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Government Uses Gates E-Mail to Confront Witness
By Ted Bridis  Associated Press
WASHINGTON — The government used a blunt e-mail from Microsoft Chairman Bill Gates to challenge a witness who insisted Tuesday that the company did "absolutely not" offer money to Intuit Inc. to distribute Microsoft's Internet browser software.

William Poole, who negotiated some of Microsoft's Internet deals, testified that it never offered executives at Intuit any money to distribute its browsers over one from rival Netscape Communications Corp.

Intuit, whose popular Quicken financial software is used by roughly 10 million people, agreed in June 1997 to give away Microsoft's browser, not Netscape's, with Quicken. In exchange, Microsoft gave Intuit prominent placement of its finance services within the Windows computer operating system.

The government alleges the deal is an example of illegal exclusionary agreements that Microsoft brandished as part of its campaign to "crush" rival Netscape.

In previous interviews with government lawyers, Gates dismissed the Intuit deal, saying it "certainly wasn't something that could have been very significant to me because I don't have a recollection of it."

Justice Department lawyer David Boies cited a July 1996 e-mail printout from Gates again Tuesday describing a conversation with Scott Cook, Intuit's founder.

Gates wrote that he was "quite frank with him that if he had a favor we could do for him that would cost us something like $1 million, to do that in return for switching browsers in the next few months I would be open to doing that."

Poole testified previously he hadn't seen the Gates e-mail, but acknowledged he had no reason to doubt it was true.

"Who are you going to believe?" Boies asked reporters outside the courtroom. "Your own eyes, or what they say?" Boies on Monday described the Gates offer as "in economic terms, a bribe, an inducement."

Microsoft explained that Intuit was already working with Netscape in 1996 and said Gates was merely offering financial help to cover its costs in switching technologies.

"I don't think there's any discrepancy at all," Microsoft spokesman Mark Murray said Tuesday.

Intuit's chief executive officer, William Harris, testified previously for the government.

Poole portrayed Microsoft's Internet agreements Tuesday as "very common among many different industries," and called them exclusive "only in the broadest sense."

He compared them, for example, with agreements between The Walt Disney Co. and McDonald's Corp. to promote movies with hamburgers.

"You won't find Disney characters in Burger King kids' meals," Poole said.

Boies also confronted Poole with e-mail from Disney complaining in October 1997 about restrictions that Microsoft had placed on its business deals with Netscape.

In the e-mail, a Disney executive wrote: "We are being roughed up by the 1,000-pound gorilla of the industry." Microsoft was upset that Disney had allowed Netscape to use its familiar mouse logo.

"I find it somewhat ironic that the King Kong of content would be worried about a 1,000-pound gorilla," Poole shot back.

The trial, now in its 15th week, could be due for a lengthy recess next month. The case originally was expected to take six to eight weeks.

In a private meeting with lawyers, U.S. District Judge Thomas Penfield Jackson indicated he will call a break to allow Microsoft's lead attorney to keep his vacation plans and to permit Boies to attend another previously scheduled trial, expected to last two to three weeks.

But the judge told lawyers not to talk about it with reporters, according to a transcript of the meeting at the close of court Monday.

"Simply tell them that you have no comment about it because I have not made any definitive determination yet, other than the fact that you'll get your vacation," the judge told Microsoft lawyer John Warden. "And Mr. Boies will get to Philadelphia by March 15."

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