MS/DoJ: Microsoft lawyer grills Intel witness

Microsoft began its cross examination today of the Intel executive who has accused the software giant of pressuring it to drop a technology that would have improved the PC's multimedia capabilities.

Steven McGeady, an Intel vice president, has testified that the company abandoned its work on native signal processing (NSP) software after Microsoft applied pressure on equipment manufacturers not to adopt it. McGeady has claimed that the technology would have improved the speed and reliability of multimedia applications.

Through his questions this afternoon, Microsoft attorney Steven Holley sought to raise issues with McGeady on the relationship the two companies had and the quality of NSP software.

Under grilling from Holley, McGeady gave very little ground. Sitting straight up in his chair and speaking evenly, occasionally drinking water, he quoted Intel Chairman Andy Grove saying, "We caved .... under pressure from Microsoft."

In response to questions from Holly, McGeady said that NSP had been prepared to work with Windows 3.1.

Holley then introduced a memo from Grove to Gates in which Grove said it had been a mistake to target NSP at Windows 3.1. McGeady said that in retrospect he agreed, but explained that Windows 95 was suffering from delays and it was uncertain whether it was going to be ready in time.

Holley took McGeady through a line of questions which sought to probe the problems that NSP might have created in the Windows operating system, and asked what the demand for NSP was from manufacturers. But McGeady said the issue was somewhat moot, since Microsoft had convinced manufacturers not to adopt NSP and therefore the demand for it was quite low.

Asked why Intel didn't tell Microsoft about NSP early in the development of the technology, McGeady said that the company feared that if it told Microsoft too early about what it was doing Microsoft would "bad-mouth the product".

"It was the fear that was ultimately realised ... that Microsoft would stomp it out of existence," McGeady said.

Holley brought McGeady through internal Microsoft documents that evaluated the NSP technology and which raised a number of issues about the software, but McGeady dismissed most of it as Microsoft posturing: "The rest of this is 'my dog is better than your dog.' "In questioning by David Boies, the lead government attorney in the antitrust trial, McGeady this morning covered a number of points about Microsoft's efforts to pressure Intel to stop developing software that Microsoft saw as competing with the Windows operating system. Perhaps the most striking moment of the questioning came when Boies replayed a portion of Microsoft CEO and chairman Bill Gates' videotaped testimony in an apparent effort to show that Gates was not telling the truth.

The portion of the tape which was played yesterday, had Boies asking Gates, "Did Microsoft make any effort to convince Intel not to help Sun and Java?" Gates, looking down at his desk and rocking gently back and forth, paused for 30 seconds before answering: "Not that I know of."

After replaying that portion of the tape this morning, Boies then turned to a memo written by Gates in June 1996, to a Microsoft senior vice president, Paul Maritz, in which Gates discussed Java development efforts.

Then Boies turned and asked McGeady the same question that he had put to Gates on whether Microsoft had made an effort to convince Intel not to help Sun Microsystems on Sun's Java software. McGeady replied: "Repeatedly and on multiple occasions."

McGeady testified that a Microsoft official had told Intel that Microsoft "owned software to the metal."

"They felt that they had control of all the software above the hardware," he said.

McGeady explained that Intel had been trying to develop device drivers -- which among other tasks manage peripheral devices -- that would work independently of the operating system. "They told us we had no business writing software at that level," he said.

Microsoft also pressured Intel not to develop a Java implementation that was modeled after Sun Microsystems' development of the language, according McGeady.

Boies introduced an April, 1996 memo from Paul Maritz, Microsoft senior vice president, to Gates, in which he wrote: "We need Intel to realise that ActiveX is best antidote to Sun/Java . . ." ActiveX is Microsoft's answer to Java.

Maritz also wrote this about Intel in that memorandum: "In general they see Sun/Java as their big issue since Sun is not only trying to hijack the OS (operating system) but the chip as well. I explained our strategy of 'optimising' Java for ActiveX and Windows, and how we should be working together on this, but I fear that McGeady will try to obviate this (unfortunately he has more IQ than most there)."

McGeady, in his testimony this morning, said Microsoft viewed Intel's Java effort as a threat. Microsoft "wanted us to stop, they considered it competition."

Boies also introduced notes McGeady had taken during a meeting at which Gates spoke in July 1995, and which McGeady had attended. In his notes, McGeady quotes Gates as saying "This antitrust thing will blow over."

According to the notes, Gates added: "We may change our e-mail retention policy."

When that last statement was read the courtroom erupted in laughter.

During a court session break today, Microsoft spokesperson Mark Murray said the government's use of McGeady's notes was "merely an effort to engage in further personal attacks against Bill Gates."

And regarding Microsoft's e-mail policies, Murray said Microsoft has turned over several million documents to the government. "You would hope that the government would be able to find something to take out of context and hang their hat on."

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