MS/DoJ: Exec admits Intuit deal

A Microsoft executive conceded on the witness stand that his boss, Bill Gates, said Intuit must use the company's Internet browser in exchange for a prime position on the desktop of the Windows operating system.

The government has alleged from the beginning of its antitrust case against Microsoft that the company used favourable placement on the market-dominant operating system desktop to convince content providers, Internet service providers and independent software vendors to forgo business relationships with Netscape.

William Poole, senior director of business development for Windows, became the first company official to concede that there was a quid pro quo in the company's agreement with Intuit to place that company's Web site on the Windows 98 Channel Bar, or "active desktop". Content providers, including Intuit, clamoured to enter into "platinum agreements" with Microsoft to create channels, cross-promote products and win distribution on every PC desktop. At the same time, Microsoft placed a condition on such agreements that limited their relationships with Netscape.

"The terms for participation at the top level had limitations on how they could market other browsers," Poole said, adding that "Netscape was the primary one."

He declined to agree with the characterisation of US Justice Department lawyer David Boies that Microsoft ordered companies that won placement on the channel bar to give up business relationships with Netscape. Intuit's chief executive, William Harris, testified at the trial that Intuit was required to "forgo any business relationship with Netscape" in exchange for a desktop placement that he said was "critical" to the success of its Web sites.

"I take exceptions when you say ‘cease working with Netscape,'" Poole said. "I would never have said that nor would I have said Bill Gates said that, because he didn't."

During Poole's cross-examination, which started yesterday morning, he conceded that he once estimated the channel bar could bring in $US100 million in revenue for Microsoft. Poole added that it was a rough estimate, as it dealt with the then-new "push" technology, and that the estimate turned out to be completely wrong as Microsoft later decided not to charge for placement on the channel bar. Company officials now say the channel bar is unlikely to be included with subsequent versions of the Internet Explorer browser or Windows.

Poole, Microsoft's fifth witness on the stand in the trial that has entered its 15th week, was the company executive in charge of negotiating placement on the channel bar. He summed up a 1997 agreement with Intuit in an e-mail to a colleague this way, "Bottom line: we give then a fairly standard 2nd bar platinum ICP deal for IE4 and they … ship IE3 and IE4 preferentially and in a big way starting with Quicken 98…."

The agreement with Intuit capped negotiations that were underway for many months, in which top Microsoft executives, including chairman and CEO Gates, were trying to convince Intuit to design products, such as Quicken, with IE instead of Netscape's browser. In a July 24, 1996, e-mail from Gates that was displayed in court yesterday, Gates tells subordinates that he had discussions about that with Intuit's then chairman Scott Cook. "I was quite frank with him that if he had a favour 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," Gates wrote.

When confronted with the e-mail, Poole said Microsoft's chairman and chief executive was simply trying to tout his company's products. "Mr. Gates is saying that our technology is advanced and the Netscape browser is an inferior product," Poole said. "But I'm perhaps not an expert at interpreting his words."

Boies jumped on that statement outside the courthouse, telling reporters, "I think it is, in economic terms, a bribe. In other terms, it is an inducement."

Microsoft spokesman Mark Murray said that he was "shocked" at the allegation and that the 1996 negotiations over the IE browser never came to fruition because Intuit was in the process of shipping its Christmas supplies to stores using the Netscape browser. "They had put some costs into product development," Murray said of Intuit. He said that the million-dollar offer was "to compensate Intuit for those costs."

During his cross-examination Monday afternoon, Poole was confronted with contracts that Microsoft signed with several contract providers in which Microsoft required "differentiated" content to be developed for use with IE exclusively. Under the 1997 contract with Intuit, Microsoft specified that "some differentiated content may be available only to IE users, some may simply be ‘best when used with IE,' with acceptable degradation when used with other browsers."

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.
Show Comments


James Cook University - Master of Data Science Online Course

Learn more >


Victorinox Werks Professional Executive 17 Laptop Case

Learn more >

Sansai 6-Outlet Power Board + 4-Port USB Charging Station

Learn more >



Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?