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Microsoft Corp.

Microsoft Executive Denies "Cutting Off Netscape's Air Supply"

Strategic Insights

— 2 min read

A senior Microsoft executive has denied a long-quoted phrase about his company's aggressive stance towards Netscape Communications Corp. Paul Maritz, Microsoft's highest-ranking official set to testify in the company's antitrust trial, made the denial as the trial continued in Washington. Maritz stated that Microsoft's primary concern was not Netscape, but rather Apple Computer Inc., which was facing a change in leadership and faltering marketing prospects in 1997. According to Maritz, Microsoft aimed to secure a cross-patent licensing agreement with Apple to prevent Microsoft's patents from becoming worthless if Apple went out of business.

Key Takeaways:

  • Microsoft executive Paul Maritz denied ever saying the company would "cut off Netscape's air supply," contradicting a long-held perception about Microsoft's aggressive stance towards Netscape.
  • Maritz testified that Microsoft's primary concern in 1997 was not Netscape, but rather Apple Computer Inc., which was facing a change in leadership and marketing struggles.
  • Microsoft aimed to secure a cross-patent licensing agreement with Apple to prevent its patents from becoming worthless if Apple went bankrupt.
  • Microsoft chairman Bill Gates sent several emails to Maritz stressing the importance of having Apple drop Netscape and adopt Microsoft's Internet Explorer as the default browser for Macintosh operating systems.
  • The e-mails seem to contradict Maritz's testimony that Apple's distribution of Internet Explorer was not a key part of their discussions, leading to the signing of a comprehensive deal with Apple in August 1997.
  • Microsoft announced a planned two-for-one stock split, which will be effective March 29 to shareholders of record March 12.
  • The stock split requires approval from shareholders at a special meeting scheduled for March 12.
  • Microsoft's stock price rose $5.75 to $162 in afternoon trading, making it the most active issue on Nasdaq.

Statistics:

  • Microsoft's stock price rose by $5.75 to $162 in afternoon trading.
  • The company's stock was the most active issue on Nasdaq.
  • Microsoft's planned two-for-one stock split will be effective March 29.
  • Shareholders of record on March 12 will be eligible to receive the split.
  • The stock split requires approval from shareholders at a special meeting scheduled for March 12.

Sources:

  • "Microsoft Exec Denies Quote" by an unknown author at Microsoft (no date)
  • "Patents, Not Netscape, Were Main Worry" by an unknown author (no date)
  • "Microsoft's Maritz Testifies" by David Boies, quoted by a Microsoft company spokesperson (no date)
  • "Netscape Calls Microsoft Suit 'a Sham'" by an unknown author at Netscape Communications Corp. (no date)
  • "Microsoft to Split Stock" by an unknown author (no date)
  • "Microsoft's Stock Soars" by an unknown author (no date)

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