us as the
14 provider of Windows and Netscape with Navigator.
15 Q Under the heading of your memo entitled
16 "Browser War" appears the following statement:
17 "If we continue to have
18 minimal share in browsers, a lot of
19 our other efforts will be futile."
20 Do you recall what other efforts you
21 had in mind there?
22 A Well, for example, our desire to get
23 advertising revenue from the Search button and the
24 Home Page in the browser.
25 Q Do you recall anything else you had in
126 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 mind?
2 A I don't know if Blackbird had been
3 canceled by this point or not. But since it was a
4 superset browser, it would have fit that category.
5 Q Anything else?
6 A Well, MSN, our online service, because
7 of its dependency on the Blackbird technology.
8 Q Do you recall any other efforts that
9 you had in mind here?
10 A No.
11 Q You go on to say, quote,
12 "By the end of the year we
13 have got to get more than 25 percent
14 share so we are taken seriously,"
15 close quote.
16 Do you recall why you came to that
17 conclusion?
18 A I don't remember what I was thinking at
19 the time I wrote the memo.
20 Q Do you recall who you had in mind as
21 taking you seriously?
22 A At the time I wrote the memo?
23 Q Yes.
24 A No I don't recall.
25 Q That paragraph concludes with your
127 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 statement as follows, quote,
2 "I'm very excited that we
3 are going to incent OEMs to focus
4 their efforts around IE."
5 IE is a reference, I take it, is a
6 reference to Internet Explorer; is that correct?
7 A It looks like it's referring to IE3
8 there.
9 Q Do you recall what it was you were
10 going to do to incent OEMs to focus their efforts
11 around Internet Explorer 3.0?
12 A We did something where we encouraged
13 them to pick up the Windows Update that included the
14 improvements in the IE technology that took us from
15 IE2 which had been included, of course, in Windows
16 for quite some time.
17 We -- in the normal course, it takes
18 OEMs six to nine months before they get updates
19 widely available. And I think there was a plan to
20 incent them to update their Windows bits on their
21 machines more rapidly than normal so that users would
22 have a chance to get IE3 on the machine instead of
23 IE2, which although it had been a part of Windows,
24 had not received measurable market share.
25 Q Your memo concludes with the following
128 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 statement:
2 "At some point financial
3 minded analysts will begin to
4 consider how much of a revenue stream
5 Netscape will be able to generate."
6 Do you recall what your thinking was in
7 noting this to the other recipients of the memo?
8 A Well, this memo, if you look at it, is
9 not really about financial issues at all. It's about
10 the good work we're doing in various software
11 categories relative to some of the work that
12 Netscape's doing. And I wouldn't call it a
13 conclusion, but there's a paragraph there in the end
14 that talks about Netscape revenue.
15 I don't have any recollection about
16 what I was thinking when I wrote that paragraph at
17 this point.
18 Q Of what significance was it to you what
19 financial analysts concluded about Netscape's revenue
20 stream?
21 A Netscape was a competitor of ours and
22 we actually pay attention to our competitors' revenue
23 since it's a measure of the popularity of their
24 products and we can compare how we're doing in
25 customer popularity with how they're doing sometimes
129 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 by looking at revenue. Sometimes that doesn't work.
2 But it's -- I think it's -- it's typical to know
3 what -- what our revenue is.
4 Q Do you generally make public comments
5 about the financial health or welfare of Microsoft's
6 competitors?
7 A I'm often asked about various
8 companies, and I respond to questions. But I've
9 never given a presentation that had that focus.
10 Q Do you recall making public statements
11 in mid-1996 calling into question Netscape's
12 financial viability?
13 A I may have been asked questions about
14 that by the press, but I didn't go out and make any
15 speeches or statements about it.
16 Q I'd like to mark as Exhibit 355 a copy
17 of an article that appears in The Financial Times of
18 London dated July 3, 1996.
19 (The document referred to was marked by
20 the court reporter as Government's Exhibit 355 for
21 identification and is attached hereto.)
22 Q BY MR. HOUCK: The next to the last
23 page of Exhibit 356 appears the following quote,
24 "'Our business model works
25 even if Internet software is free,'
130 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 says Mr. Gates. 'We are still
2 selling operating systems.'
3 Netscape, in contrast, is dependent
4 upon its Internet software for
5 profits, he points
6 out."
7 Do you recall making statements to this
8 effect to The London Financial Times in or about July
9 1996?
10 A I'm quite sure I didn't make a
11 statement. I think I was interviewed by Louise Kehoe
12 where she kept saying to me how various people were
13 predicting, including Netscape, that we would go out
14 of business because of the Internet and that we were
15 doomed because of the Internet.
16 Q Do you recall in or about July 1996
17 providing the information attributed to you here to
18 the reporter for The London Financial Times?
19 A I don't know what you mean "providing
20 the information."
21 Louise Kehoe is a reporter. She
22 interviewed me about this time with the proposition
23 that we were on our way out of business. And I said
24 to her, "If we didn't do a good job for our customers
25 in terms of what they wanted, that would be the case,
131 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 but that we thought we could do -- do good work
2 around the new scenarios that customers were
3 interested in."
4 MR. BOIES: Move to strike the answer
5 as nonresponsive.
6 Q BY MR. HOUCK: Do you recall,
7 Mr. Gates, giving the quotation imputed to you here
8 to Ms. Kehoe?
9 A Well, the best -- I don't recall this
10 specific interview. It would be valuable to
11 understand what her questions were and what the
12 sequence of questions were. She probably has a tape
13 of that that you could get.
14 Q Do you have any reason to believe that
15 she has inaccurately quoted you here in her article?
16 A I know it was an interview where the
17 basic supposition was that Netscape and others were
18 going to put us out of business. That much I recall.
19 But in terms of the specific quote, I'm not sure.
20 Q When you say you're not sure, do you
21 mean -- strike that.
22 Do you have any reason, as you sit here
23 today, to believe that this statement attributed to
24 you is improperly reported by Ms. Kehoe?
25 A I think if you want to understand what
132 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 I said in the interview with her, you should get the
2 transcript of it and understand what series of
3 questions -- what the context was for anything that I
4 said.
5 Q Sir, do you deny making the statement
6 attributed to you here?
7 A I think it was in the context of some
8 fairly aggressive questions about was my company
9 going to go out of business in the near future. And
10 I think it's -- it's valuable to know that context
11 whenever you look at an answer somebody gives to a
12 question.
13 Q Well, can you answer my question "yes"
14 or "no"?
15 Read the question back to him, please.
16 (The following question was
17 read:
18 "Q Sir, do you deny making
19 the statement attributed to you
20 here?")
21 THE WITNESS: I'm not denying making
22 the statement, but I am pointing out that I didn't
23 just make a statement. I was in an interview with a
24 reporter, and it would be valuable to understand her
25 questions. And I do recall the general tenure of
133 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 those questions. And so if your interest is
2 understanding the quote, understanding that context
3 is, I think, quite valuable.
4 Q You understood, did you not, Mr. Gates,
5 that people interested in the computer business
6 followed very carefully what it was you said about
7 the future of the business?
8 A That's quite a vague question.
9 Q You've appeared on covers of various
10 magazines; correct?
11 A My picture has.
12 Q Right. And is it not your
13 understanding that many newspaper reporters and
14 financial analysts are very interested in getting
15 your views on future developments in the computer
16 business?
17 A I've never done anything that would
18 give me any measurement of that.
19 Q You have no understanding whatsoever?
20 A I know I've been interviewed a lot of
21 times. I mean, when you say "popularity," help me
22 understand what sort of answer you want. Do you want
23 a number?
24 Q You just answered when you made
25 statements like this about Netscape that had the
134 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 potential to affect Netscape's stock price?
2 A I've told you several times that I
3 object to your using the word "statement" to refer to
4 the interview.
5 Q When you gave quotations like this to
6 financial analysts and reporters, you understood, did
7 you not, that statements like this could have a
8 negative impact on Netscape's stock price?
9 A I participated in an interview with
10 Louise Kehoe, and I explained why her basic
11 proposition that we were going -- going to go out of
12 business soon wasn't necessarily the case.
13 And so the focus of the interview was
14 certainly on Microsoft and our future, our lack of a
15 future. She's not a financial analyst, she's a
16 reporter.
17 Q Okay. Move to strike.
18 Would you read the question to him
19 again. And I'll ask you if you could answer the
20 question, Mr. Gates.
21 (The following question was read:
22 "When you gave quotations
23 like this to financial analysts and
24 reporters, you understood, did you
25 not, that statements like this could
135 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 have a negative impact on Netscape's
2 stock price?")
3 THE WITNESS: I don't know what you
4 mean "quotations like this."
5 Q BY MR. HOUCK: When you gave this
6 particular quotation to Ms. Kehoe, did you consider
7 that it might have a negative impact on Netscape's
8 stock price?
9 A It certainly was not in any way a
10 consideration of my defending Microsoft in this
11 particular interview.
12 Q Did you understand, sir, that
13 application vendors would be less likely to write
14 applications for a browser marketed by a company that
15 did not have long-term prospect for financial
16 viability?
17 A I've been quoted many times as talking
18 about Netscape as a company that has a good future.
19 And, you know, I'm -- when I've been directly asked
20 about that, I've said that they're in an exciting
21 field and have lots of opportunity.
22 MR. HOUCK: Move to strike the answer
23 as nonresponsive.
24 Q Do you recall any other statements --
25 strike the word "statements" since you don't like it.
136 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Do you recall any other quotations
2 attributed to you, Mr. Gates, in the press with
3 respect to your views of Netscape's financial
4 viability?
5 A Well, I was at MIT and -- meeting with
6 the W3C people, and I spoke in front of some
7 students. And a student asked what would I think
8 about him going and taking a job at Netscape. And I
9 said I thought that would be an interesting thing and
10 that Netscape had a lot of opportunities, and I
11 subsequently saw that quoted in the press. So I
12 remember that as one example.
13 Q Anything else?
14 A I don't recall any other specific times
15 when I was questioned about Netscape.
16 Q Do you recall making statements to the
17 press to the effect that Microsoft did not need to
18 make any revenue from its Internet software to be
19 successful as a company?
20 A Well, I don't know what you mean -- you
21 see, that's the -- I'm not sure what you mean by
22 "Internet software." What of our products? Could
23 you designate for me which ones you mean as being
24 Internet software?
25 Q I'm going to get marked as Exhibit
137 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 357 -- 356. I'm going to have marked as Exhibit 356
2 a copy of a story from the Business Week dated July
3 15, 1996.
4 (The document referred to was marked by
5 the court reporter as Government's Exhibit 356 for
6 identification and is attached hereto.)
7 Q BY MR. HOUCK: Exhibit 356 on the
8 second page contains the following statement,
9 quote -- which is attributed to you,
10 "'One thing to remember
11 about Microsoft,' says Chairman
12 William H. Gates III, 'We don't need
13 to make any revenue from Internet
14 software.'"
15 Can you tell me what you had in mind
16 there when you referred to Internet software?
17 MR. HEINER: Objection. Foundation.
18 THE WITNESS: So what was the question?
19 MR. HOUCK: Well, let me withdraw the
20 question and ask you.
21 Q Do you have any reason to doubt that
22 you made a statement to this effect to a Business
23 Week reporter?
24 A I'm pretty sure I wasn't interviewed by
25 Business Week for this article, so I think it's an
138 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 indirect quote of some kind.
2 Q Do you recall publicly stating that one
3 thing to remember about Microsoft was that it didn't
4 need to make any revenue from Internet software?
5 A As I told you earlier, I never
6 commented on Netscape or their prospects in a speech
7 or a statement. The only time where that ever came
8 up, I'm quite sure, is when reporters would push on
9 the fact that maybe Microsoft was about to be put out
10 of business by the Internet and various things going
11 on relative to the Internet. So there -- I mean,
12 there was no statement like that. There may have
13 been an answer along those lines, but I don't think I
14 can recall specifically.
15 Q Do you have any reason to doubt that
16 the quotation attributed to you is accurate?
17 A No. I think there's something strange
18 because I'm pretty sure I wasn't interviewed for this
19 article. I've never been interviewed by Robert Hof
20 who is the author, and I think I'd remember if I had
21 been interviewed for this article.
22 Q Did you believe that the Internet
23 threatened to put Microsoft out of business?
24 A There were a lot of things, including
25 the move to the Internet, that if Microsoft doesn't
139 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 do a lot of innovative work means that our revenue
2 will drop to zero.
3 Q Did you ever come to the point where
4 you seriously reached the conclusion that
5 Microsoft's -- Microsoft was likely to be put out of
6 business by the Internet?
7 A Our risk of being put out of business
8 has been a constant feeling for me ever since we've
9 been in business.
10 Q The Business Week article that we've
11 been looking at says that:
12 "Microsoft's expected fiscal
13 1996 sales were on the order of $8.6
14 billion with $2 billion in aftertax
15 profits."
16 Is that approximately correct?
17 A I'm not sure. There's a lot of ways to
18 get those figures.
19 Q Do you have any understanding what
20 Microsoft's 1996 revenues were?
21 A No.
22 Q Do you have any estimate, as you sit
23 here today, as to what Microsoft's aftertax profits
24 were in 1996?
25 A No.
140 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Were they on the order of $2 billion
2 approximately?
3 A I told you I don't know.
4 Q You have no way of estimating what they
5 were -- strike the question.
6 What's your best estimate of what
7 the -- Microsoft's aftertax profits were in fiscal
8 year 1996?
9 A I don't think it's good to guess
10 because it would be very easy to go get the real
11 figure.
12 Q And you'd have to guess; is that right?
13 A If you don't let me get the real
14 figure, then I would have to guess. But if you give
15 me a few minutes I can go get the real figure. So if
16 you're at all interested in the facts, just give me a
17 few minutes.
18 Q I am. So go ahead, go get it.
19 A Okay.
20 MR. HEINER: Take a break.
21 THE VIDEOGRAPHER: The time is 2:23.
22 We're going off the record. This is the end of Tape
23 2 of the deposition of Bill Gates:
24 (Recess.)
25 THE VIDEOGRAPHER: The time is 2:32.
141 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 We're going back on the record. This is Tape 3 of
2 the videotaped deposition of Bill Gates.
3 Q BY MR. HOUCK: Mr. Gates, were you able
4 to obtain the information you were looking for?
5 A Yeah. It looks like the numbers given
6 in the Business Week article, the sales and profit
7 numbers are accurate.
8 Q We've seen a number of references in
9 documents we've looked at to browser share. And
10 you've been quoted as saying, "We wake up in the
11 morning thinking browser share."
12 Do you recall that quotation?
13 A No.
14 Q I'd like to have marked as Exhibit 357
15 an article from PC Magazine Online dated March 13,
16 1996.
17 (The document referred to was marked by
18 the court reporter as Government's Exhibit 357 for
19 identification and is attached hereto.)
20 Q BY MR. HOUCK: Exhibit 357, Mr. Gates,
21 is a report on a keynote speech you gave at the San
22 Francisco Microsoft Developers Conference.
23 Do you recall giving a speech in that
24 conference?
25 A Yeah. I spoke there.
142 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q It quotes you as saying, "We wake in
2 the morning thinking browser share."
3 Do you recall saying that?
4 A It's reasonably illiterate. I'd have
5 to look at the transcript. It's not typical for me
6 to be illiterate.
7 Q Do you deny making the statement
8 attributed to you here, Mr. Gates?
9 A It's very possible I made a statement
10 to this effect in a more literate form, but the
11 transcript's available.
12 Q Isn't it a fact that winning a browser
13 share was a very important goal for Microsoft in
14 1996?
15 A We were measuring web usage share to
16 see how popular browser was. And we had -- one of
17 our goals was to increase that.
18 MR. HOUCK: I'd like to mark as Exhibit
19 358 an e-mail from Mr. Gates to Joachim Kempin dated
20 January 5, 1996.
21 (The document referred to was marked by
22 the court reporter as Government's Exhibit 358 for
23 identification and is attached hereto.)
24 Q BY MR. HOUCK: Do you recall writing
25 this e-mail, Mr. Gates, on or about January 5, 1996?
143 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A No.
2 Q Do you have any reason to doubt you
3 wrote it?
4 A No.
5 Q First sentence says, quote, "Winning
6 Internet browser share is a very important goal to
7 us," close quote.
8 Why did you believe that to be the case
9 in January of 1996?
10 A Are you asking me to reconstruct my
11 state of mind on January 5th?
12 Q Do you recall why it was, Mr. Gates,
13 that in the beginning of 1996 you came to believe
14 that winning Internet browser share was a very
15 important goal for Microsoft?
16 A I can't say for sure what I was
17 thinking at the time, but I can explain to you why it
18 makes sense to me that I would have written this
19 mail.
20 Q Am I correct that you have no present
21 recollection of what it was specifically that led you
22 to this conclusion back in January, 1996?
23 A I don't remember my exact thinking in
24 January 1996.
25 Q Okay.
144 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A I can explain my general recollection
2 of that time period, but I can't reconstruct what I
3 was thinking when I wrote the mail.
4 Q What is your general recollection of
5 the time period?
6 A We thought that people -- the usage of
7 the Internet was increasing, and it was important for
8 us to build a browser with better features including
9 integration that would be attractive enough that
10 people would choose to use it.
11 Q Who was Microsoft's principal
12 competitor for browser share in January of 1996?
13 A I think at that stage Netscape had 80
14 to 90 percent usage share which is a particular way
15 of measuring browser hits.
16 Q Is it your understanding that the
17 percentage of the PC system price attributable to the
18 operating system has risen in recent years?
19 MR. HEINER: Objection. Vague and
20 ambiguous.
21 THE WITNESS: I'm not sure which of our
22 products you're asking me about.
23 Q BY MR. HOUCK: Have you seen any
24 studies at Microsoft comparing the trend of pricing
25 with respect to PC systems to the price Microsoft
145 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 charges for its operating system products?
2 A No. I've seen a comparison of our
3 operating system prices with other people's operating
4 system prices.
5 Q I'd like to mark as Exhibit 359 a chart
6 entitled "PC Value Analysis" dated March 4, 1996.
7 (The document referred to was marked by
8 the court reporter as Government's Exhibit 359 for
9 identification and is attached hereto.)
10 Q BY MR. HOUCK: Do you recall seeing
11 Exhibit 359 before, Mr. Gates?
12 A No. I'm pretty sure I haven't seen it.
13 Q Do you know by whom at Microsoft it was
14 prepared?
15 A No. When I haven't seen something it's
16 very rare for me to know who prepared it.
17 Q Let me mark as Exhibit 360 an e-mail
18 from Mr. Kempin to yourself, Mr. Gates, dated
19 December 16, 1997.
20 (The document referred to was marked by
21 the court reporter as Government's Exhibit 360 for
22 identification and is attached hereto.)
23 Q BY MR. HOUCK: Do you recall receiving
24 Exhibit 360 from Mr. Kempin?
25 A No.
146 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q What was Mr. Kempin's position in
2 December of 1997?
3 A He was in charge of our relationship
4 with hardware manufacturers.
5 Q By "hardware manufacturers" you mean
6 OEMs?
7 A That's a shorthand term.
8 Q This e-mail says, "feedback
9 appreciated."
10 I take it you don't recall whether or
11 not you gave him any feedback?
12 A No.
13 Q From time to time does Microsoft do
14 surveys of people known as web professionals?
15 A I don't know.
16 Q I'd like to mark as Exhibit 361 -- I'd
17 like to mark as Exhibit 361 an e-mail from Brad Chase
18 to Bill Gates, Paul Maritz and Steve Ballmer dated
19 September 8, 1997.
20 (The document referred to was marked by
21 the court reporter as Government Exhibit 361 for
22 identification and is attached hereto.)
23 Q BY MR. HOUCK: Does Exhibit 361 refresh
24 your recollection that Microsoft from time to time
25 conducts surveys of web professionals?
147 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A Do you want me to read this thing?
2 Q Just answer my question, if you can.
3 You don't have to read the whole thing to answer my
4 question, and I'll point you to one particular page
5 that I want to ask you about.
6 A I haven't seen the document before, but
7 it appears to be a specific case where some
8 information is gathered about what the document seems
9 to call web professionals. I don't know what they
10 mean by that term.
11 Q That wasn't my question.
12 You have no understanding of what's
13 meant by "web professionals," sir?
14 A In the context of this document I
15 don't. I can give you many possible definitions for
16 the term.
17 Q Okay.
18 Do you have any understanding as to the
19 type of web professionals that were surveyed here?
20 A If I studied the document, I could
21 learn something about that. I haven't read it.
22 Q Do you have any reason to believe this
23 document was not sent to you on or about September 8,
24 1997?
25 A No.
148 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Okay.
2 Do you recall receiving information in
3 or about April 1997 that many users did not want to
4 have a browser integrated into the operating system?
5 A No.
6 Q I'd like to mark as Exhibit 362 --
7 MR. HEINER: That's the way to do it.
8 Don't even hazard a guess.
9 MR. HOUCK: I'd like to mark as Exhibit
10 362 an April 25, 1997 e-mail or memo from Randy
11 Trower to Chris Jones, Joe Belfiore and others
12 including Mr. Gates?
13 THE WITNESS: That's Tandy.
14 MR. HOUCK: Tandy Trower. I'm sorry, I
15 misspoke.
16 (The document referred to was marked by
17 the court reporter as Government's Exhibit 362 for
18 identification and is attached hereto.)
19 Q BY MR. HOUCK: Who's Tandy Trower?
20 A That's hard to answer. He's an
21 employee of Microsoft who often looks at user
22 interface issues and a number of job roles he's had
23 over the years.
24 Q Back on -- strike that.
25 Do you recall receiving this
149 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 memorandum?
2 A I think I do.
3 Q Back on Bates stamp page 130 under the
4 heading "Desktop/Web Integration."
5 A Yep.
6 Q The memo states:
7 "The concept of unifying the
8 user's desktop and web experience
9 sounds good and reasonable, but it's
10 not clear that this is what users
11 want and certainly is not what they
12 expect."
13 Do you know the basis of the statement
14 made here?
15 A He's talking about how to refine the
16 Desktop/Win integration.
17 It says we need to do a better job.
18 And then he talks about how to do the integration and
19 what he thinks is a different, better way.
20 Q Do you know the source of the
21 information he reports here to you?
22 A I'm sorry?
23 Q Do you know what the source of his
24 information was that he's reporting to you here?
25 A No.
150 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q He says in the next line, quote,
2 "Many users expect to just
3 get browser improvements with IE4,
4 and I've heard many a remark from
5 users that they don't want to view
6 their folders to look like web
7 pages."
8 Do you know where he obtained that
9 information?
10 A No.
11 Q Would you agree that it's fair to
12 describe Windows 98 as not a vital upgrade for PC
13 users?
14 MR. HEINER: Objection.
15 THE WITNESS: I'm not sure what you
16 mean by "vital." I mean, it --
17 Q BY MR. HOUCK: I'd like to mark as
18 Exhibit 363 an e-mail from Brad Chase to Walt
19 Mossberg and Mr. Gates dated May 15, 1998. The last
20 portion of this document, Mr. Gates, purports to be
21 an e-mail from yourself to Mr. Mossberg of the Wall
22 Street Journal where you say -- referring to Windows
23 98 -- "You are right that it is not a vital upgrade."
24 Do you see that?
25 A I see the paragraph there.
151 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Do you recall sending this e-mail to
2 Mr. Mossberg of The Wall Street Journal?
3 A It looks like the e-mail I sent him.
4 (The document referred to was marked by
5 the court reporter as Government's Exhibit 363 for
6 identification and is attached hereto.)
7 MR. HOUCK: At this time I'm going to
8 turn the examination over to Mr. Boies.
9 Why don't we go off the record while we
10 change places.
11 THE VIDEOGRAPHER: The time is 2:52.
12 We're going off the record.
13 (Off the record.)
14 THE VIDEOGRAPHER: The time is 2:54.
15 We're going back on the record.
16
17 EXAMINATION
18 BY MR. BOIES:
19 Q Good afternoon, Mr. Gates.
20 I'd like to begin by following up with
21 Exhibit 356 and Exhibit 355 that I think you have in
22 front of you.
23 First, with respect to Exhibit 356,
24 which is a 1996 Business Week article. I understand
25 your testimony to be that you do not recall giving an
152 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 interview to the reporter who wrote this. But do you
2 recall saying the statement attributed to you,
3 whether you said it to that reporter or to someone
4 else? And the statement I'm referring to is the
5 statement at the end of the article in which you are
6 quoted as saying:
7 "'One thing to remember
8 about Microsoft,' says Chairman
9 William H. Gates III, 'We do not need
10 to make any revenue from Internet
11 software.'"
12 A I don't remember saying that.
13 Q Did you say it, sir?
14 MR. HEINER: Objection. Asked and
15 answered.
16 THE WITNESS: I don't remember saying
17 it.
18 Q BY MR. BOIES: That wasn't my question,
19 sir.
20 Did you say it?
21 MR. HEINER: Objection. Harassing the
22 witness.
23 MR. BOIES: I'm not harassing the
24 witness. I want to know whether he had a
25 recollection of -- he may not know whether he said
153 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 it, he may think he didn't say it. I'm trying to
2 clarify what the witness's testimony is.
3 MR. HEINER: Can I have the first of
4 those two questions of those read back?
5 (The following record was read:
6 "Q First, with respect to
7 Exhibit 356, which is a 1996 Business
8 Week article. I understand your
9 testimony to be that you do not
10 recall giving an interview to the
11 reporter who wrote this. But do you
12 recall saying the statement
13 attributed to you, whether you said
14 it to that reporter or to someone
15 else? And the statement I'm
16 referring to is the statement at the
17 end of the article in which you are
18 quoted as saying,
19 "'One thing to remember
20 about Microsoft,' says Chairman
21 William H. Gates III, 'We do not need
22 to make any revenue from Internet
23 software.'
24 "A I don't remember saying
25 that.
154 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 "Q Did you say it, sir?
2 "MR. HEINER: Objection.
3 Asked and answered.
4 "THE WITNESS: I don't
5 remember saying it.")
6 MR. HEINER: The witness doesn't
7 remember saying it.
8 Q BY MR. BOIES: Do you doubt that you
9 said it, sir?
10 A Same answer.
11 Q Well, my question, sir, is whether you
12 doubt it. And I'd like the best answer you can give
13 to me on that question, whether you doubt saying
14 this. I understand --
15 A Given that I don't have a recollection
16 of saying it, you're sort of asking me to make some
17 kind of a guess.
18 Q Move to strike the answer as
19 nonresponsive.
20 A And I have --
21 MR. HEINER: There's likely to be
22 testimony during the rest of the afternoon that you
23 may not like from time to time. You'll probably have
24 to accept that as part of the examination.
25 MR. BOIES: Absolutely. And if it's
155 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 responsive, it will be his testimony. But if it is
2 not responsive, I intend to preserve the record and
3 move to strike it as nonresponsive.
4 MR. HEINER: And you should continue to
5 answer the questions as best you can responding to
6 the questions posed.
7 Q BY MR. BOIES: Do you have any reason
8 to believe that Business Week would make this quote
9 up, sir?
10 A They had made mistakes, but I'm not
11 suggesting that I know that they did in this case.
12 Q Do you recall saying publicly the
13 substance of what is attributed to you here? Perhaps
14 not the words but the substance of, "One thing to
15 remember about Microsoft, we don't need to make any
16 revenue from Internet software"?
17 A I feel quite sure I never gave a speech
18 or made a statement along those lines. I may have,
19 in response to reporters suggesting that Microsoft
20 was on the verge of doom, talked about the fact that
21 we were doing a lot of work and that we thought we
22 had a good opportunity on the Internet.
23 Q Now, at the time that, according to
24 you, reporters were suggesting that Microsoft was on
25 the edge of doom, Microsoft had profits of over $2
156 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 billion dollars in aftertax profits; is that correct?
2 A Well, I think it mischaracterizes what
3 I said completely to say that I'm just suggesting it.
4 That's really quite a misstatement.
5 MR. BOIES: Could I have the question
6 reread and the answer reread?
7 (The following record was read:
8 "Q Now, at the time that,
9 according to you, reporters were
10 suggesting that Microsoft was on the
11 edge of doom, Microsoft had profits
12 of over $2 billion dollars in
13 aftertax profits; is that correct?
14 "A Well, I think it
15 mischaracterizes what I said
16 completely to say that I'm just
17 suggesting it. That's really quite a
18 misstatement."
19 Q BY MR. BOIES: Having heard the
20 question, do you want to change your answer?
21 A I'll add to it if you want.
22 Q No. Do you want to change your answer?
23 A I'll be glad to add to it.
24 Q My question, sir, is: Do you want to
25 change your answer? You can say "yes" or "no."
157 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A I don't see any reason to change it.
2 I'll be glad to add to it.
3 Q Were reporters suggesting to you in
4 1996 that Microsoft was on the edge of doom, as you
5 have used that phrase?
6 A Many reporters suggested that, yes.
7 Q And in 1996 what were Microsoft's
8 revenues compared to Netscape's revenues?
9 A I don't know Netscape's revenues.
10 Q Approximately, sir?
11 A Approximately what?
12 Q Approximately what were Netscape's
13 revenues compared to Microsoft's revenues?
14 A You want me to guess at Netscape's
15 revenues?
16 Q I want you to give me your best
17 judgment and estimate as a chairman and CEO of
18 Microsoft, sir. If you call it guessing, you can
19 call it whatever you want. What I want is your best
20 estimate under oath as you sit here.
21 A I know that Microsoft's revenues would
22 be dramatically higher than Netscape's, but I -- I
23 really won't want to hazard a guess at Netscape's
24 revenue in particular.
25 Q As you sit here now, can you give me
158 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 any estimate or range at all of what Netscape's
2 revenues were in 1996?
3 A Zero to 200 million.
4 Q As you sit here now, can you tell me
5 any estimate or range of what Netscape's revenues are
6 today?
7 A I think zero to 500 million.
8 Q Can you be any more specific than that;
9 that is, can you narrow the range at all?
10 A Yeah. 200 million to 500 million.
11 Q Can you narrow the 1996 range at all?
12 The 1996 range you gave me was zero to 200 million.
13 A 30 million to 200 million.
14 Q Is that the best you can do as you sit
15 here now?
16 A Well, the chance of my being wrong goes
17 up as I narrow the range.
18 Q You've given me the very best estimate
19 that you can? That's your testimony?
20 A Well, it's all about probability. I
21 think it's highly probable that their revenue fell
22 into the range I gave you.
23 Q Did you make any effort in 1996 to find
24 out what Netscape's revenues actually were?
25 A Personally?
159 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Either personally or through some of
2 the many employees of Microsoft?
3 A Oh, I'm sure there were people at
4 Microsoft who looked at Netscape's revenues during
5 that year.
6 Q Did they communicate with you as to
7 what those revenues were at all?
8 A Among the thousands and thousands of
9 e-mail messages I get, I'm sure there were some that
10 had for certain periods of time information about
11 that.
12 Q Did you request any information
13 concerning Netscape's revenues in 1996?
14 A I'm sure I was in meetings where the
15 information was presented, but I don't think I was
16 the one who specifically asked for the presentation.
17 Q Whether you specifically asked for a
18 presentation in a meeting or not, did you ask people
19 to provide you with information concerning Netscape's
20 revenues in 1996?
21 A I may have asked some questions about
22 their revenue.
23 Q Do you recall doing that, sir?
24 A No.
25 Q Did you receive any answers to your
160 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 questions about Netscape's revenues?
2 A Although I don't specifically recall
3 it, I'm sure that in most cases I did.
4 Q It would be usual within Microsoft that
5 if you asked a question, you would receive an answer;
6 is that fair, sir?
7 A No. There's no -- there's lots of
8 questions I ask I don't get answers to. But well
9 over 50 percent I do.
10 Q When you say that there are lots of
11 questions that you ask people of Microsoft that you
12 don't get answers to, do you mean you don't get any
13 answer at all, they just ignore it?
14 A That happens.
15 Q Does it happen from people with a
16 sustained career within your company, sir?
17 A If they're busy enough on priorities
18 that I set for them, then yes.
19 Q You're the chief executive officer of
20 Microsoft.
21 Does Microsoft have a president?
22 A Depends on the time period that you're
23 asking about. Some time periods, yes; some time
24 periods, no.
25 Q Does it have one?
161 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A Today, yes.
2 Q Who is that?
3 A Steven Ballmer.
4 Q How long has Mr. Ballmer been
5 president?
6 A About 30 days.
7 Q What was his position before that?
8 A Executive vice president.
9 Q How long had he held that position?
10 A That's a good question.
11 There's been an increase in the grand
12 nature of titles over a period of time. Steve has
13 been a very high level executive for a long time.
14 But I don't think I came up with the use of the term
15 "executive vice president" until something -- no --
16 I'm not sure when I started using that term -- when
17 we used that term for his position.
18 Q Is it fair to say that Mr. Ballmer has
19 been a very high executive, to use your phrase,
20 within Microsoft for several years?
21 A Yes.
22 Q Did you ever ask Mr. Ballmer to provide
23 you with information concerning Netscape's revenues?
24 A No. I don't remember doing that. It
25 would be a very unusual thing for me to ask Steve.
162 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 He's -- as we discussed, he's a fairly
2 high level executive, so he doesn't generally go out
3 and work on my behalf gathering numbers.
4 Q Let me ask you to look at Exhibit 355
5 and, in particular, the second paragraph of the third
6 page which reads, quote,
7 "'Our business model works
8 even if all Internet software is
9 free,' close quote, says
10 Mr. Gates. Quote, 'We are still
11 selling operating systems,' close
12 quote. Netscape, in contrast, is
13 dependent on its Internet software
14 for profits, he points out."
15 You've testified as to the context in
16 which this statement was made. Did you understand at
17 the time that these words were used, that the
18 publication of these words might well affect
19 Netscape's business?
20 MR. HEINER: Asked and answered.
21 MR. BOIES: Don't think so.
22 THE WITNESS: In this interview I was
23 defending Microsoft in the work we were doing to the
24 reporter. And she was the one who was bringing up
25 Netscape in several of the questions.
163 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 The -- you know, the last part there
2 doesn't even seem to be a quote, so I'm not sure what
3 I said, actually.
4 Q BY MR. BOIES: When you were talking to
5 the reporter you knew that it was likely that the
6 reporter would publish at least some of what you told
7 the reporter; correct, sir?
8 A Yes.
9 Q When you used the words with this
10 reporter that are set forth here, did you understand
11 that if those words were published it might well
12 affect Netscape's business?
13 A I've already testified I don't remember
14 using those words. So trying to reconstruct my state
15 of mind around using those words when I don't
16 remember using those words is not going to be
17 possible.
18 Q Let me be sure I understand your
19 testimony.
20 It's your testimony that you do not
21 remember making this statement to the reporter?
22 That's your testimony?
23 A That's right.
24 Q Do you have any reason to doubt that
25 you made this statement to the reporter?
164 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A Well, it seems like we're going over
2 this again and again.
3 I think there were a series of
4 questions from her about -- you know, that
5 Netscape -- that Microsoft might not have the future
6 because of what was going on in the Internet. And
7 although I don't remember my specific answer, I do
8 remember her asking a lot of questions along those
9 lines.
10 Q My question now, sir, is not what the
11 reporter asked you, my question is whether you have
12 any reason to doubt that you said the words that the
13 reporter attributes to you.
14 A Do you mean the ones in quotes?
15 Q Let's begin with the ones in quotes,
16 sir.
17 Do you have any doubt or any reason to
18 doubt that you told this reporter in words or in
19 substance that Microsoft's business model works even
20 if all Internet software is free because you were
21 still selling operating systems?
22 A I don't remember saying that.
23 Q Do you have any reason to doubt that
24 you said that in words or in substance to this
25 reporter in 1996?
165 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A I'd want to go back and look at the
2 transcript to find out if I did or not.
3 Q My question is whether sitting here you
4 have any reason to doubt that you said these words.
5 A I don't remember saying those words.
6 Q I know that that's what you've said.
7 Now I'm asking you a different question, which is
8 whether you have any reason to doubt that you said
9 these words.
10 And if you don't understand the
11 question, you can simply tell me you don't understand
12 the question.
13 A I'm not sure what my memory can hold
14 except for knowing whether I remember if I said it or
15 not. I don't remember not saying it. That's kind of
16 unusual memory to have. But I think that's what
17 you're saying: Is there a specific memory in my head
18 when I go look up my memory where it says, "I never
19 said these words." And I don't have a memory of that
20 either.
21 Q Do you have a memory of stating the
22 substance of what is attributed to you even if you
23 don't remember saying the exact words?
24 A No.
25 Q Do you have any reason to doubt that
166 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 you said the substance of what is attributed to you?
2 A I have no recollection of saying what
3 is in the substance of that quote.
4 Q Is what is in the substance of this
5 paragraph inconsistent with what you told people
6 publicly in 1996?
7 A I'm not sure what -- you're asking me
8 to recall everything I said during that year and
9 compare it for consistency with this particular
10 sentence here?
11 MR. BOIES: Move to strike the answer
12 as nonresponsive.
13 MR. HEINER: Well, I had an objection
14 along the same lines. But I guess in this case the
15 witness stated the objection. Vague and ambiguous.
16 MR. BOIES: That's not a reason not to
17 answer the question.
18 MR. HEINER: No, that's fine. I'm just
19 saying --
20 THE WITNESS: And I did answer, which
21 is --
22 MR. BOIES: Read the question back,
23 please.
24 (The following question was
25 read:
167 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 "Q Is what is in the
2 substance of this paragraph
3 inconsistent with what you told
4 people publicly in 1996?")
5 THE WITNESS: I think you're asking me
6 for -- to check for consistency with all the
7 statements I gave during that 12-month period, and
8 I'm not able to do that.
9 Q BY MR. BOIES: Is what is stated in
10 this paragraph, the second paragraph on page 3 of
11 Exhibit 355, consistent with what you said publicly
12 in 1996?
13 MR. HEINER: Objection.
14 THE WITNESS: Well, you'd have to
15 understand the context of what her question -- what
16 she defined the word "Internet software" to be when
17 she was asking these questions. And sitting here
18 right now, I don't know when she was asking her
19 questions how she defined "Internet software." I'm
20 sure I would have asked her what she meant by it in
21 order to respond.
22 Q BY MR. BOIES: But you don't remember
23 what you said; is that what your testimony is?
24 A I don't remember what the -- in this
25 context she had -- she had defined what the term
168 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 "Internet software" meant.
2 Q Is it your testimony that at the
3 present time you simply don't know what this
4 paragraph means, it's unclear to you?
5 A I think to understand -- to decide if
6 that sentence taken out of the context of the
7 interview, if it's -- to understand what it means you
8 have to decide what you mean by the term "Internet
9 software." So if you want to tell me a definition of
10 "Internet software," then I can say to you, yes, this
11 seems correct to me or, no, it doesn't seem correct
12 to me.
13 Q My question to you, sir is: As you sit
14 here now, you don't have any knowledge of what is
15 meant by the term "Internet software" in this
16 quotation; is that what you're telling me?
17 A I'm not sure what it was meant
18 during -- what was meant by it during the interview.
19 There are many definitions you could have for that
20 term "Internet software."
21 Q And as you look at this paragraph which
22 says, quote,
23 "'Our business model works
24 even if all Internet software is
25 free,' close quote, says
169 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Mr. Gates. Quote, "'We are still
2 selling operating systems,' close
3 quote. Netscape, in contrast, is
4 dependent on its Internet software
5 for profits he points out."
6 Now, it's your testimony that in that
7 context you do not know what is meant by "Internet
8 software"?
9 A Well, to give this statement internal
10 consistency, it must have been in this interview I
11 wasn't including operating systems in the term
12 "Internet software," so the interviewer must have
13 defined it that way, and I was including some
14 products that Netscape was working on in that
15 definition.
16 Q Browsers perhaps, do you think?
17 A Well, if you want to ask me about
18 browser revenue, I'll be glad to. I can't comment on
19 whether browse -- how browsers relate to this
20 interview that I don't remember. I'll be glad to
21 answer any question about browsers.
22 Q Well, let me ask a question about
23 browsers, sir.
24 Do you have any doubt in your mind that
25 the reference to Internet software in this paragraph
170 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 is a reference to browsers?
2 A Internet software -- I can't think of a
3 definition of it that would be specifically just
4 browsers.
5 Q Would it include browsers?
6 A Most definitions of it would, yes.
7 Q Would it be clear to you, sir, that the
8 reference to Internet software here in this paragraph
9 includes browsers?
10 A Well, when you talk about browsers, you
11 have to think of different revenue streams. And it's
12 not clear if in this interview that distinction had
13 been drawn between the different potential revenue
14 streams generated by a browser.
15 Q When you say "this interview," you mean
16 the interview of you?
17 A That's right.
18 Q Right.
19 Let me try to put my question in a way
20 that maybe it will be more understandable.
21 Is it clear to you from the context
22 that's here that when a reference is made to Internet
23 software, that reference includes browsers?
24 A Well, outside of the quotes if you look
25 what the author wrote, she seems to have a very broad
171 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 definition of "Internet software." She seems to be
2 including electronic mail and groupware, perhaps even
3 database -- looks like database is included in her
4 definition.
5 MR. BOIES: Move to strike the answer
6 as nonresponsive.
7 Q Mr. Gates, with respect to the
8 quotation that is attributed to you, do you have any
9 doubt that Internet software, as used there, includes
10 browsers?
11 A If the distinction had been made about
12 the revenue streams, then, yes, it probably does.
13 Q Probably does include browsers?
14 A If the distinction had been made about
15 the different revenue streams.
16 Q If the distinction had been made in
17 this interview of you you're saying?
18 A That's right.
19 Q And it's your testimony that you just
20 don't remember whether or not that distinction was
21 made? Is that your testimony?
22 A That's right.
23 Q Let me ask you to look at another
24 exhibit, the one that I have just marked 364.
25 (The document referred to was marked by
172 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 the court reporter as Government's Exhibit 364 for
2 identification and is attached hereto.)
3 Q BY MR. BOIES: Do you have Exhibit 364
4 in front of you, sir?
5 Exhibit 355 that we were just talking
6 about is a July 3, 1996 Financial Times article.
7 Exhibit 364 is a June 10, 1996 Financial Times
8 article. And I'd like you to look on the fourth
9 page, the first paragraph, and you can read as much
10 of the document as you need to to put this in
11 context. But the paragraph that I'm interested in is
12 at the top of the page, and it says, quote,
13 "'Our business model works
14 even if all Internet software is
15 free,' close quote, says Mr. Gates.
16 Quote, 'We are still selling
17 operating systems. What does
18 Netscape's business model look like
19 if that happens, not very good,'"
20 close quote.
21 Did you say those words to this
22 reporter, Mr. Gates?
23 A Well, just understand we're covering
24 exactly the same ground. I didn't give two
25 interviews. This is all the same reporter, the same
173 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 interview. So we can go through all of that exactly
2 like we did. Louise Kehoe is Louise Kehoe, I gave
3 one interview.
4 Q Of course the June 10, 1996 article is
5 written by two reporters; correct, sir?
6 A And I've never met or given an
7 interview to Hugo Dixon as far as I can recall.
8 Q Well, let's see if looking at this
9 article in any way refreshes your recollection.
10 Did you say to a Financial Times
11 reporter in 1996, quote:
12 "'Our business model works
13 even if all Internet software is
14 free. We are still selling operating
15 systems. What does Netscape's
16 business model look like if that
17 happens? Not very good.'"
18 Did you say those words --
19 A I don't remember.
20 Q -- to a Financial Times reporter,
21 Mr. Gates?
22 A I said I don't remember.
23 Q Did you communicate the substance of
24 those words to a Financial Times reporter in 1996?
25 MR. HEINER: Asked and answered three
174 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 or four times just in the past 30 minutes.
2 MR. BOIES: This is the first time that
3 we've dealt with this paragraph or this statement.
4 MR. HEINER: The testimony is that it's
5 the same interview and the quotation's an exact quote
6 from the other one.
7 MR. BOIES: It's not an exact quote
8 from the other one.
9 MR. HEINER: Let's compare. They look
10 awfully close.
11 MR. BOIES: They do look very close.
12 And it seems, if you believe these reporters, to be
13 saying very similar things. But they are not the
14 same.
15 THE WITNESS: Where do you see the
16 difference? One just seems to have more words in it.
17 Maybe my reading skills aren't working today.
18 Q BY MR. BOIES: Well, one of things that
19 is different is in the one we're looking at right
20 now, Exhibit 364, it says as part of the
21 quote, "'What does Netscape's business model look
22 like if that happens? Not very good.'"
23 That quotation wasn't in the prior
24 article.
25 Now, maybe you don't remember saying
175 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 that either, Mr. Gates, but I think your counsel will
2 agree that I'm entitled to ask you whether you
3 remember saying that.
4 MR. HEINER: Well, the testimony was he
5 doesn't remember saying these words in this
6 interview.
7 MR. BOIES: And what I then asked him
8 was whether he remembered communicating the substance
9 of what is stated here.
10 THE WITNESS: Even when you add the
11 extra words on there in terms of my recollection of
12 the specifics or the substance, I'd say the same
13 thing I said before when we were talking about the
14 same quote but without those extra words not included
15 in this article.
16 Q BY MR. BOIES: So your testimony today
17 about the quotation in Exhibit 355 would be
18 applicable to what is attributed to you in Exhibit
19 364 as well?
20 A That's correct.
21 Q Okay.
22 Do you have any reason to believe that
23 there would have been any reason for this reporter to
24 have made up these quotations?
25 A Didn't you already ask that?
176 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q I asked that with respect to the
2 Business Week reporter. I'm now asking it with
3 respect to The Financial Times reporter.
4 A Same answer.
5 Q You do have to give it for the record,
6 sir. What I'm asking you is whether you have any
7 reason to believe that The Financial Times reporter
8 would have made up or had any reason to make up the
9 quotations that are attributed to you here.
10 A I don't think they're infallible, but I
11 have no reason to suspect in this case that they made
12 it up.
13 Q Okay.
14 Without regard to any particular
15 article, in 1996 did you tell people publicly that
16 Microsoft would do fine if Internet software or
17 browsers were free but that Netscape would not do
18 fine if Internet software or browsers were free?
19 A What do you mean by "Internet
20 software"?
21 Q What I mean is what you refer to as
22 Internet software in these various quotations.
23 A I'm afraid we're not going to be able
24 to know what my state of mind was when I gave that
25 interview. If you want to define it, I'll be glad to
177 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 answer the question.
2 Q Do I take it that your testimony is
3 that you simply have no recollection whatsoever as to
4 what you meant by these words in 1996?
5 A No. It wasn't what I meant. I
6 responded to a reporter's question, and I've already
7 said to you that she must have given me a reason to
8 understand what she meant in her questions in order
9 for me to be able to answer them.
10 Q Do you remember asking her what she
11 meant by those terms?
12 A I feel pretty sure I wouldn't have used
13 the term unless there was some understanding of what
14 she understood the term to mean.
15 Q Why is that, sir?
16 A I'm just saying it's not typical for me
17 to use a term with a reporter where it's a very open
18 unended term that can be used in a lot of different
19 ways without any understanding between myself and the
20 reporter of -- in that context, in that series of
21 questions, what's being referred to.
22 Q Well, I'd like to draw a distinction,
23 if I could, between having any understanding at all,
24 which could come from a variety of sources, and
25 asking the reporter for a definition.
178 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Did you ask the reporter for a
2 definition of what was meant by "Internet software"?
3 A All I can say, not recalling the
4 specifics in the interview, is that it's very
5 unlikely I would make a statement like that without
6 some common understanding between myself and the
7 reporter of what that term, which out of context is
8 incredibly ambiguous, what it meant in the context of
9 her series of questions.
10 Q And just to be sure I understand it.
11 What you're saying is that you don't
12 remember what the definition was and you don't even
13 remember that there was a definition, but you believe
14 there must have been a definition or you wouldn't
15 have been using these words.
16 Is that fair?
17 A There must have been a common
18 understanding, I wouldn't say a definition.
19 Q How would that common understanding
20 have been arrived at other than through a definition?
21 A Well, somebody can give examples. I'm
22 just saying it doesn't have to be a formal definition
23 for two people to have a context in a conversation of
24 what a word means. That is neither one has to say,
25 "I define the word as follows." So maybe I
179 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 interpreted your use of the word "definition" too
2 strictly.
3 Q Okay.
4 A So if you define "definition" for this
5 conversation in a loose way, then I'll understand
6 what you mean.
7 Q That is, what you need in order to
8 understand the question is to have me define what is
9 meant by "definition"?
10 A At least loosely.
11 Q What I mean by definition is what you
12 meant by definition when you said that you wouldn't
13 have answered this question unless you had a
14 definition of the word.
15 A "Common understanding" -- I used the
16 word "common understanding," and I'll stick with
17 that.
18 Q In 1996 was there a common
19 understanding of what was meant by "Internet
20 software"?
21 A In a context-free sense, absolutely
22 not.
23 Q Was there a common understanding of
24 what was meant by an Internet browser?
25 A The whole notion of what the browser --
180 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 what features it would contain or what it would mean
2 or all that was very uncertain in 1996.
3 Q Let me ask you a different question.
4 Do you believe that the publication of
5 this article and, in particular, the publication of a
6 statement attributed to you, whether accurately
7 attributed to you or not, that quote,
8 "'Our business model works
9 even if all Internet software is
10 free,' close quote, says Mr. Gates.
11 Quote, 'We are still selling
12 operating systems. What does
13 Netscape's business model look like
14 if that happens? Not very good,"
15 close quote.
16 Do you believe that the publication of
17 that statement affected Netscape?
18 A I know when people have been quoted in
19 the press, competitors, saying how -- what trouble
20 Microsoft is in and how much better their products
21 are, that it's rarely had a direct effect on our
22 business. I think somehow people rely on more
23 analytical observers.
24 MR. BOIES: I'll move to strike the
25 answer as nonresponsive.
181 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Would you read the question again,
2 please?
3 (The following question was read:
4 "Q Do you believe that the
5 publication of that statement
6 affected Netscape?")
7 THE WITNESS: What do you mean
8 "affected Netscape"?
9 Q BY MR. BOIES: Are you telling me that
10 you don't understand the question, sir?
11 A Yes, that's what I'm saying to you.
12 Q Okay.
13 By "affected Netscape," I mean
14 adversely affected Netscape.
15 A Like hurt their feelings, somebody
16 cried, or somebody in reading the article smiled?
17 Q Are you saying that you don't
18 understand what I mean by "adversely affected
19 Netscape"?
20 A No, I don't know what your criteria is.
21 I think it's likely somebody may have read it and
22 disagreed with it.
23 Q Do you think it adversely affected
24 Netscape's business prospects?
25 A I think the general work that we were
182 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 doing to do strong Internet software had an effect on
2 Netscape, but I don't think quotations like that had
3 any direct effect.
4 Q Now, you putting in the word "direct
5 effect," and I know that you're a very precise person
6 from the statement you've already made today. So I'm
7 going to ask you what you mean by the use of the word
8 "direct" there that you put in the answer that wasn't
9 in the question. What do you mean by "direct"?
10 A Well, I said earlier that there are
11 analytical observers like analysts, and they tend to
12 look at technology companies and deliver
13 pronouncements about them. And, you know, some of
14 them will be positive about a company, and some will
15 be negative about a company.
16 It's possible in looking at the general
17 activities of Microsoft, one of those analysts formed
18 a certain conclusion about Netscape and published
19 that conclusion and that that might have had an
20 effect. And so you could say that analysts may have
21 had an effect. And analysts look at what Microsoft
22 does, primarily in the products, not as much what we
23 say is what we do in shipping our products.
24 Q What I'm asking you about, of course,
25 right now is the effect of what you were saying or
183 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 what was attributed to you. And I do want to come to
2 the effect that your products had on Netscape as
3 well. But right now I want to talk about the effect
4 of what was attributed to you.
5 And what I'm asking you is whether you
6 believe that the publication of statements like this
7 attributed to you adversely affected Netscape's
8 business prospects.
9 A I'm not aware of any specific effect.
10 And my general experience is that when competitors
11 have made statements about us, that doesn't have an
12 effect, rather that the people who do analysis or the
13 actual products get shipped are what cause effects on
14 our business.
15 Q Do you think that the effect on
16 Microsoft's business of competitors saying things
17 about Microsoft is comparable to the effect on
18 Netscape's business of Microsoft saying things like
19 this about Netscape?
20 A Are we now talking about what was
21 published or what was said?
22 Q Well, we're talking about what was
23 published here.
24 A Okay. Well, then, stick to that.
25 Q That's what I am, sir, because I
184 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 understand that your testimony is that you just don't
2 remember saying any of these quotations that these
3 publications have attributed to you.
4 A No.
5 Q That's why I'm asking about what is
6 written here because there's no doubt -- you have no
7 doubt that this was actually published, do you, sir?
8 A I believe it was published.
9 Q Okay. So at least we know that The
10 Financial Times published, quote,
11 "'Our business model works
12 even if all Internet software is
13 free,' close quote, says Mr. Gates.
14 Quote, 'We are still selling
15 operating systems. What does
16 Netscape's business model look like
17 if that happens? Not very good,'"
18 close quote.
19 Now, I asked you whether you thought
20 that the publication of that adversely affected
21 Netscape's business prospects. And you then gave me
22 an answer that talked about the effect on Microsoft
23 of criticism of Microsoft.
24 Do you recall that?
25 A Well, that wasn't all that I said. We
185 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 can read back what I said.
2 Q If you would like to have it read back,
3 it's okay with me. I don't need to have it read
4 back. But if -- I've got as much time as I need to
5 finish the examination, sir, and I'm prepared to
6 spend as many days here as I have to to do that. I
7 think the record is quite clear as to what your
8 answer was, and I think it is quite clear that you
9 kept going back to Microsoft's experience, and that's
10 the only point I'm trying to get you to focus on.
11 Now, do you recall that enough to
12 answer the question, or do we need to go back?
13 Either way's okay with me.
14 A Go ahead and ask a question, and then
15 I'll decide.
16 Q Do you think -- because you're the one
17 that brought up the effect on Microsoft criticism.
18 Do you think that the effect on
19 Microsoft of criticism of it is comparable to the
20 effect on Netscape of a publication of statements
21 attributed to you like, quote,
22 "'Our business model works
23 even if all Internet software is
24 free,' close quote, says Mr. Gates.
25 Quote, 'We are still selling
186 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 operating systems. What does
2 Netscape's business model look like
3 if that happens? Not very good,'"
4 close quote.
5 A So you're supposing a case where I
6 personally criticized Microsoft?
7 Q I'm not supposing anything at all, sir.
8 A That's what you suggested.
9 Q No. Sir, let me try to be clear. And
10 perhaps I'm not being clear.
11 A Who's doing the criticism in your
12 hypothetical?
13 Q Well, I think the only person that has
14 mentioned the word "criticism" today is you; that I
15 think it came out of your answer when you were
16 talking about criticism of Microsoft. Now, if I've
17 misremembered your testimony about that, I will stand
18 corrected by the record.
19 But my recollection is that I asked you
20 whether you thought the publication of statements
21 like this would adversely affect Netscape's business
22 prospects. And my recollection is that you gave me
23 an answer, a substantial portion of which included a
24 statement that it had been your experience that
25 criticism of Microsoft didn't really affect your
187 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 business.
2 A No, I didn't say that. I said
3 statements by competitors, whether critical or
4 otherwise, I didn't think explained what happened to
5 our business but, rather, other factors could explain
6 what happened to our business.
7 Q Okay. Let me use "statements." And if
8 I misremembered the word "criticism," I apologize.
9 Do you think that the effect on
10 Microsoft's business of statements about Microsoft by
11 its competitors is comparable to the effect on
12 Netscape's business of the publication of statements
13 like, quote,
14 "'Our business model works
15 even if all Internet software is
16 free,' close quote, says Mr. Gates.
17 Quote, 'We are still selling
18 operating systems. What does
19 Netscape's business model look like
20 if that happens? Not very good,'"
21 close quote.
22 MR. NEUKOM: If you read that one more
23 time -- that's seven times. Come on.
24 MR. BOIES: I wish this question had
25 been answered simply. I think it could have been.
188 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 THE WITNESS: I gave you a very simple
2 answer that I was not aware of any effect on their
3 business by the publication.
4 Q BY MR. BOIES: And that may have
5 answered my question, sir. But because I know that
6 you're a person that uses words very precisely, I
7 need to be sure that we haven't missed something
8 between the question and the answer. My question was
9 whether you believed that this publication affected
10 Netscape's business prospects.
11 You said you didn't know of any effect.
12 And I just wanted to be sure that your answer was
13 meant to apply to the full breadth of my question.
14 A The full breadth of your question?
15 Q Yes, sir. And if that's confusing to
16 you, as I say, I will put the question as many times
17 as I need to to be sure that I get it clear to you.
18 My question -- and unfortunately, I'm
19 going to have to quote it again.
20 MR. HEINER: There's no need. There's
21 really no need.
22 Q BY MR. BOIES: But my question, sir, is
23 whether you believe that the publication of
24 statements like the statement in The Financial Times
25 that, quote, "'Our business model works even if all
189 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Internet software it free,' close quote, says
2 Mr. Gates. Quote, 'We are still selling operating
3 systems. What does Netscape's business model look
4 like if that happens? Not very good,'" close quote,
5 adversely affects Netscape's business prospects.
6 A I told you, I'm not aware of any
7 effects on Netscape by the publication of that
8 statement.
9 Q Have you finished your answer?
10 A Yes.
11 Q Do you believe that the publication of
12 that statement adversely affects Netscape's business
13 prospects, whether you are aware of precisely what
14 those effects are or not?
15 A Well, I'm not absolutely sure, but I
16 did explain to you that in the analogous situation
17 the effect has not come from that but from other
18 factors.
19 Q And what is the analogous situation
20 that you refer to?
21 A Statements by competitors about
22 Microsoft.
23 Q And do you believe that statements by
24 competitors about Microsoft are analogous in terms of
25 their effect on Microsoft to statements like this
190 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 about Netscape?
2 A I'm not absolutely sure what you mean
3 by "like this," but in general, yes.
4 Q By "like this" I mean the quotation in
5 The Financial Times article.
6 A I don't know what it means to be "like"
7 that.
8 Q Is that because you don't understand
9 the word "like" or because you don't understand what
10 it means to be like something?
11 A Neither.
12 Q What is it then?
13 A I stated in quite a broad way that
14 statements by competitors about us have not been a
15 factor to explain future developments in our business
16 prospect, but rather other factors explain any
17 changes in our business prospects. And I'll say that
18 broadly about competitive statements by competitors.
19 Q Statements by competitors about
20 Microsoft?
21 A That's right.
22 Q Now, what I'm asking about is not
23 statements about Microsoft by competitors. But I'm
24 asking about statements about Netscape. And the
25 question that I most recently asked that I thought
191 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 was simpler than it is turning out to be is whether
2 you believed that statements about Microsoft by its
3 competitors would have an analogous effect on
4 Microsoft to statements like the one published in The
5 Financial Times in 1996 in June that we've been
6 looking at.
7 MR. HEINER: Object to the question.
8 It's just hopelessly vague and ambiguous.
9 Are you referring to other kinds of
10 statements?
11 MR. BOIES: Okay. I'll go back. I was
12 trying to avoid quoting the darn thing again. But if
13 I have to be precise, I'll be precise.
14 MR. HEINER: Mr. Boies, it's the other
15 side of the quote. It's the other kinds of quotes
16 about other companies.
17 MR. BOIES: Okay. Let me try to put it
18 as precisely as I can.
19 MR. HEINER: Before you do the
20 recitation, I would just like to say that we're ready
21 for a break when you come to a logical stopping
22 point. I'm not sure there will be a logical stopping
23 point any time soon since it's been two hours on this
24 point.
25 MR. BOIES: I don't know if it's been
192 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 two hours. I just started 50 minutes ago.
2 MR. HEINER: No. But I'm including
3 Mr. Houck's segment.
4 MR. BOIES: Let me see if I can bring
5 it to a close because I don't think this should be as
6 difficult as it appears to have become. And let me
7 see if I can identify what I think we're in agreement
8 on.
9 Q This statement was published in The
10 Financial Times; correct?
11 A I think it was.
12 Q You have said that statements that have
13 been published about Microsoft by its competitors do
14 not, in your view, adversely affect Microsoft's
15 business; correct?
16 A Yeah. I've said that other factors
17 like what happens with products or other observers
18 less directly involved in my view explain whatever
19 change in our business prospects happen.
20 Q Now, my question is whether you believe
21 that that is true for Netscape as well; that is, that
22 statements about Netscape by its competitors,
23 including Microsoft, do not affect Netscape's
24 business prospects.
25 A Well, I think it's pretty hard -- you
193 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 know, you don't have a world where you can say hold
2 everything else the same: the analysts' comments,
3 what happens with products and just take out one
4 thing. So your whole notion here that I'm supposed
5 to ascribe to you as certain cause-and-effect
6 relationships is really quite absurd.
7 Q Well, let me ask you a question,
8 Mr. Gates: Do you have any doubt that the
9 publication of this statement attributed to you in
10 The Financial Times adversely affected Netscape's
11 business prospects?
12 A In the world I live in people look to
13 unbiased observers to judge things about products and
14 financial prospects and things of that nature. But
15 we're not going to be able to run the experiment of
16 keeping everything the same and having the world with
17 some statement and the world without some statement
18 and determine the ultimate cause and effect.
19 Q Would you read the question back,
20 please.
21 (The following question was read:
22 "Q Do you have any doubt
23 that the publication of this
24 statement attributed to you in The
25 Financial Times adversely affected
194 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Netscape's business prospects?")
2 Q BY MR. BOIES: May I have an answer to
3 that question, please, sir?
4 A I told you before I'm not aware of any
5 effect on Netscape's business prospects by that
6 statement.
7 Q My question right now is whether you
8 have any doubt that there were such effects; that is,
9 do you have any doubt that regardless of whether you
10 can identify them as you sit here now and tell me
11 what they are, do you have any doubt that your being
12 said to have said these words hurt Netscape's
13 business prospects?
14 A I think while we can't run the
15 experiment that held everything else the same, that
16 is, the comments of analysts, the quality of the
17 products, all those things going on, and didn't have
18 that comment published, that their business prospects
19 would have been the same. That's my belief, but we
20 don't get to run that experiment.
21 Q Do you believe that the publication of
22 statements like this by you or statements like this
23 attributed to you affected what analysts wrote about
24 Netscape?
25 A Analysts do their own thinking and come
195 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 to their own conclusions. They might look at
2 statements in order to consider various hypotheses.
3 But they're particularly good at ignoring statements
4 made about one company who's competing with another
5 company.
6 Q Does that mean that it's your testimony
7 that you believe that analysts analyzing Netscape
8 would have ignored this statement attributed to you?
9 A No. I didn't say that. I said it
10 might get them to consider. I said the opposite. In
11 fact, I said it might get to consider certain
12 hypotheses, but they would do their own thinking and
13 come to their own conclusions based on factors
14 completely independent of that. They're in the
15 business of talking about objective analysis.
16 Q Is one of the objective analysis that
17 they're in the prospect or business of doing -- is
18 figuring out what the effect on Netscape is going to
19 be if certain actions that Microsoft takes?
20 A A financial analyst who's assigned to
21 Netscape would have that as one of the things they
22 would do.
23 Q And did you in 1996 make a conscious
24 effort to try to affect what financial analysts
25 analyzing Netscape did and thought?
196 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A I personally didn't, no.
2 Q Did Microsoft?
3 A Microsoft, I'm sure, made analysts
4 aware of what we were doing with our products
5 including the innovative work we were doing. And I'm
6 sure that had an effect.
7 Q Did you or others at Microsoft, to your
8 knowledge, do things with the purpose of affecting
9 what analysts analyzing Netscape wrote or thought?
10 A Well, our primary focus is going out
11 and talking about our products and what they do for
12 customers. If the customer or the analyst asks us a
13 question about Netscape or asks for a comparison,
14 it's not unusual to give them an answer.
15 Q Did you or, to your knowledge, others
16 at Microsoft do things for the purpose of affecting
17 what analysts analyzing Netscape wrote or thought?
18 A We certainly let people know about the
19 good work we were doing. The primary purpose of that
20 wasn't to affect Netscape, but certainly one of its
21 effects would have been to affect how they viewed the
22 competition between Microsoft and Netscape.
23 Q In addition to talking about your good
24 works, was one of the purposes of talking about
25 giving away Internet software for free to affect the
197 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 way analysts looked at Netscape?
2 A Well, I doubt you can ascribe too much
3 effect purely to the talking about it.
4 Q I would certainly agree that the fact
5 that you did it and talked about it was a lot more
6 effective than just talking about it. But right now
7 I am focusing on the talking about it.
8 A That's again one of these experiments
9 we can't run where you say what if we refuse to
10 answer all questions about Netscape but we did what
11 we did. My view is that the work and the products
12 and everything, that the talking is not the key
13 element in how our business prospects or other
14 people's involved.
15 Q Now, you knew that giving it away for
16 free was going to adversely affect Netscape's
17 business, didn't you?
18 MR. HEINER: Objection. Objection.
19 THE WITNESS: Well, what are you
20 talking about? Is there -- have you got some
21 antecedent to the word "it"?
22 Q BY MR. BOIES: Is the question unclear
23 to you, sir?
24 A Yes, sir. You never defined what
25 you're talking about.
198 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Okay. If the question is unclear to
2 you, I think that's an answer that I would just as
3 soon have the record have.
4 MR. HEINER: Which it does. Is this a
5 logical stopping point? I objected on that basis, he
6 objected on that basis. So it's crystal clear that
7 the question was unclear because the word "it" was
8 not defined.
9 MR. BOIES: I think what "it" is is
10 pretty well-defined in this litigation. I think the
11 witness knows perfectly well what "it" is.
12 MR. HEINER: No. I would not let a
13 witness answer that question under any circumstances.
14 MR. BOIES: Okay.
15 Q Do you think, Mr. Gates, that
16 Microsoft's giving away of its Internet Explorer
17 browser for free adversely affected Netscape's
18 business?
19 MR. HEINER: Objection. Lack of
20 foundation.
21 THE WITNESS: Well, as I've said
22 earlier, we don't give away all the aspects of the
23 browser. We do let Windows users have the browsing
24 functionality as part of Windows. But we derive
25 significant revenue from things like the Search
199 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 button and the Home Page.
2 Q BY MR. BOIES: Have you told people
3 that Microsoft was going to give the browser away for
4 free and that indeed it would be forever free?
5 A I said that it would be a feature of
6 Windows and available to people who used Windows. In
7 that sense, yes.
8 Q Well, you may have said that. But what
9 I'm now asking you about is whether you also said
10 that Microsoft was going to give the browser away for
11 free and that it would be forever free.
12 Did you say that, sir?
13 A When I was talking about Windows and
14 the future of Windows, I did say that was one of the
15 features that would come in Windows at no extra
16 charge and that it wouldn't become an extra charge
17 feature.
18 Q You may very well have said that, and I
19 accept that you said that. But my question to you,
20 sir, is whether you said that Microsoft was going to
21 give the browser away for free and it would be
22 forever free.
23 Did you say that, sir?
24 MR. HEINER: Asked and answered.
25 THE WITNESS: I don't know why -- what
200 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 distinction you're drawing.
2 Q BY MR. BOIES: I'm talking about the
3 statement.
4 A The word "the browser" when I talked
5 about it being free and forever free was talking
6 about the browser functionality of Windows.
7 Q Okay.
8 But when you talked about it, you used
9 the word "browser" not "browser functionality";
10 correct, sir?
11 A I don't remember the exact words. It's
12 very possible I used that shorthand.
13 Q And you talked about the browser being
14 forever free, did you not, sir?
15 A Are you asking me about exact words?
16 Q Yes. I'm asking you about the exact
17 words.
18 A Or are you asking me to explain what I
19 said?
20 Q I'm asking you about the exact words.
21 Did you say the exact words that the
22 browser was going to be forever free?
23 A If you're asking me about exact words,
24 I don't recall the exact words that were used.
25 Q Is it your testimony that you do not,
201 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 as you sit here now, recall saying that the browser
2 would be forever free?
3 A Those exact words?
4 Q Those exact words.
5 A I would want to see the context and be
6 reminded about that. I don't remember using those
7 exact words.
8 Q Okay.
9 Do you remember using the words
10 "forever free," those exact words?
11 A Those two words?
12 Q Yes.
13 A I'm sure I used those before I was five
14 years old.
15 Q Really? With respect to what?
16 A Forever free. I wanted to be forever
17 free.
18 Q All right.
19 Did you ever use those with respect to
20 the browser?
21 A If you're asking is there a sentence
22 that if you did a string search would have exactly
23 those words in it, I'm not sure. I did say that we
24 would keep -- I did deliver that intent; that is,
25 that the browsing functionality in Windows was not
202 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 something that we intended at some time in the future
2 to charge extra for.
3 Q And what you're telling me is you don't
4 remember whether you just used the words "forever
5 free"? That's what you're saying?
6 A I may have.
7 Q You may have?
8 A The general notion of the Windows
9 browser functionality staying free in the future was
10 certainly communicated by me.
11 Q Okay. Thank you.
12 MR. HEINER: Let's take a break.
13 THE VIDEOGRAPHER: The time is 4:07.
14 We're going off the record. This is the end of Tape
15 3 of the videotaped deposition of Bill Gates.
16 (Recess.)
17 THE VIDEOGRAPHER: The time is 4:22.
18 We're going back on the record. This is Tape 4 of
19 the videotaped deposition of Bill Gates.
20 Q BY MR. BOIES: Mr. Gates, before the
21 break we were talking about certain statements
22 attributed to you in Exhibits 355, 356, and 364.
23 Did you ever contact any of the
24 publications involved with those exhibits and
25 complain that they had misquoted you in any way?
203 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A You mean the two quotes?
2 Q Well, I'm actually talking about three
3 quotes.
4 A No. One is a pure subset of the other;
5 right?
6 Q Well, you obviously have a precise view
7 of what you mean by "subset." But let me be
8 absolutely clear of what I'm talking about, okay?
9 And let me go through it chronologically.
10 A Do you want to read it again?
11 Q On June 10, 1996, in a document that
12 had been marked as Exhibit 364, The Financial Times
13 attributed to you a quotation, quote,
14 "'Our business model works
15 even if all Internet software is
16 free,' close quote, says Mr. Gates.
17 'We're still selling operating
18 systems. What does Netscape's
19 business model look like if that
20 happens? Not very good,'" close
21 quote.
22 Did you ever contact either the
23 reporter for The Financial Times who interviewed you
24 or The Financial Times to assert that they had
25 misquoted you in any way?
204 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A No.
2 Q On July 3, 1996 The Financial Times
3 published what I think you refer to as a subset of
4 that quote: Quote,
5 "'Our business model works
6 even if all Internet software is
7 free,' close quote, says Mr. Gates.
8 Quote, 'We are still selling
9 operating systems,'" close quote.
10 And then added not in quotes the
11 statement, "Netscape in contrast is
12 dependent on its Internet software
13 for profits he points out."
14 Did you ever contact either the
15 reporter or The Financial Times to assert that either
16 they had misquoted you or that the textural assertion
17 about what you said was inaccurate in any way?
18 A No.
19 Q The third is Exhibit 356, which is a
20 Business Week publication dated July 15, 1996, that
21 includes the statement, quote,
22 "'One thing to remember
23 about Microsoft,' close quote, says
24 Chairman William H. Gates III, quote,
25 'We don't need to make any revenue
205 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 from Internet software,'" close
2 quote.
3 Did you ever contact either the
4 reporter, who I recognize you say did not interview
5 you, or Business Week to assert that that quote was
6 in any way inaccurate?
7 A Well, I told you I've never talked to
8 that reporter nor did I contact Business Week.
9 Q In 1996 did you believe that Netscape
10 posed a serious threat to Microsoft?
11 A They were one of our competitors.
12 Q Were they a serious competitor in your
13 view, sir?
14 A Yes.
15 Q Did you believe that Netscape's browser
16 was a serious threat to your -- that is
17 Microsoft's -- operating system's business?
18 A Well, you have to think about what work
19 we were going to do to improve our software and then
20 what Netscape and others were going to do to improve
21 their software. You can't just look at it
22 statically. It's more the work than -- the new
23 things you do than the history.
24 Q Did you believe that by 1996, that
25 Netscape and Netscape's Internet browser was a
206 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 serious alternative platform to the platform
2 represented by Microsoft's Windows operating system?
3 A Well, as was articulated by Marc
4 Andreessen and other people from Netscape, if we
5 didn't do new product work, that was a very likely
6 outcome.
7 Q What was a very likely outcome?
8 A That the value of the Windows platform
9 would be greatly reduced.
10 Q Did you believe that it was in
11 Microsoft's interest to convince financial analysts
12 that Netscape was not going to be financially viable?
13 A I never had a goal to do that, and my
14 only comments about Netscape's business would have
15 come in response to direct questions about that topic
16 from reporters.
17 Q Well, let me ask you to look at what
18 has been previously marked as Exhibit 354, which is a
19 memorandum from you in May of 1996. And the last
20 paragraph begins, quote,
21 "At some point financial
22 minded analysts will begin to
23 consider how much of a revenue stream
24 Netscape will be able to generate,"
25 close quote.
207 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Why was that important to you in this
2 internal memorandum which, obviously, is not
3 something which you're merely responding to a
4 reporter's inquiry, but it is something that is
5 involved in your internal deliberations within
6 Microsoft.
7 A Who said it was important? It doesn't
8 say -- I mean, it's one of many sentences in the
9 memo.
10 Q Is it your testimony that this is an
11 unimportant sentence, sir?
12 A I don't think it's any more important
13 than any of the other sentences in here.
14 Q Is it any less important that any of
15 the other sentences?
16 A Yeah. It's not germane to the primary
17 topic of the memo.
18 Q If it wasn't germane to the primary
19 topic of the memo and if it wasn't particularly
20 important, why did you include it, Mr. Gates?
21 A It's merely an observation that I put
22 into this rather extensive memo that talks about our
23 plans in doing innovative products, and it's tacked
24 on as the last paragraph. And you didn't read the
25 whole paragraph, but it says "at some point." So it
208 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 seems to be a prediction about that.
2 Q Yes, I agree, it seems to be a
3 prediction. And I think I did read the "at some
4 point."
5 But my point to you is this is a
6 memorandum that you were sending to a number of the
7 top executives of Microsoft; correct, sir?
8 A All product people.
9 Q Well, let's see. We have Mr. Ballmer.
10 A It's not to him.
11 Q He's getting a copy?
12 A That's right.
13 Q Okay.
14 And what was Mr. Ballmer's position in
15 May of 1996?
16 A Executive vice president.
17 Q How many executive vice presidents did
18 Microsoft have at that time?
19 A One, two, three, four.
20 Q And who were the others?
21 A Bob Herbold, Pete Higgins and Paul
22 Maritz -- no, no, no. Maybe -- no, I think it's just
23 four.
24 Q So that this memorandum went to all
25 four of the executive vice presidents; correct, sir?
209 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A It went to Paul Maritz. It was copied
2 to the other people there.
3 Q It was either addressed or copied to
4 all four of the executive vice presidents?
5 A They're among the recipients, yes.
6 Q Let's go through who the other
7 recipients are.
8 It is addressed to executive vice
9 president Paul Maritz. And below you at this time
10 was executive vice president the highest position in
11 the company?
12 A Yes.
13 Q And beneath executive vice presidents,
14 what was the next level?
15 A Senior vice presidents.
16 Q And how many senior vice presidents
17 were there?
18 A I couldn't tell you. I could -- we
19 could do the range thing if you want.
20 Q Okay. That would be good.
21 A About three to nine.
22 Q Okay.
23 Can you be any more --
24 A I'd say six to nine.
25 Q Okay. Let's go through the people who
210 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 got this memo. It's addressed to executive vice
2 president Paul Maritz.
3 A Actually, his name is misspelled, but
4 yes.
5 Q What was Brad Silverberg's position?
6 A I think he was a senior vice president,
7 but he worked for Paul and did a lot of the
8 development of software that went into Windows.
9 Q And he was one of the addressees of
10 this memo?
11 A That's right. It goes Maritz, and then
12 he's the second person on the "To" line.
13 Q And the third person to whom it's
14 addressed is Jim Allchin; is that correct?
15 A That's right.
16 Q What was his position?
17 A Senior vice president of the core
18 Windows development.
19 Q And the next person to whom it's
20 addressed is Brad Chase. And what is his position?
21 A At that time or at this time?
22 Q At that time.
23 A At that time he worked for Brad
24 Silverberg managing our relationships with ISVs
25 broadly defined and some of the marketing activities.
211 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Did he have a position like vice
2 president?
3 A Oh, I'm sorry. He was a vice
4 president.
5 Q The next person to whom it's addressed
6 is Rich Tong.
7 A He was a vice president with an
8 analogous person to Brad Chase but working for Jim
9 Allchin.
10 Q And the next person is John Ludwig.
11 A He was a -- I'm pretty sure he was a
12 vice president at this time working for Brad
13 Silverberg.
14 Q Now, copies of the memo go to executive
15 vice presidents Ballmer, Herbold and Higgins; is that
16 correct?
17 A If I've got those titles right.
18 Actually, now that I think about it, I think Paul and
19 Pete were actually called group vice presidents.
20 And -- yeah, they're called group vice presidents,
21 which maybe nobody but me knows this, but actually
22 numerically that's one number lower than executive
23 vice president.
24 Q Okay. We'll keep this highly
25 confidential.
212 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 And then it goes to a variety of other
2 people that, I assume, hold at least in the main
3 significant positions in the company; is that fair?
4 A No.
5 Q Okay. Then let's go through them.
6 The copies are Steve Ballmer, he was an
7 executive vice president?
8 A Yeah. If you want, I'll just go
9 through it.
10 Q Okay. That would be great.
11 A Herbold, executive vice president; Jeff
12 Raikes, senior vice president of -- involved in U.S.
13 activities working for Steve; Bernard, who at the
14 time ran some of the sales in Europe working for
15 Steve; Joachim --
16 Q And if you could just give his title?
17 A Bernard actually had an exciting title.
18 He was the chairman of Europe and also senior vice
19 president. But he liked -- on his card he carried
20 the one that said Chairman of Europe.
21 Joachim Kempin, senior vice president;
22 Pete Higgins, group vice president; Nathan --
23 Nathan's also a group vice president at this time, I
24 think. Aaron is a --
25 Q You need to give the full name just for
213 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 the record.
2 A I'm sorry. Aaron Contorer is an
3 assistant; Steve Sinofsky was an assistant.
4 Actually, I don't know which of those was an
5 assistant working for me at the time. And Ben Slivka
6 and Chris Jones were two developers.
7 Q When you say they were assistants, they
8 were assistants to you?
9 A Yeah.
10 Q Is it fair to say that you meant this
11 memorandum to be taken seriously by the people to
12 whom it was sent?
13 A No more seriously than other e-mail and
14 memorandums I sent them, but yes, seriously.
15 Q Well, now, again, because I know that
16 you're very precise in your use of words, you've
17 drawn distinctions before between e-mails and
18 memoranda; correct, sir?
19 A That's right.
20 Q If fact, you did so today several times
21 when you were being questioned; correct, sir?
22 A I drew a distinction between e-mail
23 being called memoranda.
24 Q You didn't like e-mails being called
25 memoranda because you thought e-mails didn't rise to
214 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 the level of memoranda; is that right?
2 A I didn't suggest a hierarchy, I just
3 suggested a distinction.
4 Q Is there a hierarchy in your mind?
5 A No. But there's a distinction.
6 Q Are memoranda more formal and more
7 serious than e-mails?
8 A No. I'd say they're longer and more
9 thoughtful than most e-mail.
10 Q Now, what we're looking at here is one
11 of the longer more thoughtful documents, that is, a
12 memorandum; correct?
13 A Right.
14 Q And in that longer more thoughtful
15 memorandum in the final paragraph you write,
16 "At some point financial
17 minded analysts will begin to
18 consider how much of a revenue stream
19 Netscape will be able to generate."
20 Now, what was the significance of that
21 to you at the time, sir?
22 A It was a fact that I stated in the
23 memo.
24 Q Well, it clearly is a fact that you
25 state in the memo. But my question to you, sir, is:
215 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 What was the significance to you of that fact?
2 A I'm not sure what you mean by that.
3 Q In 1996 at the time that you wrote this
4 memorandum, what was the significance to you of the
5 fact that, quote,
6 "At some point financial
7 minded analysts will begin to
8 consider how much of a revenue stream
9 Netscape will be able to generate"?
10 A I think it must have referred to the
11 fact that Netscape was at this point a public
12 company.
13 Q And can you explain what you mean by
14 that?
15 A Well, usually you don't have financial
16 analysts for private companies.
17 Q I'm not sure I understand your answer.
18 In this memorandum you say,
19 "At some point financial
20 minded analysts will begin to
21 consider how much of a revenue stream
22 Netscape will be able to generate."
23 What is the significance of that fact
24 to you, or what was the significance of that fact to
25 you in 1996?
216 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A Well, I can't reconstruct my state of
2 mind in 1996. But I think it's a fact of almost no
3 significance at all.
4 Q Why would you have put a fact that you
5 say has no significance at all?
6 A I didn't say that.
7 Q What did you say?
8 A I said almost.
9 Q Almost no significance at all.
10 Why would you put a fact that,
11 according to you, had almost no significance at all
12 in what you have described as this longer, more
13 thoughtful memorandum to what looks to me to be like
14 most of the very top executives of your company?
15 A I wrote a memo about our products and
16 some of the good things we were doing in our
17 products. I think you can point to a lot of
18 different sentences in here and try and drill in on
19 it and overstate its -- the significance of an
20 individual sentence.
21 Q And I am, as you say, I'm drilling in
22 on this particular sentence. But what I'm asking you
23 is if this particular sentence has, as you put it,
24 almost no significance at all, why would you put it
25 in this memorandum that you describe as one of the
217 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 longer, more thoughtful type of communications within
2 your company addressed to the very top executives of
3 your company?
4 A I write lots of things that we would
5 call memoranda. And I'm sure we can pick a lot of
6 sentences in a lot of my memoranda, and you can say
7 to me, "Isn't it awful that that sentence doesn't
8 have more significance," and I'll say, "Fine.
9 That -- you know, I don't require that every sentence
10 in every memoranda I write have deep significance."
11 Q Does that complete your answer to my
12 question?
13 A Yes.
14 Q In 1996, regardless of what
15 significance you attribute to this particular
16 sentence, was it significant to you how financial
17 analysts viewed Netscape?
18 A Well, the thing -- that's not what we
19 thought about when we thought about the competition
20 with Netscape or the emerging demands for Internet
21 capabilities coming from our customers.
22 Q My question to you, sir, was: Did it
23 matter to you what financial analysts thought of
24 Netscape?
25 A I'm sure there were people here who
218 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 read what the financial analysts wrote, or some of
2 them, in order to learn more about Netscape.
3 Q Yes. I will accept that that is so.
4 A So we would learn from them.
5 Q Was it significant to you what they
6 thought not for the purpose of learning things from
7 them, but was it significant to you what they thought
8 about Netscape? And just to be clear, because I know
9 you're very precise with words, was it significant to
10 you what financial analysts thought about Netscape?
11 A Well, I'd say the thing -- I'd say if
12 we're trying to say what is -- rank things in terms
13 of significance, I'd say that would be about the most
14 insignificant thing I can think of.
15 Q Did you ever tell anybody within
16 Microsoft that you thought it was important what
17 financial analysts thought about Netscape?
18 A No. I don't think I've ever said
19 anything like that.
20 Q Not in words or in substance?
21 A Well, you keep trying to draw the
22 distinction. I did think it was important for us to
23 learn about Netscape from different sources, and
24 analysts would have been one of those sources. And
25 somehow you've -- you've thrown that away, the fact
219 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 that that was a source of learning.
2 Q I didn't mean to throw it away. I'm
3 simply focusing on a different issue.
4 A How can you separate out the two
5 issues?
6 Q Let me try to be clear. Perhaps my
7 question has not been clear, and I need to be clearer
8 about it.
9 In 1996, did you want, desire,
10 financial analysts to have a poor or pessimistic or
11 negative view about Netscape?
12 A Well, as we, during 1996, were
13 improving our product and demoing our products and
14 talking about what we thought customers were
15 interested in, there were several elements of
16 feedback that we'd get including what customers were
17 saying about our Internet strategy and our Internet
18 products, and the analysts, likewise, were a form of
19 feedback. And so they were saying -- or customers
20 were saying, jeez, we think your efforts aren't what
21 customers want and we think Netscape or some other
22 company has a strong strategy that matches what they
23 want, that would be a piece of feedback to us to go
24 back and work on aspects of our software products.
25 So in that sense we were interested
220 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 because it might help us see where we were in terms
2 of meeting those customer needs.
3 Q Let me try again.
4 My question does not relate to what you
5 wanted to learn from financial analysts, my question
6 is whether you wanted to affect what financial
7 analysts thought to make financial analysts think in
8 a negative or pessimistic way about Netscape. Did
9 you want that, sir, in 1996?
10 A Well, in order to get feedback from
11 customers and analysts, we would show them our
12 products, demonstrate them or show the ones we were
13 shipping. And we felt, you know, showing customers
14 or demonstrating what we were doing to them or
15 analysts was a valuable way to benchmark where we
16 were. And so if their response was, "Wow, that's so
17 incredible, that's the best thing I've seen," then
18 that was a valuable piece of feedback. Or if they
19 said, "That's quite inferior," that was a valuable
20 piece of feedback. And so in that sense it was
21 useful.
22 Q Let me try to see if I can clarify my
23 question because I may not be being clear.
24 First, I'm not talking about customers
25 now, I'm talking about financial analysts. Second,
221 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 I'm not talking about your desire to get feedback
2 about your products. What I'm talking about is
3 whether you wanted to make financial analysts feel
4 negative or pessimistic about Netscape's business
5 prospects.
6 Did you want that in 1996?
7 A I don't have any control over what
8 analysts think. As far as I know, they -- they take
9 the facts about the products and they go out and talk
10 to customers and look at what's going on in order to
11 form their opinions. So it seems like a really
12 bizarre question. They do their own thinking and
13 form their own opinion. They might meet with
14 Microsoft to get our view on what we're doing in
15 products and how customers are responding to that.
16 I personally basically don't meet with
17 financial analysts or talk with financial analysts
18 with the sole exception of the once-a-year analysts
19 day that Microsoft has had.
20 Q My question, sir, is what you wanted to
21 accomplish with financial analysts. It's not about
22 whether you did it personally or whether Microsoft
23 did it with somebody else. It is what you wanted to
24 accomplish.
25 And what I'm asking you is: Did you
222 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 want to bring about a state of affairs where
2 financial analysts developed a negative or
3 pessimistic view about Netscape's business prospects?
4 A Our focus was doing great software
5 products. And that focus might have had the indirect
6 effect of influencing those people's opinion. But
7 our focus was building those products and getting
8 feedback to guide us in doing a good job in building
9 those products.
10 Q Now, my question now is not about what
11 your focus was and it's not about indirect effects,
12 it is about what you wanted, it is about your intent,
13 it is about what you were trying to accomplish.
14 Were you in 1996 trying to get
15 financial analysts to develop a more negative and
16 more pessimistic view about Netscape's business
17 prospects?
18 A Except through the indirect effect of
19 them seeing how customers received our products and
20 our product strategies, that was not a goal.
21 Q If that was not a goal, sir, why did
22 you say in substance that the Internet browser would
23 be forever free?
24 A That was a statement made so that
25 customers could understand what our intent was in
223 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 terms of that set of technologies and how it would be
2 a part of Windows and not an extra cost item, and so
3 people would have that information in making their
4 decisions about working with us on Windows.
5 Q Now, is it your testimony that when
6 Microsoft told the world that its browser would be
7 forever free, that the desire to affect financial
8 analysts' view of Netscape played no role in that
9 decision?
10 A I can be very clear with you. The
11 reason we told people that it would be forever free
12 was because that was the truth. That's why we told
13 them that, because it was the truth.
14 Q Now, Mr. Gates, my question to you --
15 A That's the sole reason we told them.
16 Q And my question to you is whether or
17 not the truth was, in part, due to your desire to
18 adversely affect financial analysts' view of
19 Netscape. Did that play any role, sir?
20 A You've been asking me a question
21 several times about why did we say something. We
22 said it because we thought our customers would want
23 to know and because it was the truth. And that
24 explains our saying it completely.
25 Q And what I'm asking you, sir -- and it
224 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 may be that the answer to my question is, "no, it
2 played no role." But if that's your answer, I want
3 to get it on the record. And my question --
4 A Are you talking about saying it?
5 Q Yes.
6 A Or how we came up with our decision
7 about how to price our products?
8 Q Let's take it each step at a time, one
9 step at a time, so that your counsel doesn't say I'm
10 asking you a compound question, okay? And first
11 let's talk about saying it.
12 I know you're telling me it was the
13 truth. In addition to it being the truth, did the
14 fact that this would, in your view, adversely affect
15 the view of financial analysts of Netscape play any
16 role at all in your decision to announce that your
17 browser would be forever free?
18 A I actually think that came up in
19 response to some questions that people asked in an
20 event we had on December 7, 1995. So it wasn't so
21 much a question of our saying, okay, we're going to
22 go make this a headline, but rather, that there were
23 questions that came up during that including our
24 future pricing plans.
25 Q This was a meeting on December 7 of
225 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 what year?
2 A 1995.
3 Q And was it attended by people outside
4 Microsoft?
5 A It was a press event.
6 Q And prior to attending that press
7 event, had you made a decision that it would be
8 forever free?
9 A Well, if you really want to probe into
10 that, you'll have to get into the different ways that
11 we made Internet technology available.
12 In terms of what we were doing with
13 Windows 95 and its successors, yes. In terms of some
14 of the other ways that we offered the Internet
15 technologies, there was some -- there hadn't been a
16 clear decision about that.
17 Q When you refer to other ways that you
18 offer Internet technologies, would you explain for
19 the record what you mean?
20 A Oh, we created an offering that ran on
21 the Macintosh OS that offered some but not all of the
22 capabilities that we put into Windows and used a
23 common branding for that. And we came up with a
24 package that ran on a previous version of Windows,
25 Windows 3.1, and made an offering of that.
226 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Subsequently I mean, not on that day, but
2 subsequently.
3 Q And those were charged for; is that
4 what you're saying?
5 A I'm saying that before the December 7th
6 event, it was clear to everyone that in the Windows
7 95 and its successors, that the browser technology
8 would be free for those users. But it was unclear to
9 people what we were going to do with the other ways
10 that we packaged up the technologies.
11 Q Would you read the question back,
12 please?
13 (The following question was read:
14 "Q And those were charged
15 for; is that what you're saying?")
16 THE WITNESS: Well, they weren't
17 available. So if we're talking about December 7,
18 1995, it's not a meaningful question.
19 Subsequently those products were made
20 available to the customers without charge. But I'm
21 saying that there was some lack of clarity inside
22 Microsoft even up to the event itself about what we
23 were going to do with those other ways we were
24 providing Internet Explorer technology.
25 Q BY MR. BOIES: Uncertainty as to
227 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 whether you would charge for them; is that what
2 you're saying?
3 A That's right.
4 Q Okay.
5 Prior to the December 7, 1995 meeting,
6 had a decision been made to advise the world that not
7 only would the browser be free, but it would be
8 forever free?
9 A Well, it's always been the case that
10 when we put a feature into Windows, that it remains
11 part of Windows and doesn't become an extra cost
12 item. So it would have been kind of a silly thing
13 for anyone to ask including about that particular
14 feature. And by this time, of course, browsing is
15 shipping with Windows 95.
16 Q Exactly sort of the point I wanted to
17 come to, Mr. Gates.
18 When you put things into the operating
19 system generally, you don't announce that they're
20 going to be forever free, do you?
21 A Yes, we do. If anybody --
22 Q You do?
23 A If anybody asks, that's obviously the
24 answer we give.
25 Q Have you finished your answer?
228 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A Yes.
2 Q Okay.
3 Could you identify for me the products
4 other than browsers that Microsoft has announced that
5 they would be forever free, expressly said, "These
6 are going to be forever free"?
7 A As I said to you, I think that actually
8 came up only in response to some questions. So it's
9 not proper to ask me and suggest that we announced it
10 like it was some, you know, press release
11 announcement or something of that nature.
12 Q Well, let me come back to that aspect
13 of it and just ask you for the present. What
14 products has Microsoft said publicly, whether in
15 response to a question or otherwise, that these would
16 explicitly be forever free?
17 A I've said that about the broad feature
18 set that's in Windows.
19 Q When did you say that, sir?
20 A I remember an analyst talking to me
21 about that once at an analyst meeting.
22 Q When was that?
23 A It would have been one of our annual
24 analysts meetings.
25 Q When?
229 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A Not this year. Either last year or the
2 year before.
3 Q Is there a transcript of that analyst
4 meeting?
5 A Not with the conversation with that
6 analyst, no.
7 Q There are transcripts of analysts
8 meetings, aren't there, Mr. Gates?
9 A Only of the formal Q and A, not of
10 the -- most of the Q and A, which is where people are
11 mixing around with the press and analysts who come to
12 the event.
13 Q And this question that you say happened
14 happened after the transcript stopped being taken; is
15 that what you're saying?
16 A That's my recollection, yes.
17 MR. BOIES: We'd like to be sure that
18 if those transcripts have not been produced, that
19 they be produced.
20 MR. HEINER: Well, serve a document
21 request and we'll respond in the ordinary course.
22 MR. BOIES: Okay. If that's what's
23 required, we'll do that. We'll see if we can get you
24 a request faxed down. I would have thought it would
25 have been easier for you to take that under
230 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 advisement, but we'll proceed that way.
2 MR. HEINER: It is a nonsensical
3 request because the testimony is that it's a cocktail
4 hour, and at a cocktail hour there's no transcript.
5 That's the testimony.
6 Q BY MR. BOIES: Is that the testimony,
7 this happened in a cocktail hour?
8 A I'm saying, yeah, in the informal Q and
9 A, not the formal Q and A.
10 Q This was at the cocktail hour?
11 A Or a dinner or a lunch.
12 Q Well, which was it?
13 A I'm certain that it was in the informal
14 part of the Q and A. Exactly was it on the way to
15 the bathroom or the cookie table or the dinner or the
16 cocktail hour, I can't say.
17 Q Sir, sometime on the way to the
18 bathroom or cookie table or the cocktail hour --
19 A Or lunch or dinner.
20 Q -- or lunch or dinner, some analyst,
21 whose name you do not recall, asked you a question.
22 Is that what your testimony is?
23 A Yes.
24 Q And what was that question?
25 A They asked about were there parts of
231 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Windows that would become separate products and we'd
2 charge separately for in the future.
3 Q And what did you say?
4 A I said, "No."
5 Q Other than this conversation that you
6 say took place on the way to the bathroom or the
7 cookie table or a cocktail party or lunch or dinner,
8 was there ever any other time that Microsoft publicly
9 explicitly asserted that something would be forever
10 free?
11 A I'm sure that if anybody ever asked
12 about an operating system feature, we would have made
13 that clear to them. I don't -- beyond the one I've
14 talked about, I don't -- I don't recall that.
15 Then, again, you know, in the case of
16 the browser you have the case where another company
17 had -- it had been free and so, you know, the fact
18 that people were asking about that feature in some
19 ways is not surprising.
20 Q Well, you say another company had a
21 browser that had been free. What company was that,
22 sir?
23 A Well, certainly Mosaic was free. And
24 there are a number of other free browsers. The
25 Netscape browser in its early days was also free.
232 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q In 1996 was the Netscape browser free?
2 A I'm not sure of the exact chronology.
3 But I'm pretty sure that in 1996 anybody who wanted
4 to use the Netscape browser could download and use it
5 in any way they would want without Netscape coming
6 and asking them to pay them.
7 Q Mr. Gates, in 1996 what was Mosaic's
8 market share?
9 A I don't know.
10 Q Approximately?
11 A I really don't know.
12 Q Can you give me any estimate or range?
13 A By 1996, probably under 10 percent.
14 Q Under 5 percent?
15 A Well, now you're going to have to
16 answer what the word "Mosaic" means. For example, if
17 you get low enough, get really low, we're going to
18 get into Internet Explorer. Internet Explorer, until
19 we shipped IE3, actually had quite a bit of code in
20 it that derived from Mosaic; that is, the code went
21 from University of Illinois to Spyglass to our
22 development team who used some of that code in
23 creating both IE1 and IE2. So if you get low enough,
24 I'll have to ask you do you consider IE1 or IE2 a
25 form of Mosaic?
233 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q Not for purposes of this question, if
2 it will help you.
3 A Okay. Then you can get down below 5.
4 Q Okay.
5 In 1996 Netscape was charging OEMs who
6 it licensed to distribute its browser; correct, sir?
7 A I don't know that.
8 Q Do you know one way or the other?
9 A I think they were charging some, but
10 I'm not sure they were charging all.
11 Q Did you ever try to find out?
12 A I know we were always unclear what the
13 nature of those deals were.
14 Q Okay.
15 Did you ever try to find out how much
16 of Netscape's revenue came from charging for the
17 browser?
18 A Well, we, from time to time, looked at
19 the revenue of broad sets of competitors. And so I'm
20 sure at some point when we did -- the people in the
21 company, not me, but when people did analysis of
22 Netscape, that's one of the issues they would have
23 looked at.
24 Q Did anyone ever inform you of
25 approximately how much of Netscape's revenue was
234 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 accounted for charging for the browser?
2 A I'm sure I was present in a
3 presentation where that was one of hundreds of facts
4 presented to me.
5 Q Do you recall it?
6 A The number? No.
7 Q Or approximately how much of Netscape's
8 revenue was accounted for by charging for the
9 browser.
10 A When we say "charge" -- well, I don't
11 remember the number, so I won't plague you with the
12 question that I always have to ask about that, which
13 is: Which revenue source are you talking about? But
14 even if you tell me, I won't remember the specific
15 number.
16 Q I'm going to ask you whether you
17 remember approximately what the range of the number
18 is. And to be absolutely clear, what I'm talking
19 about is charging for the browser. I'm not talking
20 about advertising revenue, you know, or revenue from
21 the Search button or the Home Page.
22 A But that's charging for the browser. I
23 mean, it's like saying NBC has no revenue.
24 Q No. It's not like saying it has no
25 revenue. It's like saying NBC doesn't charge for its
235 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 programs to the public. It may charge advertisers,
2 and I'm not saying that there might not be
3 advertising revenue. But what I'm talking about is
4 charging for the use of the product, charging OEMs or
5 charging end users who buy it at retail or download
6 it, although I understand that your position is it's
7 downloaded for free. But I'm trying to distinguish
8 between charging for the product and whatever
9 advertising revenue they get.
10 A Okay.
11 Q Now, with respect to charging for the
12 product, charging for the use of the browser, do you
13 have any idea, any approximation or range, of how
14 much of Netscape's revenue was attributed to that?
15 A If you give me a time period, I can
16 narrow it down from the zero to 100 percent range.
17 Q 1996.
18 A Around 20 to 50.
19 Q Today.
20 A Today the advertising revenue from
21 browsers --
22 Q No, not advertising. We're talking
23 about the revenue from the use of the browser, not
24 the advertising. We're just talking about --
25 A I know, that's right. But let me
236 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 complete my sentence.
2 Q Okay.
3 A Today the -- what you would call
4 nonuser revenue sources are very substantial, and,
5 you know, more than cover what people are doing with
6 browser. So that's become the primary revenue source
7 that you get specifically related to the browser.
8 Q Indeed today the amount of Netscape's
9 revenue that's attributed to charging people for the
10 use of the browser is zero; right, sir?
11 A I don't know that.
12 Q Because they don't charge for the
13 browser; right? You know that, don't you?
14 A No, I don't know if, you know, they had
15 some commitment contracts with various people and you
16 can do special things with browsers. And understand,
17 they -- you know, they do lots of different deals
18 that include various special things. And so I don't
19 think it's fair for me to sit here and tell you what
20 Netscape's revenue are from a particular source.
21 If you want to ask me about Microsoft,
22 that would be a different thing. But I'm not an
23 expert on Netscape revenue.
24 Q And so you just don't know, is your
25 answer, as you sit here now?
237 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A Yeah. It may have dropped down to
2 zero. I don't know.
3 Q Okay.
4 Was it part of your intent in taking
5 the actions that Microsoft took to drive that down to
6 zero?
7 MR. HEINER: Objection.
8 THE WITNESS: We price our product,
9 Windows. That's the only thing we do relative to
10 pricing. The most important thing we do is we create
11 the features of the product including improved
12 versions.
13 Q BY MR. BOIES: Let me be sure my
14 question is clear.
15 Was any part of Microsoft's actions
16 with respect to its browser or, as you sometimes
17 refer to it, browser technology, motivated by desire
18 to drive Netscape's revenues from users of Netscape's
19 browser down to zero?
20 A Well, I think you're getting a little
21 bit psychological there.
22 Q No. I'm asking what you intended.
23 What was the purpose of what you were doing?
24 A My purpose was to make Windows a better
25 product and maintain and increase the popularity of
238 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Windows.
2 Q Was that the only purpose?
3 A That was the purpose on which the
4 decision was made.
5 Q I just want to be clear.
6 It's your testimony that an intent to
7 deprive Netscape of revenue played no role in any of
8 the decisions that Microsoft made with respect to
9 browsers or browsing technology? Is that your
10 testimony?
11 A Well, our decision to have the browser
12 be a feature of Windows was in no way motivated by
13 something to do with Netscape. We had chosen that
14 that was a logical evolution of the Windows feature
15 set before Netscape was a factor at all.
16 Q Mr. Gates, if your answer is that it
17 played no role, that is your answer. But I need to
18 get on the record what your answer is.
19 And my question is whether an intent to
20 deprive Netscape of revenue played any role in any of
21 the decisions that Microsoft made with respect to its
22 browser or browsing technology.
23 A We decided that it was a logical
24 improvement of Windows to put the browser into
25 Windows before we had much awareness of there even
239 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 being a Netscape. So the decision that that would be
2 a feature -- and as I've said, when we make something
3 a feature of Windows, that means that it's available
4 along with all the other features and the license
5 fee, that decision had been made very early on.
6 We also had a very early recognition of
7 the potential revenue sources from things like the
8 Search button and the Home Page and that those would
9 become quite substantial.
10 MR. HEINER: Mr. Boies, we're prepared
11 to go right through to 6:00, but we would like to
12 have one more brief break when you come to a logical
13 stopping point. I'm having trouble seeing when the
14 stopping points are. But if you could have one come
15 up soon, I'd appreciate it.
16 MR. BOIES: Okay. Let me just try to
17 get this question answered, and then we'll take a
18 break.
19 Can I have the question back?
20 (The following question was read:
21 "Q Mr. Gates, if your
22 answer is that it played no role,
23 that is your answer. But I need to
24 get on the record what your answer
25 is.
240 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 "And my question is whether
2 an intent to deprive Netscape of
3 revenue played any role in any of the
4 decisions that Microsoft made with
5 respect to its browser or browsing
6 technology.")
7 Q BY MR. BOIES: If your answer's "no,"
8 we'll simply go on. If your answer is "yes," then
9 I'm going to ask what role it was. But I'm just
10 trying as a predicate to find out whether it played
11 any role in any of your decisions.
12 A I don't know what you mean "any of our
13 decisions." Now, that is the vaguest thing I've ever
14 heard.
15 Q Okay. Any of your decisions with
16 respect to the browser or what you have referred to
17 as your browsing technology.
18 A Wait a minute. Have you completely
19 changed the question?
20 Q I don't think so. But let's go back
21 and reread the question.
22 And when you read it this time, type it
23 into the record again so it appears so that a reader
24 of the transcript doesn't have to go back and find
25 it.
241 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 (The following question was read:
2 "Q Mr. Gates, if your
3 answer is that it played no role,
4 that is your answer. But I need to
5 get on the record what your answer
6 is.
7 "And my question is whether
8 an intent to deprive Netscape of
9 revenue played any role in any of the
10 decisions that Microsoft made with
11 respect to its browser or browsing
12 technology.")
13 MR. HEINER: Object to the question as
14 vague and ambiguous on several counts.
15 THE WITNESS: Yeah. It's pretty vague.
16 Let's say we decide --
17 MR. BOIES: This is the same question
18 that we've gone through three times.
19 MR. HEINER: Yeah, I know. I'm only
20 making the objection now.
21 MR. BOIES: Okay.
22 THE WITNESS: Let's say we decide to
23 put a new feature in, is that included in what you're
24 asking about?
25 Q BY MR. BOIES: A new feature in what?
242 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 A In our Internet browser technology.
2 Q If the purpose is to deprive Netscape
3 of revenue, if that's why you put it in, yes, it is
4 included, sir.
5 And if you don't understand the
6 question, if my question is not clear, I will
7 rephrase it. You can tell me the answer is "yes,"
8 you can say the answer is "no," you can say the
9 answer is "I don't recall," you can say "Your
10 question is so confusing to me, I can't answer it."
11 But all I'm trying to do is find out what your answer
12 is.
13 Do you have the question in mind?
14 A I think it's quite a vague question.
15 Let me just give you a hypothetical to understand.
16 Let's say we think users want a
17 feature, and it can be a feature that we're doing
18 first or it's a feature that Netscape has done first.
19 When we decide to put that feature in, our primary
20 goal is to make Windows more popular and build
21 momentum for Windows. But certainly there is --
22 let's say it's a feature that Netscape's done first,
23 then we are thinking, okay, will users be interested
24 in our browser? If it's a feature we've done first,
25 we're thinking will users be interested in our
243 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 browser?
2 So you can't say that, you know, as you
3 get into 1996 that we're unaware of Netscape. And
4 even though what we're primarily doing is related to
5 making better experiences for customers and all that,
6 the fact that we'll be compared with them in terms of
7 how people chose browsers, we're aware of that.
8 Q I didn't mean my question to suggest
9 that you might have been unaware of Netscape in 1996,
10 Mr. Gates. I assume that you were aware of Netscape
11 in 1996.
12 My question is whether an intent to
13 deprive Netscape of revenue played any role in any of
14 the decisions that you made about browsers or
15 browsing technology. I'm not talking about a
16 decision where you say, "I understand this would have
17 an effect on Netscape but I don't care, I'm going to
18 do it anyway." I'm talking about a situation in
19 which, at least in part, you take an action with the
20 intended purpose of depriving Netscape revenue.
21 Did you do that?
22 A Well, the original decision to include
23 the browser into Windows as a feature of Windows was
24 not taken in response to some thinking about
25 Netscape. But once you get out into a period where
244 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 we're looking at Netscape as one of our competitors,
2 it's very hard to say, you know, did that influence
3 our decisions or not. To me that's a very vague
4 question. It's one of the facts we are aware of.
5 Our primary goal, of course, is to make Windows
6 better for customers. And we were doing a lot of
7 great stuff there and were actually very successful
8 once we got past a certain point in doing a product
9 that people did decide to choose.
10 But, you know, how can you -- how can
11 you say, you know, when every person at Microsoft
12 makes any decision -- you know, we don't get to run
13 it where there's no thought about Netscape and there
14 is a thought about Netscape. So you're asking me to
15 reach into people's minds and do something that I
16 think is strange.
17 MR. BOIES: Would you read back my
18 question one more time and again incorporate it?
19 (The following question was read:
20 "Q Mr. Gates, if your
21 answer is that it played no role,
22 that is your answer. But I need to
23 get on the record what your answer
24 is.
25 "And my question is whether
245 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 an intent to deprive Netscape of
2 revenue played any role in any of the
3 decisions that Microsoft made with
4 respect to its browser or browsing
5 technology.")
6 Q BY MR. BOIES: Have you answered that
7 question now to the fullest extent that you can,
8 Mr. Gates? Because if you can't, we'll just stop.
9 A I find the question unclear enough,
10 that I'm afraid I won't be able to do any better than
11 I already have.
12 MR. BOIES: Okay. We can take a break
13 now.
14 THE VIDEOGRAPHER: The time is 5:22.
15 We're going off the record.
16 (Recess.)
17 THE VIDEOGRAPHER: The time is
18 5:36 P.M. We are going back on the record.
19 Q BY MR. BOIES: Mr. Gates, before the
20 break you said that Microsoft recognized early that
21 there would be browser revenue from advertising
22 revenue from the Search button and the Home Page.
23 Do you recall that?
24 A That's right.
25 Q When did Microsoft first project what
246 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 its revenue would be from browser advertising from
2 the Search button and/or Home Page?
3 A Well, we actually didn't have enough
4 share with IE1 or IE2 that we built that much value
5 at all because we just didn't have much traffic.
6 When it came to IE3 we had a discussion
7 about how we would take that asset and what we would
8 do with that traffic. And we actually chose at that
9 stage instead of charging for it, to build some
10 partnerships by working with people who we directed
11 traffic to.
12 And I don't know if anybody had done --
13 I know there was discussions, I don't know if there's
14 a formal document, but we discussed the notion of
15 licensing that out versus just using it to build
16 partnerships.
17 In terms of actually having people pay
18 us large amounts of money, that's really gotten big
19 in the last year.
20 MR. BOIES: Would you read the question
21 back, please?
22 (The following question was
23 read:
24 "Q When did Microsoft first
25 project what its revenue would be
247 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 from browser advertising from the
2 Search button and/or Home Page?")
3 Q BY MR. BOIES: Do you understand the
4 question, Mr. Gates?
5 A Yeah. And the answer is: Probably as
6 part of that decision what to do with the IE3 traffic
7 we would have looked at the choice of charging or
8 using it in partnerships.
9 Q Could you tell me, just for the record,
10 when you're talking about?
11 A Oh, during the planning cycle for IE3.
12 Q Which was when?
13 A That would have been sometime in '96.
14 Q Okay.
15 So at some time in '96, according to
16 your testimony, Microsoft made a projection of how
17 much money it could expect to receive from browser
18 advertising from the Search button and/or the Home
19 Page; is that what you're saying?
20 A Advertising in the very broad sense.
21 The principle that there would be that
22 revenue predated that. That was an insight we had
23 quite a bit before that.
24 But the first time we looked at, okay,
25 what should we do with this traffic would have been
248 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 when we were thinking that IE3 would garner
2 significant traffic.
3 Q When you say "the first time we looked
4 at what we would do about the traffic," I want to be
5 sure again that the question and answer is meeting
6 because I know you use words very precisely.
7 What my question is is: When did you
8 first make a projection, when did Microsoft first
9 make a projection, of how much money Microsoft would
10 receive from advertising revenue in connection with
11 the browser?
12 MR. HEINER: Certainly asked and
13 answered.
14 MR. BOIES: You may be right. But
15 because he keeps changing the language he uses, and I
16 know from prior answers that usually when he changes
17 the words, he means something by it, I need to have
18 it tied down.
19 MR. HEINER: Okay. And I think he does
20 mean something by his use of words. I'm just saying
21 that you asked the question and you got the answer.
22 Q BY MR. BOIES: Okay. What's the
23 answer?
24 A We looked at charging as part of the
25 IE3 planning during 1996.
249 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q I'm not asking when you looked at
2 charging. I'm asking when did Microsoft first make
3 an estimate or projection of how much money it would
4 receive.
5 A Oh, when we looked at the issue of
6 whether we -- it was a better idea to charge or not
7 as part of the IE3 planning.
8 Q And that would have been in 1996; is
9 that correct?
10 A Uh-huh.
11 Q You have to say "yes" or "no" for the
12 record.
13 A Yes.
14 You don't get "uh-huh's"?
15 Q She does, but it doesn't always come
16 out exactly the way you think.
17 And who made that estimate or
18 projection?
19 A I know there was discussion with Pete
20 Higgins and Peter Neupert and myself about that, and
21 each of us would have hazard some view of the value
22 there.
23 Confidential Material Redacted
24 Confidential Material Redacted
25 Confidential Material Redacted
250 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Confidential Material Redacted
2 Confidential Material Redacted
3 Confidential Material Redacted
4 Confidential Material Redacted
5 Confidential Material Redacted
6 Confidential Material Redacted
7 Confidential Material Redacted
8 Confidential Material Redacted
9 Confidential Material Redacted
10 Confidential Material Redacted
11 Confidential Material Redacted
12 Confidential Material Redacted
13 Confidential Material Redacted
14 Confidential Material Redacted
15 Confidential Material Redacted
16 Confidential Material Redacted
17 Confidential Material Redacted
18 Confidential Material Redacted
19 Confidential Material Redacted
20 Confidential Material Redacted
21 Confidential Material Redacted
22 Confidential Material Redacted
23 Confidential Material Redacted
24 Confidential Material Redacted
25 Confidential Material Redacted
251 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Confidential Material Redacted
2 Confidential Material Redacted
3 Confidential Material Redacted
4 Confidential Material Redacted
5 Confidential Material Redacted
6 Confidential Material Redacted
7 Confidential Material Redacted
8 Confidential Material Redacted
9 Confidential Material Redacted
10 Confidential Material Redacted
11 Confidential Material Redacted
12 Confidential Material Redacted
13 Confidential Material Redacted
14 Confidential Material Redacted
15 Confidential Material Redacted
16 Confidential Material Redacted
17 Confidential Material Redacted
18 Confidential Material Redacted
19 Confidential Material Redacted
20 Confidential Material Redacted
21 Confidential Material Redacted
22 Confidential Material Redacted
23 Confidential Material Redacted
24 Confidential Material Redacted
25 Confidential Material Redacted
252 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Confidential Material Redacted
2 Confidential Material Redacted
3 Confidential Material Redacted
4 Confidential Material Redacted
5 Confidential Material Redacted
6 Confidential Material Redacted
7 Confidential Material Redacted
8 Confidential Material Redacted
9 Confidential Material Redacted
10 Confidential Material Redacted
11 Confidential Material Redacted
12 Confidential Material Redacted
13 Confidential Material Redacted
14 Confidential Material Redacted
15 Confidential Material Redacted
16 Confidential Material Redacted
17 Confidential Material Redacted
18 Confidential Material Redacted
19 Confidential Material Redacted
20 Confidential Material Redacted
21 Confidential Material Redacted
22 Confidential Material Redacted
23 Confidential Material Redacted
24 Confidential Material Redacted
25 Confidential Material Redacted
253 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Confidential Material Redacted
2 Confidential Material Redacted
3 Confidential Material Redacted
4 Confidential Material Redacted
5 Confidential Material Redacted
6 Confidential Material Redacted
7 Confidential Material Redacted
8 Confidential Material Redacted
9 Confidential Material Redacted
10 Confidential Material Redacted
11 Confidential Material Redacted
12 Confidential Material Redacted
13 Confidential Material Redacted
14 Confidential Material Redacted
15 Confidential Material Redacted
16 Confidential Material Redacted
17 Confidential Material Redacted
18 Confidential Material Redacted
19 Confidential Material Redacted
20 Confidential Material Redacted
21 Confidential Material Redacted
22 Confidential Material Redacted
23 Confidential Material Redacted
24 Confidential Material Redacted
25 Confidential Material Redacted
254 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Confidential Material Redacted
2 Confidential Material Redacted
3 Confidential Material Redacted
4 Confidential Material Redacted
5 Confidential Material Redacted
6 Confidential Material Redacted
7 Confidential Material Redacted
8 Confidential Material Redacted
9 Confidential Material Redacted
10 Confidential Material Redacted
11 Confidential Material Redacted
12 Confidential Material Redacted
13 Confidential Material Redacted
14 Confidential Material Redacted
15 Confidential Material Redacted
16 Confidential Material Redacted
17 Confidential Material Redacted
18 Confidential Material Redacted
19 Confidential Material Redacted
20 Confidential Material Redacted
21 Confidential Material Redacted
22 Confidential Material Redacted
23 Confidential Material Redacted
24 Confidential Material Redacted
25 Confidential Material Redacted
255 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Confidential Material Redacted
2 Confidential Material Redacted
3 Confidential Material Redacted
4 Confidential Material Redacted
5 Confidential Material Redacted
6 Confidential Material Redacted
7 Confidential Material Redacted
8 Confidential Material Redacted
9 Confidential Material Redacted
10 Confidential Material Redacted
11 Confidential Material Redacted
12 Confidential Material Redacted
13 Confidential Material Redacted
14 Confidential Material Redacted
15 Confidential Material Redacted
16 Confidential Material Redacted
17 Confidential Material Redacted
18 Confidential Material Redacted
19 Confidential Material Redacted
20 Confidential Material Redacted
21 Confidential Material Redacted
22 Confidential Material Redacted
23 Confidential Material Redacted
24 Confidential Material Redacted
25 Confidential Material Redacted
256 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Confidential Material Redacted
2 Confidential Material Redacted
3 Confidential Material Redacted
4 Confidential Material Redacted
5 Confidential Material Redacted
6 Confidential Material Redacted
7 Confidential Material Redacted
8 Confidential Material Redacted
9 Confidential Material Redacted
10 Confidential Material Redacted
11 Confidential Material Redacted
12 Confidential Material Redacted
13 Confidential Material Redacted
14 Confidential Material Redacted
15 Confidential Material Redacted
16 Confidential Material Redacted
17 Confidential Material Redacted
18 Confidential Material Redacted
19 Confidential Material Redacted
20 Confidential Material Redacted
21 Confidential Material Redacted
22 Confidential Material Redacted
23 Confidential Material Redacted
24 Confidential Material Redacted
25 Confidential Material Redacted
257 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Confidential Material Redacted
2 Confidential Material Redacted
3 Confidential Material Redacted
4 Confidential Material Redacted
5 Confidential Material Redacted
6 Confidential Material Redacted
7 Confidential Material Redacted
8 Confidential Material Redacted
9 Confidential Material Redacted
10 Confidential Material Redacted
11 Confidential Material Redacted
12 Confidential Material Redacted
13 Confidential Material Redacted
14 Confidential Material Redacted
15 Confidential Material Redacted
16 Confidential Material Redacted
17 Confidential Material Redacted
18 Confidential Material Redacted
19 Confidential Material Redacted
20 Confidential Material Redacted
21 Confidential Material Redacted
22 Confidential Material Redacted
23 Confidential Material Redacted
24 Confidential Material Redacted
25 Confidential Material Redacted
258 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Confidential Material Redacted
2 Confidential Material Redacted
3 Confidential Material Redacted
4 Confidential Material Redacted
5 Confidential Material Redacted
6 Confidential Material Redacted
7 Confidential Material Redacted
8 Confidential Material Redacted
9 Confidential Material Redacted
10 Confidential Material Redacted
11 Confidential Material Redacted
12 Confidential Material Redacted
13 Confidential Material Redacted
14 Confidential Material Redacted
15 Confidential Material Redacted
16 Confidential Material Redacted
17 Confidential Material Redacted
18 Confidential Material Redacted
19 Confidential Material Redacted
20 Confidential Material Redacted
21 Confidential Material Redacted
22 Confidential Material Redacted
23 Confidential Material Redacted
24 Confidential Material Redacted
25 Confidential Material Redacted
259 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Confidential Material Redacted
2 Confidential Material Redacted
3 Confidential Material Redacted
4 Confidential Material Redacted
5 Confidential Material Redacted
6 Confidential Material Redacted
7 Confidential Material Redacted
8 Confidential Material Redacted
9 Confidential Material Redacted
10 Confidential Material Redacted
11 Confidential Material Redacted
12 Confidential Material Redacted
13 Confidential Material Redacted
14 Confidential Material Redacted
15 Confidential Material Redacted
16 Confidential Material Redacted
17 Confidential Material Redacted
18 Confidential Material Redacted
19 Confidential Material Redacted
20 Confidential Material Redacted
21 Confidential Material Redacted
22 Confidential Material Redacted
23 Confidential Material Redacted
24 Confidential Material Redacted
25 Confidential Material Redacted
260 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Confidential Material Redacted
2 Confidential Material Redacted
3 Confidential Material Redacted
4 Confidential Material Redacted
5 Confidential Material Redacted
6 Confidential Material Redacted
7 Confidential Material Redacted
8 Confidential Material Redacted
9 Confidential Material Redacted
10 Confidential Material Redacted
11 Confidential Material Redacted
12 Confidential Material Redacted
13 Confidential Material Redacted
14 Confidential Material Redacted
15 Confidential Material Redacted
16 Confidential Material Redacted
17 Confidential Material Redacted
18 Confidential Material Redacted
19 Confidential Material Redacted
20 Confidential Material Redacted
21 Confidential Material Redacted
22 Confidential Material Redacted
23 Confidential Material Redacted
24 Confidential Material Redacted
25 Confidential Material Redacted
261 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Confidential Material Redacted
2 Confidential Material Redacted
3 Confidential Material Redacted
4 Confidential Material Redacted
5 Confidential Material Redacted
6 Confidential Material Redacted
7 Confidential Material Redacted
8 Confidential Material Redacted
9 Confidential Material Redacted
10 Confidential Material Redacted
11 Confidential Material Redacted
12 Confidential Material Redacted
13 Confidential Material Redacted
14 Confidential Material Redacted
15 Confidential Material Redacted
16 Confidential Material Redacted
17 Confidential Material Redacted
18 Confidential Material Redacted
19 Confidential Material Redacted
20 Confidential Material Redacted
21 Confidential Material Redacted
22 Confidential Material Redacted
23 Confidential Material Redacted
24 Confidential Material Redacted
25 Confidential Material Redacted
262 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Confidential Material Redacted
2 Confidential Material Redacted
3 Confidential Material Redacted
4 Confidential Material Redacted
5 Confidential Material Redacted
6 Confidential Material Redacted
7 Confidential Material Redacted
8 Confidential Material Redacted
9 Confidential Material Redacted
10 Confidential Material Redacted
11 Confidential Material Redacted
12 Confidential Material Redacted
13 Confidential Material Redacted
14 Confidential Material Redacted
15 Confidential Material Redacted
16 Confidential Material Redacted
17 Confidential Material Redacted
18 Confidential Material Redacted
19 Confidential Material Redacted
20 Confidential Material Redacted
21 Confidential Material Redacted
22 Confidential Material Redacted
23 Confidential Material Redacted
24 Confidential Material Redacted
25 Confidential Material Redacted
263 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Confidential Material Redacted
2 Confidential Material Redacted
3 Confidential Material Redacted
4 Confidential Material Redacted
5 Confidential Material Redacted
6 Confidential Material Redacted
7 Confidential Material Redacted
8 Confidential Material Redacted
9 Confidential Material Redacted
10 Confidential Material Redacted
11 Confidential Material Redacted
12 Confidential Material Redacted
13 Confidential Material Redacted
14 Confidential Material Redacted
15 Confidential Material Redacted
16 Confidential Material Redacted
17 Confidential Material Redacted
18 Confidential Material Redacted
19 Confidential Material Redacted
20 Confidential Material Redacted
21 Confidential Material Redacted
22 Confidential Material Redacted
23 Confidential Material Redacted
24 Confidential Material Redacted
25 Confidential Material Redacted
264 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Confidential Material Redacted
2 Confidential Material Redacted
3 Confidential Material Redacted
4 Confidential Material Redacted
5 Confidential Material Redacted
6 Confidential Material Redacted
7 Confidential Material Redacted
8 Confidential Material Redacted
9 You were asked some questions earlier
10 about a June 21, 1995 meeting with Netscape. And
11 that's a meeting you did not attend; am I correct?
12 A I've never met with Netscape.
13 Q And did you know that Microsoft people
14 were meeting with Netscape before they actually met?
15 A I don't recall knowing in advance.
16 Q You did know after the fact because you
17 got the e-mails that we saw; correct?
18 A Yeah. That's right. I recall getting
19 those e-mails, at least the Thomas Reardon/Silverberg
20 one.
21 MR. HEINER: Mr. Boies, it's 6:00 now,
22 it's been a pretty full day. If this is a relatively
23 short line of questioning, why don't you finish it
24 up, we'll go to about 6:15.
25 MR. BOIES: Okay.
265 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 MR. HEINER: Okay.
2 Q BY MR. BOIES: You are aware that it
3 has been asserted that at that meeting there was an
4 attempt to allocate markets between Netscape and
5 Microsoft; correct, sir?
6 A My only knowledge of that is that there
7 was an article in the Wall Street Journal very
8 recently that said something along those lines.
9 Otherwise, no.
10 Q Is it your testimony that the first
11 time that you were aware that there was an assertion
12 that there had been a market allocation meeting or an
13 attempt to allocate markets at a meeting between
14 representatives of Microsoft and Netscape was a
15 recent Wall Street Journal article?
16 A I'm not sure how to characterize it.
17 The first I heard anything about that meeting and
18 somebody trying to characterize it in some negative
19 way was an Andreessen quote that was in the Wall
20 Street Journal very recently. And it surprised me.
21 Q Are you aware of any instances in which
22 representatives of Microsoft have met with
23 competitors in an attempt to allocate markets?
24 MR. HEINER: Objection.
25 THE WITNESS: I'm not aware of any such
266 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 thing. And I know it's very much against the way we
2 operate.
3 Q BY MR. BOIES: It would be against
4 company policy to do that?
5 A That's right.
6 Q Now, subsequent to being apprised that
7 Mr. Andreessen, at least, was asserting that this had
8 happened, did you make any effort to find out what
9 had actually happened at that meeting?
10 A Well, first of all, I don't want to be
11 involved in characterizing what Mr. Andreessen said
12 because I -- I -- all I know is something about a
13 quote about a dead horse head or something like that.
14 That was what I recall from the Wall Street Journal
15 article.
16 I did, after the Wall Street Journal
17 article, see some e-mail that Andreessen had sent our
18 people after the meeting saying it was a great
19 meeting, and I did see the Reardon mail that I
20 deleted but somebody gave back to me and some Reardon
21 notes from the meeting.
22 Now, I think we're talking about the
23 same meeting. I think there may have been more than
24 one. But in any case, I think we're talking about
25 the same meeting.
267 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q I think the record may show that there
2 was a meeting before the June 21 meeting.
3 A That sounds right.
4 Q But the meeting that I was particularly
5 asking about was the June 21 meeting. And I think
6 that that probably was what was in the Wall Street
7 Journal.
8 A No. You can't really say because the
9 Wall Street Journal talked about a May meeting, and
10 May is not June, not by a long shot.
11 Q You're right. May is not June. I
12 agree that May is not June. And maybe there were two
13 such meetings.
14 A Well, I'm not aware of any meeting
15 between us and Netscape in May. So that seems very
16 strange. And that confused me about that Wall Street
17 Journal article.
18 Q Let me ask you: Did you -- when you
19 saw the Wall Street Journal article that talked about
20 a May meeting in terms of allegedly market dividing
21 conduct, did you try to find out whether there had
22 been a May meeting between representatives of
23 Microsoft and representatives of Netscape?
24 A Well, again, I wouldn't characterize
25 the article in that way. When I read the article,
268 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 what it said interested me enough and concerned me
2 enough, I did seek to find out if there was a May
3 meeting. But I don't think the article is what
4 you're suggest -- said what you're suggesting. I
5 mean, we should get a copy of the article. I don't
6 remember it that way. I remember Andreessen talking
7 about how he had been in fear that Don Coerleone had
8 come to see him. And, you know, once I realized that
9 there was no meeting in May and that it wasn't -- you
10 know, that he after the meeting said he enjoyed the
11 meeting and that it was, you know, just a group of
12 our guys down there trying to talk about if there was
13 any areas of cooperation, it seemed -- the whole
14 thing seemed very strange to me.
15 Q Did you talk to people to find out
16 whether there was a May meeting?
17 A Yes.
18 Q Who did you talk to?
19 A I consulted with my lawyers.
20 Q Other than consulting with your
21 lawyers, did you try to find out whether there was a
22 May meeting?
23 A Well, my lawyers then talked to all the
24 people that might have met with Netscape, and I made
25 sure they did that pretty broadly.
269 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 Q And you were informed that there was no
2 May meeting; is that your testimony?
3 A That's the understanding I was given,
4 yes. And then I was given some of the other
5 information that I've already mentioned.
6 Q But all that information came from your
7 lawyers not from nonlawyer employees of Microsoft; is
8 that what you're saying?
9 A It came to me through my lawyers.
10 Q Did you ever have a conversation with
11 anyone in the last 12 months other than your lawyers
12 concerning whether there were meetings in May or June
13 of 1995 with Netscape, and if so, what happened at
14 those meetings?
15 A Well, there might have been a point
16 after I got all the data from the lawyers where I
17 said to some of the PR people what an outrageous
18 slander that article had been and how unfair I felt
19 it was. And so I may have mentioned that to them.
20 Q Did you have any conversations in the
21 last 12 months with any person who was dealing with
22 Netscape in 1995 about whether there were May or June
23 meetings and if so, what happened at those meetings?
24 A No. I relied on the lawyers to go and
25 meet with those people and gather the facts and
270 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 educate me about was there a May meeting and what was
2 the agenda or what was Andreessen's state of mind
3 after the meeting, what did the notes look like. But
4 that's all very recent. That is after the Journal
5 article.
6 Q Now, have you ever read the complaint
7 in this case?
8 A No.
9 Q Have you ever received a summary of the
10 complaint in this case?
11 A I wouldn't say I've received a summary,
12 no. I've talked to my lawyers about the case but not
13 really the complaint.
14 Q Do you know whether in the complaint
15 there is an assertion -- I'm not talking about the
16 Wall Street Journal article, I'm talking about the
17 complaint that was filed last May.
18 Do you know whether in that complaint
19 there are allegations concerning a 1995 meeting
20 between Netscape and Microsoft representatives
21 relating to alleged market division discussions?
22 A I haven't read the complaint so I don't
23 know for sure. But I think somebody said that that
24 is in there.
25 Q Did you find that out before or after
271 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 the Wall Street Journal article?
2 A The first time I knew about these
3 allegations was the Wall Street Journal article.
4 Q That is, that article preceded any
5 knowledge that you had or didn't have related to the
6 complaint?
7 A That's right.
8 MR. BOIES: Okay. That completes that
9 line of questioning.
10 MR. HEINER: Okay.
11 Pick up tomorrow at 8:30?
12 MR. BOIES: That would be good.
13 THE WITNESS: Yeah. The 4:00 deadline
14 tomorrow is unfortunately not a movable deadline.
15 THE VIDEOGRAPHER: This is the end of
16 the deposition. The time is 6:12. This is the end
17 of Tape 4 of the videotaped deposition of Bill Gates
18 to be continued tomorrow morning at 8:30 A.M. which
19 is August 28th.
20
21 * * *
22
23
24
25
272 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 I hereby declare, under penalty of 2 perjury, that the
foregoing answers are true and 3 correct to the best of my knowledge and belief.
4 EXECUTED AT _________________, CALIFORNIA,
5 this ______day of _________________, 1998.
6
7 _________________________
8 Bill Gates
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
273 BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 STATE OF CALIFORNIA )
) ss.
2 COUNTY OF LOS ANGELES )
3
4 I, Katherine Gale, CSR 9793, a Certified
5 Shorthand Reporter in and for the State of
6 California, do hereby certify:
7 That prior to being examined, the witness named
8 in the foregoing deposition was by me duly sworn to
9 testify the truth, the whole truth, and nothing but
10 the truth;
11 That said deposition was taken before me at the
12 time and place named therein and was thereafter
13 reduced to typewriting under my supervision; that
14 this transcript is a true record of the testimony
15 given by the witness and contains a full, true and
16 correct report of the proceedings which took place at
17 the time and place set forth in the caption hereto as
18 shown by my original stenographic notes.
19 I further certify that I have no
20 interest in the event of the action.
21 EXECUTED this 28th day of August, 1998.
22
23
____________________________
24 Katherine Gale, CSR #9793
25
274
BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900





1 STATE OF CALIFORNIA )
) ss.
2 COUNTY OF LOS ANGELES )
3
4 I, Kathleen Barney, CSR 5698, a Certified
5 Shorthand Reporter in and for the State of
6 California, do hereby certify:
7 That prior to being examined, the witness named
8 in the foregoing deposition was by me duly sworn to
9 testify the truth, the whole truth, and nothing but
10 the truth;
11 That said deposition was taken before me at the
12 time and place named therein and was thereafter
13 reduced to typewriting under my supervision; that
14 this transcript is a true record of the testimony
15 given by the witness and contains a full, true and
16 correct report of the proceedings which took place at
17 the time and place set forth in the caption hereto as
18 shown by my original stenographic notes.
19 I further certify that I have no
20 interest in the event of the action.
21 EXECUTED this 28th day of August, 1998.
22
23
____________________________
24 Kathleen Barney, CSR #5698
25

275
BARNEY, UNGERMANN & ASSOCIATES 1-888-326-5900






Released Pursuant to 15 U.S.C. §30

08.27.20

Techrights Needs Help From American Readers (in Order to Retrieve the Court Documents Regarding Bill Gates’ Engineer)

Posted in Bill Gates, Courtroom at 7:59 am by Dr. Roy Schestowitz

Guilty highlight

Jones page 1

Jones page 2

Jones page 3

Jones page 4

guilty plea one year apart

Summary: In order to advance our investigation of the arrest of Mr. Jones (at the home of an increasingly evasive Bill and Melinda Gates) we need to gain access to the above documents; please help Techrights if you can, as an American citizen, request most or all the documents (detailed instructions available)

BACK in January we took note of the above court documents, which we have not received yet. That was not too long after Bill Gates’ close ties to Epstein had become public knowledge and not too long before COVID-19 ‘stole’ the news. Now they try to associate anyone who has queries on the matter with cranks. Even if the corporate media too is inquiring.

We kindly ask readers who are based in the US to request all the above documents (over 100 pages, should cost about $30 all in all) and pass them to us for publication. All the detailed instructions can be found here (screenshots included; we published that in late January).

“We kindly ask readers who are based in the US to request all the above documents (over 100 pages, should cost about $30 all in all) and pass them to us for publication.”In order to get to the bottom of what happened at the mansion of Bill and Melinda we need to know what was said in the courtroom. It’s very difficult to find any information whatsoever about Mr. Jones (other than this case), let alone a mugshot or anything registered by the state (he appears to not to have ever registered as a sexual predation risk, contrary to the judge's ruling). We checked ourselves (mostly Ryan did) and found only other people with the same name. Ryan is currently low on money, so he has not petitioned the court for these papers. If anyone out there (US citizen) can do that, it will help us tremedously. The outcome of this case raises more questions than it answers because of glaring inconsistencies such as this… and the closer we look at the filenames, the more concerned we become.

08.18.20

Daniel Wallace Explains Why He Challenged the GPL (Copyleft) in Court

Posted in Antitrust, Courtroom, Free/Libre Software, FSF, FUD, GNU/Linux, Interview, Law at 10:30 pm by Dr. Roy Schestowitz

Richard Stallman
Richard Stallman’s last interview as FSF president

Summary: Almost 15 years ago Daniel Wallace alleged that copyleft (or GPL specifically) was problematic and contravened federal antitrust laws; he lost the case and now he explains to us why he pursued that misguided litigation campaign

OVER the past few days we’ve been studying the GPL challenge that was widely discussed a decade and a half ago after Daniel Wallace, about 60 at the time, had alleged that it was an antitrust violation. He even took it to court. As Wikipedia put it:

Wallace v. International Business Machines Corp., 467 F.3d 1104 (7th Cir. 2006), was a significant case in the development of free software. The case decided, at the Court of Appeals for the Seventh Circuit, that in United States law the GNU General Public License (GPL) did not contravene federal antitrust laws.

Daniel Wallace, a United States citizen, sued the Free Software Foundation (FSF) for price fixing. In a later lawsuit, he unsuccessfully sued IBM, Novell, and Red Hat. Wallace claimed that free Linux prevented him from making a profit from selling his own operating system.

We found the current contact details of Mr. Wallace and Ryan, who comes from the same state where Wallace resides, did eventually call him. That was yesterday. “He said it was long in the past and that he was planning to develop a product based on BSD,” Ryan reported. “He wouldn’t go further than that. He just said he’s 74 now and it’s long in the past. He chose not to proceed because he was representing himself pro se and that it would have bankrupted him had he continued to appeal.”

When we started exploring this we wondered aloud who might have funded or ‘bankrolled’ the lawsuit.

“When we started exploring this we wondered aloud who might have funded or ‘bankrolled’ the lawsuit.”“He said it was just his opinion that the GPL doesn’t “hold water” legally,” Ryan continued, “and that giving software away and charging for services prevents others from making competitive products.”

Did Microsoft have anything to do with this (like the SCO lawsuit)? “Doesn’t pass the “sniff test” for Microsoft,” Ryan said, “I think it’s just someone who wanted to knock over copyleft because they had some idea for a product that couldn’t compete. He seemed to not like Red Hat very much. He said that it was dishonest to give the software out for free and charge for services. The court kept saying that he failed to articulate an antitrust argument. They let him amend his complaint 4 times before they threw it out.”

Groklaw wrote a lot about it at the time. Sadly, some Groklaw pages are no longer accessible.

“Groklaw wrote a lot about it at the time. Sadly, some Groklaw pages are no longer accessible.”“He seemed to be under the impression that the GPL requires software to be free of charge,” Ryan said. “It doesn’t. It just makes it hard to sell because someone could take the same source code and come up with a different version. He said he got hit with huge costs for the legal costs incurred by FSF and the three companies (IBM, RH, Novell).”

“Although,” Ryan continued, “he accidentally contributed something to the GPL. Instead of knocking it down, he gave us case law that it provides direct benefits to the market, as decided by the trial judge, and a three judge panel voting unanimously at the Seventh Circuit appeals court. Which can be cited if someone else is ever hit with antitrust complaints regarding a Free Software License. I’d say that Daniel Wallace’s demeanor was more shocked that someone wanted to talk to him and evasive, but definitely kind of blindsided that someone would poke around at that after 15 years.”

It’s never too late to start pursuing answers and clarify.

“He said he was looking into some product based on BSD but wouldn’t elaborate,” Ryan summarised. “I mean, there are small tech companies in the Indianapolis area, so it’s certainly possible that he wanted to make a server offering or a network product, where FreeBSD was competitive with Linux at the time, mostly.”

“In reality, what Microsoft is doing — licence-wise — is far closer to a violation of antitrust law.”“He has very strong opinions that the GPL is illegal under copyright law. He kept saying things like “I couldn’t attack it using copyright law, so I went after it with antitrust law.”.”

As Wikipedia put it: “On May 16, 2006, Judge Richard L. Young dismissed the case with prejudice: “Wallace has had two chances to amend his complaint [...]. His continuing failure to state an antitrust claim indicates that the complaint has “inherent internal flaws.” [...] Wallace will not be granted further leave to file an amended complaint because the court finds that such amendment would be futile.”

In reality, what Microsoft is doing — licence-wise — is far closer to a violation of antitrust law. IBM, Novell, and Red Hat collaborating in the open, or sharing code, isn’t anywhere as problematic as what Microsoft does.

“No less than Bill Gates himself said in a recent Fortune article that Microsoft competes better against Linux in China when there’s piracy than when there isn’t.

“So, Microsoft actively looks the other way as people pirate its software. It builds its market share that way, and lets people get used to the idea of having Windows at a certain price.”

ECT

EPO Censorship Rebuked by Former UK Human Rights Judge

Posted in Courtroom, Europe, Patents at 1:18 pm by Guest Editorial Team

The EPO still censors every single page in Techrights, which it also threatened using several law firms

EPO IAC
Former UK Judge at the European Court of Human Rights, Sir Paul Mahoney:
Now head of the EPO’s Internal Appeals Committee

Summary: The European Patent Office (EPO) under the leadership (maladministration) of António Campinos and Benoît Battistelli is in noncompliance with international standards of law

In 2017 (warning: epo.org link) following an unrelenting stream of adverse publicity both inside the EPO and outside, Battistelli was forced by the Administrative Council to reform the EPO’s internal justice system.

Since then the Internal Appeals Committee (IAC) has been headed by Sir Paul Mahoney, a distinguished British legal scholar who previously served as first President of the European Union Civil Service Tribunal (2005 to 2011) and as the UK’s judge on the European Court of Human Rights from 2012 to 2016.

Somewhat belatedly the Mahoney-led IAC is getting around to dealing with the massive backlog of internal appeal cases that built up during the Battistelli era at the EPO.

It’s an unenviable task that could be compared with the fifth labour of Hercules, cleaning out the large volumes of manure that have accumulated in the Augean stables of the Battistelli regime.

Augean
The IAC has the unenviable task of cleaning out the Augean stables of the Battistelli era

The role of the IAC is to issue opinions to the EPO’s two appointing authorities, the President and the Administrative Council, who then take a final decision which can be appealed to the ILOAT.

“Somewhat belatedly the Mahoney-led IAC is getting around to dealing with the massive backlog of internal appeal cases that built up during the Battistelli era at the EPO.”The system is far from ideal because the opinions issued by the IAC are only non-binding advisory opinions and the appointing authority is free to depart from them.

Also following a “reform” introduced by Battistelli which remains in force long after his departure, the appellant no longer receives an advance copy of the IAC’s opinion when it is issued to the appointing authority as was the long-established practice prior to Battistelli. Nowadays a copy of the opinion is only provided to the appellant after the appointing authority has issued its decision.

“In a recent landmark case, the IAC issued an opinion belatedly excoriating an arbitrary and unprincipled act of censorship by Elodie Bergot which occurred almost four years ago in 2016.”Strictly speaking any departure from the IAC’s opinion by the appointing authority should be justified by reasons. But, hey, this is EPOnia where anything goes and where – to borrow a phrase from the ILOAT – “arbitrary, unprincipled or even irrational decision-making” was the ordre du jour under Battistelli.

Nevertheless it seems that the current EPO management under Campinos is generally more inclined to follow the opinions of the IAC than was the case under Battistelli.

In a recent landmark case, the IAC issued an opinion belatedly excoriating an arbitrary and unprincipled act of censorship by Elodie Bergot which occurred almost four years ago in 2016.

Bergot censorship
Sir Paul and his Committee were not amused by Bergot’s censorship

The background to this case is that in October 2016 the EPO Central Staff Committee (CSC) tried to publish two documents relating to the internal justice system of the EPO, namely a presentation criticising the operation of the system under Battistelli’s management and an open letter to the Principal Director of the Human Resources Department (Dir 4.3), Ms Elodie Bergot.

But Bergot was having none of this and – presumably with the backing of Battistelli and her hubby Gilles Requena – she spiked the publication.

Four years down the road, in a unanimous opinion the IAC has found that the Office was wrong in refusing the publication of the two documents.

“Four years down the road, in a unanimous opinion the IAC has found that the Office was wrong in refusing the publication of the two documents.”The IAC confirmed that freedom of speech is part and parcel of freedom of association. Those freedoms are not absolute or unconditional and an organisation may take steps to prevent publications containing incorrect information, or statements impairing the dignity of international civil service or grossly abusing freedom of speech. However, such interferences by an organisation are subject to limits.

The IAC found it impossible to accept that two minor statistical deviations from actual official figures in the presentation objected to by Bergot were grave enough to justify the refusal to allow publication.

The IAC also confirmed that staff representatives are at liberty to criticise the EPO’s policies and actions, even sharply and robustly, as long as the language used is not injurious or defamatory. This is a perfectly legitimate manifestation of the political jousting between management and staff bodies that is part and parcel of the life of a healthy International Organisation.

“The IAC unanimously concluded that the censorship imposed by Bergot was neither appropriate nor proportionate and that the refusal to publish both documents was tainted by illegality.”The IAC took the position that it is essential for staff members to have knowledge of the various positions discussed between EPO management and the Staff Committee on matters of general interest for staff. This ensures that EPO management can be exposed to a degree of accountability to staff in relation to policy decisions affecting them.

The IAC unanimously concluded that the censorship imposed by Bergot was neither appropriate nor proportionate and that the refusal to publish both documents was tainted by illegality.

In addition, it also found aggravating circumstances in the way that the EPO handled the CSC requests, by delaying a response and then failing to respond altogether.

The IAC also had “some difficulty in understanding” the EPO when it raised a receivability objection with no serious arguments at the appeal stage.

“So after almost four years of waiting the CSC has had a small taste of justice.”The good news is that the new President of the Office, António Campinos, has decided to follow the opinion of the IAC. As a result, the CSC is finally allowed to publish the documents from October 2016 on the EPO Intranet!

So after almost four years of waiting the CSC has had a small taste of justice.

But what is even more remarkable about this case, is that the person responsible for trampling on the CSC’s fundamental right to freedom of speech still remains in her position.

Back in June 2018, the ILOAT found Bergot guilty of masterminding a witch-hunt conducted against two SUEPO officials, one of whom was unlawfully dismissed from his position and the other who was unlawfully downgraded.

Bergot mugshot
Fit for purpose as head of the EPO’s HR department?
Some think not… but Madame Bergot still enjoys António’s support

To her officially documented record as a union-basher, Bergot can now add the distinction of an official rebuke for unlawful acts of censorship.

Campinos Battistelli
Why does Campinos continue to protect Bergot?

It’s a mystery how someone with such an egregious track record of trampling on the fundamental rights of staff can be allowed to remain in a senior managerial post at an international organisation like the EPO.

“It’s a mystery how someone with such an egregious track record of trampling on the fundamental rights of staff can be allowed to remain in a senior managerial post at an international organisation like the EPO.”What many people at the EPO are wondering is why Campinos is still protecting Bergot whose “fitness for purpose” as a principal director of the EPO’s human resources department is clearly open to question. Some suspect that it is part of a secret unwritten deal with his predecessor Battistelli.

Over to you on that one, António… anything to say?

Or has the cat got your tongue?

08.16.20

No Prison for Pre-Teen Child Rape Collections When You Work for Bill Gates?

Posted in Bill Gates, Courtroom at 4:39 am by Dr. Roy Schestowitz

Jones files

Child rape but no arrest
Article source

Summary: Today we reveal part of a page (one among thousands, with other fetishes too) to highlight the nature of files Bill Gates’ engineer was collecting before his arrest at the Gates mansion (we’ve redacted the hashes by blurring them); the latter article (screenshot and link) highlights the sheer lack of consequences, which is unheard of in cases of this nature and massive scale (more files were found than the media reported)

08.11.20

United States v IBM Archives/Resources

Posted in America, Antitrust, Courtroom, IBM at 8:23 am by Dr. Roy Schestowitz

Better days

Summary: As the massive case against IBM monopoly (United States v IBM; 104,400 pages of trial transcripts and 17,000 exhibits) predates the World Wide Web it’s difficult to find comprehensive literature about it any longer (Wikipedia and more modern sites are instruments of revisionism and reputation laundering)

WE recently used Wikileaks to access national archives about IBM, seeing that libraries are perishing and online libraries are often blocked by paywalls. Even more recent articles on this subject have been locked away from the public [1, 2, 3], so the younger generations are unlikely to learn much about what happened and why.

Back in the 1980s there were several widely-cited journal papers about it. Here’s one:

Thomas on IBM

Another one (much more recent):

2000 paper about IBM

This one we were able to get in PDF form with OCR:

Ibm antitrust

It’s possible that we’ll examine those more closely; very little is known to today’s younger people and the P.R. industry is happy to exploit that. IBM is still trying to control the news.

« Previous entries Next Page » Next Page »

RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channels: Come and chat with us in real time

New to This Site? Here Are Some Introductory Resources

No

Mono

ODF

Samba logo






We support

End software patents

GPLv3

GNU project

BLAG

EFF bloggers

Comcast is Blocktastic? SavetheInternet.com



Recent Posts