03.23.11

^{Gemini version available ♊︎}

‘New’ Leaked E-mails from Microsoft Show How Microsoft Brands ‘PCs’ Windows

Posted in Antitrust, Bill Gates, Hardware, Microsoft, Windows at 5:45 pm by Dr. Roy Schestowitz

Summary: Bill Gates’ sticker games and many other antitrust exhibits that show Microsoft’s approach towards competition

SOME MORE NEW EXHIBITS are coming out of Comes vs. Microsoft, thanks in part to the work of Groklaw contributors (special thanks to Pogson with a pointer to the work of “Superbowl”). The following new batch helps show some of the hardware market distortion we’ve been covering in the context of Comes vs. Microsoft, e.g. in:

More exhibits are useful to have in textual form because people just won’t bother reading an unsorted archive of scans in PDF form. The posts above cover parts of a stash of Intel-related E-mails, but we missed so many more. “We could use MDA incentive to convince Oems to refere to the PCs they license Windows on as WindowsPC’s rather than IBM compatible,” Bill Gates states on in of the exhibits below. “We could incent them to use this designation sort of like we do the logo. If we were successful the world would change the way it talks about PCs to WindowsPCs.”

Nowadays Microsoft tries to mix the terms “Windows” and “PC”, making them increasingly synonymous. Let us handle one exhibit at a time and summarise the key points presented therein

PXE 7578

Gist: Message to Steve Ballmer about OS/2 and spitfire

MS-PCAIA2 000001006
CONFIDENTIAL

To: steveb
Cc: darrenr jeffr jimall
Subject: Spitfire

Date: Mon May 6 15:45:07 1991

Logically spitfire should be managed out of our group in vancouver
from a development point of view. Since they will connect our
file sharing message store with everything thru gateways and they
will also connect spitfire to everything thru gateways it makes
non sense for them not to have spitfire. Spitfire cant be released
without testing all the gateways and it has to track any changes
in the fie sharing message store.

>From a marketing point of view our gateways and spitfire should be
sold
the same way – same channels same support. I think it makes sense
for WGA to do this. However I think its too bad to take things away
from dwayne. WGA has no clear policy about whether gateways/spitfire
have special distribution.

If we agree on this then we need to come up with some kind of
transition plan.
I present it for discussion at this point.

This is separate from the question of whether spitfire should be
based on 1.3, 2.0 or NT in its first release.

From markwo Tue May 7 11:51:29 1991
To: mikemap
Subject: BofA Update 5/6/91
Cc: barbr dianek joef joes markw martat michelg meilf pamelab richmac
tamibro
Date: Tue May 7 11:50:03 1991

The U.S. Division had a fairly arduous implementation of LAN Manager. The
configuration with SQL, Lotus Notes, Windows Workstation from ADS along with
the applications was aggressive to start with. We had on-site assistance
from PSS for two weeks, and in the eleventh hour we discovered a “bug”
in
LAN Man which was causing all these problems. PSS and NEU are cognizant of
all the installation issues with this site. Currently the site is running
fairly smooth, but the start up experience has left BofA senior management
with some dubious thoughts about our solutions.

The next site, is scheduled for N.Y. at the end of this month. Management is
concenred whether this platform is “bullet proof” enough to roll out
to 20
other sites. The visibility of this project has reached to Peter Hill and
Martin Stein. There is a feeling that this project should be turned over
to IBM and use LAN Server.

On another note, IBM is now aggressively marketing OS/2 2.0 on the desktop.
They are starting with the line of business areas within BofA. Theyu have
a fairly large poject started with IBM building a custom front-end for OS/2
2.0 for their branch automation. IBM is astutely positiioning OS/2 for their

MS 504703
CONFIDENTIAL

Plaintiff’s Exhibit
7578
Comes v Microsoft

PXE 3800 is illegible (says “Superbowl”)

PXE 39242 – NT5.1 is a glorified SP

Gist: Bill Veghte (now in HP) responds to a message which reveals how the equivalent of a Service Pack is something Microsoft charges a lot of money for. “One alternative is to acknowledge the reality that NT5.1 release is simply a
glorified service pack and turn our development/release cycles to the more aggressive release in Q2 2000 that can be a real substitute for Win98,” says the message.

PLAINTIFF’S
EXHIBIT 3924
Comes v. Microsoft

GOVERNMENT
EXHIBIT
426

From: Bill Veghte
Sent: Wednesday, January 28, 1998 4:55 PM
To: Carl Stork (Exchange), Jim Allchin (Exchange); Moshe Dunie; S. Somasegar;
Jawad Khaki;
Deborah Black; Lou Perazzoli; Tom Phillips; Ed Stubbs
Subject: RE: 1999 Release Plans

Carl brings up excellent points here. The challenge we now have with the 5.x
release is that it is serving multiple masters.
With discipline, we can release product in Q2 that will accomplish the
following: (a) 5.x that the marketing folks can
trumpet to push fols that haven’t upgraded yet, (b) fix some serious holes that
have become obvious as we go thru shipping
NT5. (c) refresh vehicle for OEMs. It will not accomplish our goal of
preventing a Win98 SP nor will it significantly richen
the NT mix in the OEM channel beyond what we accomplish with NT5.

Original Message
From: Carl Stork (Exchange)
Sent: Wednesday, January 28, 1998 4:39 PM
To: Jimm Allchin (Exchange); Moshe Dunie; S. Somasegar; Bill Veghte; Jawad
Khaki; Deborah Black; Lou
Perazzoli; Tom Phillips
Subject: 1999 Pelease Plans

There have been several developments this week that change the assumptions
behind the 1999 product
releasae plans in the 3-Year plan. Our original plan was as follows (taken from
one of our slide sets)
* Focus new development efforts exclusively on NT code base to avoid Win98 OSR
* No new hardware support for Win98, and minimal SP release. (e.g. IE5 only)
* Create NT5.1 schedule-driven to meet OEM fall ’99 product lines
* Add hardware support & features to NT focused on getting OEM runrate at
the high end consumer market.

Here is new information that we have learned this week:
* If NT5.1 is priced at $100, and Win98 is priced at $50, OEMS will ship Win98.
They will acquire any new
hardware support components from third parties (IHVs, Phoenix, Systemsoft,
Intel, etc) or not ship the
hardware. NT5.1 is not compelling in the consumer market segment – it does not
have sufficient appeal to
support a $50 price increase (and bear risk the compatibility, driver
coverage).
* NT5.1 will not be a “consumer” release that pushes OEMs to pick up
for their customer lines – it is a “service
pack” to NTW5.0. More time is needed to accomplish this feature set for
OEMS (and end-users).
* There are some hardware features that will become mainstream in Fall’99 that
require some OS changes,
notably those in the 440BX, PIIX6 and Camino chipset. At a minimum these
include a chipset minipoort, and
1394 OHCI support, possibly with 1394 storage. If Microsoft does not supply
these in an OSR,k then other
distribution mechanisms need to be established. This becomes messy as there are
components which are
not on the distribution media available from our authorized replicators.
* There will be a vibrant third party markert in futher advancing hardware
support in Win98 – ranging from Intel
to IHVs to companies like Pheonix and Systemsoft. At a minimum, we will have
all sorts of
upgrade/compatibility challenges as we try and upgrad the installed base to NT6.
the design, quality &
interoperability of third party hardware support will be lowe4r, and over time
this will lead to increased support
problems (for example, we are shipping IA-SPOX in Win98 in order to support
installed base of software
modems).
* There are a number of componentsd that will most likely need to be shipped on
Win98, including IE5, COM+
and DirectX. There are others like DeviceBay, xDSL, or Intel’s video phone work
that are important for
partners.
* Feedback from OEM partners is the level of integratrion that we did for IE4 in
OSR 2.5 was bad both from
customer experience and manufacturing perspective. The OEM group will push very
hard to have a fully
inte4grated OPK for IE5.

Overall the proposed plan does not (a) meet the requirements of ourt OEM
customers to provide a release that
they would ship into the high end consumer systems, (b) meet their needs for new
hardware support, and (c)
eliminate the need to develo Win98 OSRs.

Given these realities, I believe we need to either reset our priorities for the
SP2 and/or consider alternatives.

One alternative is to acknowledge the reality that NT5.1 release is simply a
glorified service pack and turn our
development/release cycles to the more aggressive release in Q2 2000 that can be
a real substitute for Win98
with a $50+ price point. Given that we’ll need to provide a Win98 SP/OSR with
IE5/DX6/COM+, let’s target it for
Fall ’99 pre-install needs with the minimum new hardware support needed for
platform quality and a smooth
upgrade opportunity for NT6.

MS7 005950
CONFIDENTIAL

MS-PCA 1093506

PXE 6928_L

Gist: Highly confidential Office XP + Windows XP + SharePoint thoughts (bundling and lock-in)

Plaintiff’s Exhibit
6928_L
Comes v. Microsoft

From: Anders Brown
Sent: Tuesday, February 06, 2001 9:59 PM
To: Steven Sinofsky; Charles Stevens; Joseph Krawaczak
Cc: John Vail
Subject: FW: Office in the Solution Clusters

Fyi – just keeping you in the loop wrt to Office and Sable thoughts…

Original Message
From: Anders Brown
Sent: Tuesday, February 06, 2001 9:55 PM
To: Dan Neault; Valerie Olague; Jay Jamison
Cc: Sable Solution Cluster Leads
Subject: Office in the Solution Clusters

Based on Orlando’s comment that desktop pull-through was one of the core metrics
we should score the
rankings on, I’ve taken a look at where Office is today in the scenarios, and
added it to a few others where it
should make sense. I’ve updated the attached ppt (text in red) to reflect my
comments… below is a bit
more description of areas that need attention/discussion.

Corporate Intra/Internet Solution [Office is currently in this scenario]
This one is great — Office shuold just be the front end to this scenarios.
Value-add the XP provides is (1) the addition
of Share Point Team services to an enterprise, and (2) a front end add-on for
Share Point Portal Server (Tahoe). Tahoe
actually provides the add-on, but it integrates into Office. It’s a much better
story here with Office XP than with Office
2000.

Only thing we need to add is the revenue assocaited with upgrades: about $150
per enterprise customer. I
assume we have some CAL number floating out there and we should just add this to
it…

Business Performance Analysis [Office is currently in this scenario]
Office is in this scenario — and should be — but to be clear, we need to
understand what Office needs to do a bit more to
be the front end. In a perfect world, we’d have Ofgfice be the sole front end,
but at this point I don’t believe Office can’t
stand up and say it “does BI” like Knosys’ and Cognos’ of the world
(i.e. hard core OLAP support, “walking the
edge of the cube”, “drill through”, etc). That said, Office
should be part of this scenario, and again we should add the
CALs @ $150/desktop. It just might take a bit more work to really nail the
value-add of Office over the
partner solution.

Media Services [Office is not currently in this scenario]
Office should be placed in this solution cluster. It just makes sens that if we
go out with a broader collaboration story,
that this includes Office. This is actually probably better names something
like “Next-Generation Collaboration”
solution, or something that moves the name from what a simple technology (media
services) to what it really is: the
next wave of collaboration and communication services with Office and Windows.

Accelerated Deployment for the XP Desktop [this scenario does not exist]
This was a great suggestion earlier by sshay… we should move forward on this
one, and of course the market
opportuniity for Office is at $150/desktop. Think I’d change the name to
include something around
Productivbity: “Advanced Desktiop Productivity and Accelerated
Deployment” or something… it would be
simply Office XP + Windows XP + SharePoint Teamn Services plus deploymenty
services. I believe this one
is in process already…

Note the updated comments in the attached PPT – these should be merged into the
most recent deck. I’ll give Valerie
and Jay a call tomorrow AM.

-anders

HIGHLY CONFIDENTIAL

MS/CR 002842
CONFIDENTIAL

PXE 4434

Gist: Microsoft and Zeos licence

PLAINTIFF’S
EXHIBIT
4434
Comes v. Microsoft

Carl Sittig – OEM Sales
Microsoft Corporation
One Microsoft Way
Redmond, WA 98052-6399

Tel 206 936 6348
Fax 206 93MSFAX

Microsoft(r)

October 12, 1993

Mr. Jum Ticknor
Zeos International, LTD
1301 Industrial Blvd.
Minneapolis, MN 55413

RE: Side Letter to the Zeos International, LTD and Microsoft Corporation License
Agreement,
dated June 1, 1990, Contract No. 4934-0130 (“Agreement”).

Dear Jim:

I received your signed copies of Ammendment #7 to the Agreement, along with your
requested changes to
Exhibit X, NAMES AND LOCATIONS OF COMPANY SUBSIDIARIES. These changes have
been
made and the new Exhibit X has replaced the Exhibit X in the Ammendment you
signed. Attached is a copy
of the new Exhibit XX for your review. Please file this letter with Ammendment
#7 when you receive your
executed copy from Microsoft.

Please call if you have any questions.

Sincerely,

[signature]

Carl Sittig
OEM Account Manager

Microsoft Corporation is an equal opportunity employer.

MS 0039898
CONFIDENTIAL

PXE 4430

Gist: Amendment to the above

PLAINTIFF’S
EXHIBIT
4430
Comes v. Microsoft

AMMENDMENT

AMMENDMENT NUMBER 8
to the MICROSOFT OEM LICENSE AGREEMENT
between MICROSOFT CORPORATION, a Washington U.S.A. Corporation
and ZEOS INTERNATIONAL, LTD, a Corporation of Minnesota
MICROSOFT LICENSE # 4934-0130, dated June 1, 1990

This Ammendment to the License Agreement between MICROSOFT CORPORATION
(“MS”) and
(“COMPANY”) dated (“Agreement”), is made and entered into
this 31st Day of January, 1995.

The parties agree to ammend the Agreement as follows:

1. The Agreement mentioned shall be extended for a period of three (3) months
starting January 31,
1995 and ending April 30, 1995.

2. In the event of inconsistencies between the Agreement and this Amendment, the
terms and
conditions of the Amendment shall be controlling.

IN WITNESS WHEREOF, the parties have executed this Amendment to the License
Agreement as of the
date set forth above. All signed copies of this Amendment to the License
Agreement shall be deemed
originals. This Amendment does not constitute an offer by MS. This Amendment
shall be effective upon
execution on behalf of COMPANY and MS by their duly authorized representatives.

MICROSOFT CORPORATION
[signature]
By

Kathleen P. Graves
Name (Print)

OEM Group Manager
Title

0-1-95
Date

ZEOS INTERNATIONAL LTD

[signature]
by

Judi Larkin
Name (Printed)

VP Administration
Title

1/31/95
Date

Signed Original

Microsoft License No.
4934-0130

MSC 5007875
Highly Confidential

PLAINTIFF’S
Exhibit 1309
C.A. No. 2:96CV645B

MS-PCA 1194018
CONFIDENTIAL

PXE 4490

Gist: Joachim Kempin pressures along with Gates for labelling computers “Windows”

PLAINTIFF’S
EXHIBIT
4490
Comes v Microsoft

From: Joachim Kempin
Sent: Tuesday, August 27, 1996 11:34 AM
To: Marshall Brumer
Subject: RE: Intel payments for logo usage

they continue to play hardball.

From: Marshal Brumer
Sent: Monday, August 26, 1996 9:03 AM
To: Joachim Kempin
Subject: FW: Intel paymentsd for logo usage

do you know the status of this? it is coming up in the press now.

From: Bill Gates
Sent: Sunday, June 09, 1996 10:11 PM
To: Joachim Kempin
Cc: Paul Maritz; Marshall Brumer; Rich Tong; Jonathan Roberts; David Heiner
Subject: Intel payments for logo usage

I decided to send this issue to a small group

Intel pays out about $500M per year in advertising incentive money for people to
use their logo. It is serious money.
When Compaq decided to join the program it cost them a lot. They sort of hope
IBM doesn’t join since that would also
cost them a lot.

They have adopted a policy that if there is more than one logo then they pay a
lot less. I told Andy that they should just
reduce payments after 2 logos (theirsd and one others). He tried to say the
lawyers though that was a problem and I
told him that was real nonsense since they wouldn’t be saying anything about the
second logo and whose it is. He said
he is the decision maker on this issue. He said he will talk to the lawyers
again. I told him I didn’t want him to hide
behind the lawyers since dropping payments after 2 is certainly as open as
dropping payments after 1. We may have
to get our lawyers to talk to their lawyers at some point. Joachim – go ahead
and talk to Ottelini. If we can’t get it
structurte this way I will want the lawyers to give their opinion and I will
make one more appeal to Andy.

If it turns out we can’t get this solved I have another idea. Itsd an idea that
might make sense even if the logo thing
stays intact. We could use MDA incentive to convince Oems to refere to the PCs
they license Windows on as
WindowsPC’s rather than IBM compatible. We could incent them to use this
designation sort of like we do the logo. If
we were successful the world would change the way it talks about PCs to
WindowsPCs.

MS-PCA 2618927

HIGHLY CONFIDENTIAL

PXE 5045

Gist: Pricing of Windows debated internally

Message 27:
From russw Thu Jun 8 13:20:21 1989
To: richab
Subject: price increase for retail
Date: Thu Jun 8 13:17:56 1989

I haven’t done anything with this. I had sent you some mail suggesting
that we add on an explanation of our run-time policies and
how they may relate to the pricing decision i.e. when do we
drop it if ever? before proceeding.

we should wrap this up soon since it was important for the oem
pricing justification to our oem customers

thx

From richab Fri May 26 19:02:15 1989
To: russw
Subject: Windows /286: Recommended SRP change
Date: Fri May 26 19:00:11 1989

Russ: I’d like to propose that we raise the SRP of Windows /286 from $99
to
$129 at version 3.0. There are several reasons behind my proposal:

1. I do not believe that consumers are sensitive tto pricing differences
in the $50 to $99 range (demaind is inelastic in this range). A #$129
SRP ensures that Windows /286 will typically appear on the street un
der
$99

2. At ~$99 on the stree, Windows /286 3.0 is an incredible value. The
applications alone are worth a great deal more. All of the great
applets PLUS a great shell PLUS breaking the 640K barrier…need I
say more.

3. The extra $15 in revenue we’ll receive as a result of this price cha
nge
will really help us in the cogfs as a % of revenue area. This is
particularly important when you consider the effect that the probable
Asymetrix OpenBook bundle (est. cogfs impact +$1.50 for 5.25″, +$2.75
for 3.5″) on these skus profit margin. In additional, the promotional
bundle gives us an additional rationale (in the buyers mind) for the
increase.

4. Finally, without this increase, it will be much more difficult to get
oem customers to sign deals for Win 286 at our new pricing levels
during the interim period before DOS+Win becomes a reality.

In summary, I don’t thing it will be a big deal to the consumer and it
will makea positive difference in our profitability as well as the prices
we settle with our oems on.

rich

10127914

RESTRICTED
CONFIDENTIAL
Plaintiff’s Exhibit
5045
Comes V. Microsoft

Exh 5 Date
Witness
Zusan Zielie

MS-PCA 2433829

HIGHLY
CONFIDENTIAL

PXE 5055

Gist: Discussion about competitors who can be broken apart by Microsoft. “Do you really want to penalize users for using Microsoft software?”

From philba Wed Sep 13 08:40:37 1989
To: celestb danbo greglo jodys marcw mikedr richab
Subject: Re: Limulator technology: spread it around?
Date: Wed Sep 13 07:31:42 1989

’cause we’re big bad microsoft and we LIKE to stomp the
daylights out of the little guys.

seriously — we shouln’t try to crush these guys — let them
upgrade their products to be compatibly with ours. Give them
the info they need. Even say nice things aboubt the good ones.
However, I don’t want to put any development effort into
making it easier for them.

Sender: mikedr Tue Sep 12 20:29:17 1989
To: celesteb danbo greglo jodys marcw philba richab
Subject: Re: Limulator technology: spread it around?
Date: Tue Sep 12 20:26:54 1989

I disagree with Greg. Our goal is not to drive limulator vendors
out of business. If someone besides Microsoft is able to deliver
great functionality to our users, why should we stand in the way
of them using it? Do you really want to penalize users for
using Microsoft software?

Sender: greglo Tue Sep 12 20:22:19 1989
To: celestb danbo jodys marcw mikedr philba richab
Subject: Limulator technology: spread it around?
Date: Tue Sep 12 20:20:43 1989

Need a policy on whether we want to allow other
people to modify their limulators so that they
will work with Win386 just as well as our own
EMM386.SYS (i.e. let win386 take over their open
emm handles while we aere running, to support ems
using memory resident programs). Do we document
our interface in the DDK?

One could say that there is no reason that various
OEM limulators or 386MAX shouold not work with us.
On the other hand, maybe we want to kill them.

My opinion right now is that there will be no
reason for a person not to use EMM386 with Win386 3.0.
Sure 386MAX has additional nifty keeno features, like
mapping upper memory blocks, but they can’t use those
features with Win386,. All the features they could use
with Win386 are already provided by EMM386. So maybe
we want to keep things simple and tell themn always
use EMM386, and throw away the competitors?

X 567486
CONFIDENTIAL

EXH 6
DATE
WITNESS
SUSAN ZIELIE

Plaintiff’s Exhibit
5055
Comes v. Microsoft

PXE 5176

Gist: “So, rest assured, MS Apps isn’t going to boast of how it’s monopolizing all the Win Computing resources, but will aslo probably point the way to the Windows group for a supporting quote.”

From richab Mon Oct 15 12:34:35 1990
To: w-clairl w-connib
Subject: apps office product
Cc: kathrynh
Date: Mon Oct 15 12:34:35 1990

I continually take heat, some of it deserved, most not for the church vs.
state issues. Win computing is viewed negatively by most isvs since
there is not (in their opinion) a significant isv component. We do
not (yet) have a strong win isv program to counter this either.

It is very important in all isv issues that you consider that the very best
we can do with isvs is to have them feeling neutral about us. they will
never love us.

rich
(****
>From w-connib Mon Oct 15 08:10:25 1990
To: richab w-clairl
Subject: apps office product
Cc: kathyrnh
Date: Mon Oct 15 08:00:42 1990

Sorry, I’ve been out for awhile, but wanted to respond to your earlier mail
about the MS Office for Windows and whether we’d get heat for giving
preferential treatment to MS Windows aps. I haven’t heard much more from the
press but I know that various people at MS have asked me if this is an issue.
So I’ve been meaning to ask you, Rich, if other ISVs are complaining about
Windows Computing promo or the Win Office.

We should have a consistent response from the Apps group and Windows group but
I would rely heavily on the Windows group to show that other ISV’s are still
happy and that they are helping all ISV’s. Can we point to any new programns
being offered to other ISV’s as a result of Windows Computing push?

So, rest assured, MS Apps isn’t going to boast of how it’s monopolizing all
the Win Computing resources, but will aslo probably point the way to the
Windows group for a supporting quote.

X 566829
CONFIDENTIAL

Plaintiff’s Exhibit
5176
Comes V. Microsoft

PXE 6871

Gist: Mike Moskowitz on Windows Media Player

EXHIBIT
87a
LANE

burst.com

Board of Directors Meeting: 11/1/00
Product Marketing & Business Development Report

Product Marketing Status

* Live Status – The Alpha release has been successfully deployed at InterZest in
Korea as of the
first week of October – the Beta release has been pushed out to mid-January – a
2 month slip
from engineering – the slip is due in part to a poor development job by one of
their contractors.
* Product Roadmap : Based upon the new Business plan delivered last week by
doig, a first draft
of Product Roadmap has been laid out (attached).
* New Windows Media Player Bridge was released October 19 – this is the product
I described at
the end of August to the Board — it successfully combines WMP6, WMP7, with full
support for ASF, WMA, MPEG, inlcuding seek forward/backwards. We are now
totally up-to-date for WMP
on our current product release.
* Promo CD – A promo CD has been released for use at tradeshows.
* ROI/TCO Research work finishes this week – this work is near completion and
shows Burst in
a very positive light (performance over the internet, and network efficiency)
vs. the current
server from Microsoft

Business Development

Apple – Based upon positive discussions held at QuickTime Live, we will be
meeting with Apple to
disucss, amongst other items, embedding Burst into their player. This will
likeley accelerate our plans
around the Burst plug-in for the Mac QuickTime Player.

Real Networks – Real has rejected our 2 proposals:
* to be a VAR for their server, which would allow our server to talk to their
server, and
* to creat a Burst Caching server, wherein we cache streams from a central Real
server and burst
it from the edge.

Note that it is my belief there are 2 reasons for this rejection:
* Our positioning – we still have “Why Stream When You Can Burst” on
our main web page. We
have positioned ourselves as direct competitors to them – and to Microsoft, as
well – so it isw hard
for them to see us as partners.
* Our sales – or lack thereof. It is extremely difficult to put together a
convincing story of how
much added revenue they would receive by partnering with us, since we are not
currently
recording any significant revenues from our product.

AOL/Winamp – We have declined the AOL offer due to lack ofa compelling
pay-performance
guarantee for client downloads.

Mike Moskowitz
Vice President, Business Development and Product Marketing

Confidential Page 1 10/23/00

Confidential

Plaintiff’s Exhibit
6871
Comes V. Microsoft

BUR5147894

3p-DEPEX 005523

PXE 7582

Gist: DR DOS 5.0 correspondence

#1

EGGHEAD Discount SOFTWARE

Mr. Jonathan Freeman
Digital Research
660 South Glassell
#106
Orange, CA 92666

May 16, 1991

Dear Jonathan:

I appreciate your continued interest in Egghead Discount Software as a
distribution source for DR DOS 5.0. The summary that you provided
was informative and beneficial. Thanks for your input.

Unfortunately, I will not be able to further evaluate the addition of DR
DOS 5.0 to the Egghead mix for several months. Our internal
promotional priorities have been established and I have concluded that it
would not be in Egghead’s best interest to move forward on this issue at
the current time.

I would like to leave the door open for further consideration and I would
be happy to re-open the discussion in late July or August. I look forward
to meeting you personally.

Best regards,

[signature]
Rod W. Brooks
Senior Vice President
Marketing/Merchandising

CC: Bill Pickard

22011 S.E. 51st Street. P.O. Box 7004. Issaquah, WA 98027
(206) 391-0800. FAX (206) 391-0880

WS113511
Plaintiff’s Exhibit
7582
Comes V. Microsoft

PXE 7739

Gist: Bill Gates and Joachim Kempin planning price hikes

Bill Gates

From: Joachim Kempin
To: Bill Gates
Cc: Bob Herbold; Steve Ballmer
Subject: RE: Oem price guidelines
Date: Friday, January 06, 1996 7:06 AM

The goal You set was 20% average above current prices. Iam very confident we
will achieve this. Let’s
take a global look of what has changed:
1. we will get reports monthly and pad monthly. this will improve our cashflow.
2. we will gain some more by having progressive pricing.
3. we modelled the new PGL based on effective prices which are below the current
PGL – as I showed You
in our price discussion. these icreases leave should yield 25% increases on
average thus leaving some room for negociaton.
4. I do not expect all companies to fullfill their MDA targets giving us better
prices.
5. The current plan call for volume pricing of the WIN 95 units only, without
combining total volume. This again leads to higher prices.
All in all we have enough room to achieve the 20% higher target.

—–

From: Bill Gates
To: Joachim Kempin
Cc: Bob Herbold; Steve Ballmer
Subject: Oem price guidelines
Date: Tuesday, Jamuary 03, 1995 9:12 PM

I have been studying this thing a little bit.

I am sure you understand how it relates to you goal of raising our revenue per
PC.

On the surface I see the following: (I am excluding here international markup
$6.50 => $6 and hard disk
install discount ($1.50)=>($1)

Volume level: Lowest 400-600 Highest
Dos6.22+tools 27 20.25 18.25
Windows+Wfw 50 34 28.50
All 4 old prdcts 77 54.25 46.75

W95 w/o MDA 75 58 53.25
W95 w/full MDA 55 45.65 41.80

Without knowing whether we will be charging closer to list price than we have in
the past and expecting
that a lot of people will get the full MDA it looks on the surface like not only
will we not get our goal of
20% or so per unit increase with the incredible innovation of Win95 but we will
acxtually get less. For a
customer who didn’t buy Wfw this would be true but a high percentage did buy
it.

Are we going to achieve our goal of increasing revenue as we hope? Of course
Compaq will not have to pay anything new but I think they are the only ones who
get a carry over.

On the surface it looks like prices are going down!

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