Microsoft Presents Secret Email to Refute Antitrust Claims

Netscape's chairman, James Clark, wrote a email to Microsoft in December 1994, offering to collaborate with the company and suggesting a potential investment in exchange for cooperation. This email was introduced in court as part of Microsoft's defense in the antitrust suit, with the aim of refuting the Government's claims of predatory conduct. The email's authenticity was corroborated by Netscape's president, James Barksdale, who testified that he was unaware of the email until it was brought up in court. Clark's email was seen as a desperate attempt by Netscape to secure an investment and cooperation from Microsoft, rather than a genuine business plan.

Key Takeaways:

• The email was written by James Clark, Netscape's chairman, on December 29, 1994, and was submitted in court by Microsoft as part of its defense in the antitrust suit.
• Clark's email offered Microsoft cooperation and suggested a potential investment in Netscape, stating that "we want to make this company a success, but not at Microsoft's expense."
• The email was introduced by Microsoft to refute the Government's claims of predatory conduct, specifically the alleged offer to divide the market for software used to browse the Internet's World Wide Web.
• Clark's email was written during Netscape's precarious start-up phase, before the company had begun to make significant sales, and when Clark's $5 million investment in the company was dwindling.
• Barksdale testified that Clark told him about the email and its rejection by Microsoft in the summer of 1994, but described the email as a "sales ploy" rather than a genuine business plan.
• Microsoft also introduced a portion of Clark's pretrial deposition to show that Netscape was aware of Microsoft's intention to bundle its browser with its Windows operating system as early as the fall of 1994.
• This is significantly earlier than the Government claims, and suggests that Microsoft's actions were potentially motivated by a desire to integrate the browser with the operating system rather than undermine Netscape.
• Clark's testimony also suggested that Netscape's business model did not vary significantly from Microsoft's, including the distribution of the browser at no cost to users but with the aim of encouraging adoption and subsequent sales of software packages.

Statistics:

• $5 million: The amount of Clark's investment in Netscape that was dwindling at the time he sent the email.
• December 1994: The date on which Clark sent the email to Microsoft.
• June 1995: The date on which the Justice Department says Microsoft made its illegal offer to divide the market with Netscape.
• Fall 1994: The time at which Microsoft allegedly discussed bundling the browser with the operating system.
• October 1994: The month in which William H. Gates, Microsoft's chairman, allegedly discussed bundling the browser and operating system at an industry conference.

Sources:

• "Competing on Internet Time: Lessons from Netscape and Its Battle with Microsoft" by Michael Cusumano and David Yoffie (book)
• James Barksdale, president of Netscape (testimony)
• James Clark, chairman of Netscape (email)
• William H. Gates, chairman of Microsoft (quoted in Clark's pretrial deposition)