Microsoft: Everybody's Doing It

Redmond lawyers grill AOL about a proposed market-sharing deal with Netscape

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WASHINGTON: Maybe everybody else is doing it. In court on Thursday, Microsoft backed up its defense of divide-and-conquer tactics by showing that AOL and Netscape appeared to be up to the same thing -- just months after an alleged share-the-market meeting between Netscape and Microsoft. Cited: An internal AOL document describing a multimillion-dollar offer to Netscape to license its browser software and "create a vision to compete with Microsoft" -- in exchange for Netscape's staying out of AOL's online service business.

"Isn't that a market division proposal?" Microsoft attorney John Warden asked AOL senior vice president David Colburn in court. "What it seemed to me to be was a strategic partnership," hedged Colburn, who then backed up the government's case by testifying that in 1996, AOL chose Microsoft's browser over Netscape's because of its vast distribution on the Windows desktop. Oh, yeah --and rather than being paid for its software, Microsoft paid AOL $500,000 to distribute its browser. It was a deal that AOL couldn't refuse.