Microsoft suffered videotape Bombshell II, the sequel, in its antitrust trial.
In a turn of events that absolutely stunned the courtroom, the US Government was able to show -- beyond all doubt -- that Microsoft had used multiple PCs to film a videotape segment the company had initially implied was a seamless segment filmed on one PC. The company had shown the videotape as evidence in court yesterday, as part of its defense of the US Department of Justice's antitrust lawsuit.
David Boies, the lead government attorney, pointed to a number of places in the 4-minute segment that showed possible discrepancies.
But the knockout punch was a missing icon for Microsoft Outlook, a scheduler and e-mail program, that appeared on one Windows screen in the video but wasn't evident in another segment.
The videotape segment purported to show delays in the Windows operating system caused by a browser-removal program written by Princeton University computer scientist and government witness Edward Felten. Microsoft wants to show that the browser is an integral part of the operating system, and its removal cripples the OS; the government aims to show that Microsoft simply bundled the browser with the OS in a bid to dominate the browser market.
The courtroom revelation left James Allchin, Microsoft's chief technical witness, stammering for an explanation, and drew harsh words from Judge Thomas Penfield Jackson, who held his head in his hands at one point.
"How can I rely on it (the tape) if you can't tell me it's the same machine?" asked Jackson.
"It's very troubling," said Jackson, adding that he would have felt a "little better" if Allchin had made the test himself.
"I made the test," said Allchin.
"But that's not what I'm seeing here," said Jackson.
At another point, Jackson said the discrepancies "cast doubt on the reliability -- the entire reliability" of the videotaped demonstration.
As soon as Boies finished, Microsoft attorney Steven Holley immediately asked for a bench conference with the judge.
Microsoft officials later said that they had reached an agreement, approved by the judge, to film a new test of Felten's program. The filming will be witnessed by government attorneys and played in court.
Allchin appeared completely shaken by the attack on the tape.
At one point he insisted there was only one machine, but at another point -- when the evidence was overwhelming -- he said there must have been multiple machines.
Outside the courtroom, William Neukom, Microsoft's vice present for legal affairs, acknowledged the mistakes.
"We make very good software; we didn't make a very good tape, but the point is still there," said Neukom, who insisted that the tape would show problems with the Windows operating system after Felten's program was run.
But Allchin's problems on the witness stand went beyond the tape.
Boies challenged Allchin's contention that he had sought to integrate the browser with the operating systems to bring user benefits.
Boies repeatedly asked Allchin to explain statements in a series of company e-mails that pointed directly to concerns about Netscape Communication, such as a 1995 memorandum he wrote to Paul Maritz, group vice president, about his "concerns for the future".
"Ensuring that we leverage windows. I don't understand how IE is going to win," wrote Allchin. "My conclusion is we must leverage windows more," he wrote.
The government case rests in large part on its charge that Microsoft is illegally "tying" one product, the browser, to another product, the operating system, to crush its browser competitor, Netscape. Allchin, and other Microsoft officials, deny that was their motivation.
Allchin, facing questions from Boies about what he meant by using Windows as leverage against Netscape, continued to insist that Microsoft's goals were broader. He dismissed the e-mail language "as very terse communications" that left out a lot.
As damaging as the e-mails were to Allchin's defense, at no point in this trial has Microsoft suffered a blow as severe as it did today -- when it ultimately admitted a mistake.
That admission came after Microsoft had spent last night trying to control the damage caused by the government's initial discovery of a discrepancy in the tape on Tuesday.
Government attorneys caught something on tape that Microsoft missed. When Felten's program ran it changed a title bar. But the video demonstration used in court didn't show the telltale title bar change, prompting Boies to accuse Allchin of presenting inaccurate evidence and misleading the court.
But under today's redirect questioning from Microsoft attorney Steven Holley, Allchin said he had met with his team members overnight and had run a number of tests into the early hours.
"How early?" asked a grinning Judge Thomas Penfield Jackson.
"Pretty early," responded Allchin.
In the course of testing Felten's program, Microsoft installed and removed other software programs to determine how the browser removal program affected them. One of the programs tested by Microsoft was software from US ISP Prodigy Internet services.
When the Prodigy software was removed it reset a software "key" that returned the title bar to a default message different from the one that appeared when Felten's program was running, according to Allchin.
Until this afternoon's testimony, Microsoft officials believed they had adequately explained the problem.