U.S. vs. Microsoft
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Deposition of Bill Gates
August 28, 1998, Part B, Page 3

On Wednesday, April 28, 1999, the official transcript of the
deposition of Microsoft Chairman Bill Gates was released.

	1	A	I'm not sure. 
	2 Q	Did you ever have any discussions with
	3	anyone about the development of J/Direct at or about
	4	the time it was being developed? 
	5			A	I don't think so. 
	6			Q	At the time that J/Direct was being
	7	developed, did you know that people were trying to
	8	develop J/Direct? 
	9			A	It's just a thunk. 
10			Q	My question is:  Did you know that they
11	were trying to develop this thunk? 
12			A	I doubt it. 
13			Q	Did you participate at all in any
14	discussions as to what alternatives there were to the
15	development of J/Direct? 
16			A	Before it was developed? 
17			Q	Let's start with before it was
18	developed. 
19			A	No, I don't think so. 
20			Q	What about during the time it was being
21	developed? 
22			A	I don't think so. 
23			Q	How about after it was developed? 
24			A	I don't think so. 
25				MR. HEINER:  We should take a break
	1	soon.
	2				MR. BOIES:  Okay.
	3				MR. HEINER:  Okay. 
	4				THE VIDEOGRAPHER:  The time is 
	5	2:02 P.M.  We're going off the record.  This is the
	6	end of Tape 3 of the videotaped deposition of Bill
	7	Gates. 
	8				(Recess.) 
	9				THE VIDEOGRAPHER:  The time is 2:16. 
10	We're going back on the record.  This is Tape 4 of
11	the videotaped deposition of Bill Gates on August 28. 
12			Q	BY MR. BOIES:  Let me show you a
13	document that has been previously marked as
14	Government Exhibit 378.  
15				(The document referred to was marked as
16	Government Exhibit 378 for identification and is
17	attached hereto.)
18			Q	BY MR. BOIES:  In the middle of the
19	first page there is a message dated May 14, 1997,
20	from Ben Slivka to you and others.  
21				Did you receive this e-mail on or about
22	May 14, 1997? 
23			A	I'm not sure.  But I have no reason to
24	doubt that I did. 
25			Q	When Mr. Slivka writes as he does in
	1	the second paragraph, "This summer we're going to
	2	totally divorce Sun," do you know what he's referring
	3	to? 
	4			A	I'm not sure. 
	5			Q	Did you ever ask him what he was
	6	referring to? 
	7			A	No. 
	8			Q	In the next to last -- or in the last
	9	sentence, actually, in the last sentence of the
10	second paragraph, Mr. Slivka writes that "JDK 1.2 has
11	JFC."  And is the JFC there the Java Foundation
12	Classes that you referred to earlier? 
13			A	It's one of the many JFCs. 
14			Q	What is one of the many JFCs? 
15			A	The one in JDK 1.2. 
16			Q	Is the JFC in JDK 1.2 part of what was
17	described as a major threat to Microsoft? 
18			A	I have no idea which JFC that sentence
19	written by somebody other than me referred to. 
20			Q	Well, the sentence written by somebody
21	other than you was written to you; right, sir? 
22			A	It was sent to me. 
23			Q	Yes.  And it was sent to you by one of
24	your chief -- one of your top executives; correct,
25	sir? 
	1			A	In an e-mail. 
	2			Q	Yes. 
	3				And that's a frequent way that your top
	4	executives communicate with you; correct, sir? 
	5			A	Yes. 
	6			Q	Now, Mr. Slivka here says that
	7	Microsoft is going to be saying uncomplimentary
	8	things about JDK 1.2 at every opportunity.  
	9				Do you see that? 
10			A	Where's that? 
11			Q	That is, "JDK 1.2 has JFC, which we're
12	going to be pissing on at every opportunity."
13			A	I don't know if he's referring to
14	pissing on JFC or pissing on JDK 1.2 nor do I know
15	what he specifically means by "pissing on." 
16			Q	Well, do you know that generally he
17	means by pissing on he's going to be saying and
18	Microsoft is going to be saying uncomplimentary
19	things.  
20			A	He might mean that we're going to be
21	clear that we're not involved with it, that we think
22	there's a better approach. 
23			Q	Well, as you understand it, when 
24	Mr. Slivka says he's going to be pissing on JDK 1.2,
25	as you seem to interpret it, at every opportunity, do
	1	you interpret that as meaning that Microsoft is going
	2	to be saying uncomplimentary things about JDK 1.2? 
	3			A	I told you I don't know whether pissing
	4	applies to JFC or JDK.  
	5			Q	Well, he's going to be pissing on or
	6	Microsoft is going to be pissing on either JDK 1.2 or
	7	JFC or both according to Mr. Slivka.  
	8				Is that at least fair? 
	9			A	That's appears to be what the sentence
10	says. 
11			Q	Yeah.  And as the chief executive
12	officer of Microsoft, when you get these kind of
13	e-mails, would it be fair for me to assume that
14	"pissing on" is not some code word that means saying
15	nice things about you, that has the usual meaning
16	that it would in the vernacular? 
17			A	I don't know what you mean in this kind
18	of e-mail. 
19			Q	The kind of e-mail that is sent to you
20	by executives in the course of your business, 
21	Mr. Gates. 
22			A	So all e-mails I get?  Ben Slivka's not
23	an executive.  
24			Q	All the e-mails you get from people
25	telling you that they're going to piss on competitive
	1	products, that's what I'm talking about. 
	2			A	I don't remember mail like that.  It
	3	looks like I got one.  But believe me, it's not a
	4	term that's commonly used. 
	5			Q	But you have no reason to think that he
	6	means it in any way other than the normal meaning of
	7	that term, do you, sir? 
	8			A	I think it's a term of multiple
	9	meanings.  In this case I think it means what you've
10	suggested it means. 
11			Q	I thought it did too, and I hope to
12	avoid asking you going through the actual language. 
13				And, Mr. Gates, let me show you a
14	document that has been previously marked as
15	Government Exhibit 377.  
16				The second e-mail here refers to what
17	is attached as a final copy of the memo that was sent
18	to you for Think Week in November 1995.  
19				(The document referred to was marked as
20	Government Exhibit 377 for identification and is
21	attached hereto.)
22			Q	BY MR. BOIES:  Do you recall receiving
23	this document, sir? 
24			A	No.  What I recall about this document
25	is that it's already been marked as an exhibit and
	1	that I spoke with Mr. Houck about it yesterday.  
	2			Q	That may be so.  My question to you is: 
	3	Do you recall receiving this -- let me make it
	4	simple.  
	5				Did you receive this memo in or about
	6	November of 1995? 
	7			A	As I said before, for my Think Weeks I
	8	get about three cardboard boxes of materials that
	9	people put together for me.  And in looking at this
10	memo, it's not a memo that I had seen before 
11	Mr. Houck's deposition questions put to me yesterday. 
12			Q	So it's your testimony the first time
13	you saw this document was when Mr. Houck showed it to
14	you yesterday? 
15			A	That's right.  It had a different
16	exhibit number then. 
17			Q	Let me ask you to go to page 5 of the
18	document which bears in the bottom right-hand corner
19	the Microsoft document production number ending 4683. 
20			A	Okay. 
21			Q	Do you see the heading "Shell
22	Integration"? 
23			A	Yes. 
24			Q	Do you see the second sentence where it
25	says, "We will bind the shell to the Internet
	1	Explorer, so that running any other browser is a
	2	jolting experience"? 
	3			A	I see that. 
	4			Q	Do you have any understanding as to
	5	what was meant by that? 
	6			A	I can guess. 
	7			Q	Well, first, this is in a memo that is
	8	entitled "How to Get 30 percent share in 12 Months";
	9	correct? 
10			A	Let's take a look.  Yeah, that's on the
11	first page. 
12			Q	And is it clear to you that that is
13	referring to getting a 30 percent share of the
14	browser market? 
15			A	I haven't read the document, but it
16	seems likely that's what it is. 
17			Q	Okay. 
18				Now, do you have an understanding --
19	I'm not asking you to guess.  But do you have an
20	understanding as to what is meant by the statement,
21	"We will bind the shell to the Internet Explorer, so
22	that running any other browser is a jolting
23	experience"? 
24			A	I don't know what he meant by it, but I
25	can tell you what it likely means. 
	1			Q	Okay.  I take it this is really how you
	2	would have interpreted this when you received it; is
	3	that fair? 
	4			A	I didn't read it, so --
	5			Q	I said if you had received it, this is
	6	how you would interpret it? 
	7			A	I said I didn't read it.  I actually --
	8	I would have read the whole memo if I had received
	9	it.  I wouldn't have turned to that one page and just
10	looked at that one sentence.  I would have read the
11	memo from the beginning page by page, and then I
12	probably would have understood it better than I do at
13	this moment. 
14			Q	If you do not have an understanding of
15	what is meant by it, you can tell me.  If you do have
16	an understanding of what is meant by it, I would like
17	to have it.  
18			A	I don't know what he meant by it, but
19	I'd be glad to guess as to what it might mean. 
20			Q	I don't want you to guess.  But if you
21	as the chief executive officer of Microsoft can tell
22	me how you would, in the ordinary course of your
23	business, interpret this statement, I would like to
24	have you do so. 
25				MR. HEINER:  Mr. Gates was prepared to
	1	do that quite a while ago.  That was an unnecessary
	2	exchange.  
	3			Go ahead.  You may answer. 
	4			THE WITNESS:  He may be referring to
	5	the fact that when you get a separate frame coming up
	6	on the win -- on the screen, it's different than
	7	having something take place in frame.  And part of
	8	our shell integration strategy going back all the way
	9	to 1990 included the idea that as you navigated or
10	browsed through different media types, you didn't
11	have to have another frame come up because that --
12	that's sort of an artifact of having to think about
13	applications instead of objects. 
14			And so as he looked at integrating the
15	browser and the shell together, we were going to
16	create a form of navigation optionally but as the
17	default where you don't switch frames as you navigate
18	the links from the shell to what's out on the
19	Internet back to what's in the local store. 
20		   Q	BY MR. BOIES:  Did anyone ever tell you
21	independent of this document in words or in substance
22	that Microsoft intended to bind the shell to the
23	Internet Explorer so that running any other browser
24	is a jolting experience? 
25		   A	Well, certainly the idea of integrating
	1	in a way that made a better browsing experience was
	2	something we were talking about quite a bit.  Those
	3	words, no, I never heard anything along the lines of
	4	those words. 
	5			Q	The words that are in this document; is
	6	what you're saying? 
	7			A	That's right. 
	8			Q	Okay. 
	9				Did Microsoft make any effort to
10	discourage Apple from writing in a JDK 1.2? 
11			A	That never would have come up.  Apple
12	is not an application developer. 
13			Q	Let me -- let me back up. 
14				Did Microsoft ever make an effort to
15	get Apple to discourage applications writers for
16	Apple's machines from writing in what you have
17	referred to as Sun's Java or using the Sun Java
18	runtimes? 
19			A	I'm sure there was discussion with
20	Apple about the fact that their unique operating
21	system capabilities wouldn't show through with the
22	least common denominator pure approach.  Whether that
23	related specifically to JDK 1.2 or not, I can't say. 
24			Q	When you say you're sure there were
25	discussions, are you talking about discussions
	1	between Microsoft representatives and Apple
	2	representatives? 
	3			A	Yes. 
	4			Q	What was Microsoft's interest in having
	5	Apple discourage applications writers for Apple's
	6	operating system from using Java runtimes or JDK 1.2? 
	7			A	We thought they might share the view
	8	that applications showing off unique operating system
	9	features was a good thing.  But -- 
10				MR. BOIES:  Could I have that answer
11	read back?  
12				(Answer read.)
13			Q	BY MR. BOIES:  Was there any other
14	reason, sir? 
15			A	No. 
16			Q	Did you have personally any discussions
17	with Apple with regard to trying to agree with Apple
18	as to the extent to which Apple and Microsoft would
19	compete with respect to Apple's QuickTime software? 
20			A	No. 
21			Q	Do you know if anyone from Microsoft
22	had such discussions with anyone at Apple? 
23			A	I know over a course of years we've
24	talked to them about what their plans are for
25	QuickTime, but that's all. 
	1			Q	Does Microsoft have software that
	2	competes with QuickTime? 
	3			A	Since QuickTime's a free runtime, you
	4	could answer that either "yes" or "no."  It's not a
	5	revenue source for Apple.  But there is an Apple
	6	technology that has some common things with some
	7	Microsoft technologies. 
	8			Q	Do you believe that QuickTime software
	9	competes with any software distributed by Microsoft? 
10				MR. HEINER:  Objection. 
11				THE WITNESS:  Depends on what you mean
12	"compete." 
13			Q	BY MR. BOIES:  Using that in the way
14	that you would ordinarily understand it in the
15	operation of your business, sir. 
16			A	No. 
17			Q	Did you make any effort or did
18	Microsoft make any effort to get Apple to agree not
19	to market QuickTime in any respect or to limit the
20	marketing of QuickTime in any respect? 
21			A	There were discussions about whether we
22	could help them with their QuickTime goals at various
23	points in time.  And, in fact, they encouraged us to
24	do something where we'd actually by working with them
25	make QuickTime even more popular than it is. 
	1				MR. BOIES:  Would you read back my
	2	question, please? 
	3				(Question read.) 
	4			Q	BY MR. BOIES:  Can you answer that
	5	question, sir? 
	6				MR. HEINER:  Objection. 
	7				THE WITNESS:  I'm not aware of anything
	8	that was directly aimed at those things, no. 
	9			Q	BY MR. BOIES:  Are you aware of
10	anything that was indirectly aimed at those things? 
11			A	No. 
12			Q	Did, to your knowledge, any
13	representative of Microsoft try to convince Apple not
14	to sell or promote QuickTime for uses for which
15	Microsoft promotes the use of NetShow? 
16			A	There was some discussion about the
17	future development of the runtime code and whether we
18	could work together on the Windows side of that
19	runtime code that would enhance their goal and our
20	goals. 
21			Q	And was there a discussion in that
22	context about Apple agreeing not to sell or promote
23	QuickTime for uses that Microsoft was promoting
24	NetShow to fulfill? 
25			A	Not that I'm aware of. 
	1			Q	Insofar as you're aware, did Microsoft
	2	representatives tell Apple representatives that if
	3	Apple would agree not to sell or promote QuickTime
	4	for uses for which Microsoft offered NetShow, that
	5	Microsoft would help Apple in other areas? 
	6			A	Well, the Quick -- as far as I know,
	7	the QuickTime runtime is free.  So when you say
	8	"sell," I don't -- I'm not sure what you mean there. 
	9			Q	I think I said sell or promote, I
10	certainly meant to.  But I will use the word
11	"distribute," if that will help. 
12			A	I think there was a technical
13	discussion about whether a common runtime was
14	achievable which would have enhanced their QuickTime
15	goals. 
16			Q	When you say "a common runtime," would
17	you explain what you mean by that? 
18			A	I mean that the Windows media player
19	runtime would combine technology from them and from
20	us that met all of their goals for QuickTime. 
21			Q	And so there would be a Windows media
22	player that would be distributed, and Apple would
23	stop distributing QuickTime for purposes for which
24	the Windows media player was distributed; is that
25	what you're saying? 
	1			A	No.  They wouldn't have to stop
	2	anything.  There would just be a new runtime that
	3	might incorporate some of their technology and help
	4	them with their QuickTime goals. 
	5			Q	Well, when you say there would be a new
	6	program that would incorporate or might incorporate
	7	some of their technology, would that result in them
	8	stopping the distribution of their existing QuickTime
	9	technology? 
10			A	There's no reason it would need to. 
11			Q	Was that part of the discussions? 
12			A	I don't think so.  But as I told you, I
13	wasn't part of any of those discussions. 
14			Q	Were you aware of those discussions
15	while they were going on? 
16			A	I knew that Apple had a -- had the
17	QuickTime runtime for Windows.  And there was always
18	a question of whether we could create a Windows
19	runtime that combined what their goals were there and
20	what they had done well there for the work we were
21	doing.  And I know we talked to Apple about whether
22	we could help each other in an effort like that. 
23			Q	When you talk about helping each other,
24	would that result in a single product that would then
25	be distributed in place of both QuickTime and
	1	NetShow? 
	2			A	No.  People could still distribute
	3	their old things.  But if you create a new thing
	4	that's better, some people might use it. 
	5			Q	Well, was the purpose of creating the
	6	new Windows media player that you referred to to
	7	obsolete QuickTime? 
	8			A	Whatever functionality QuickTime had
	9	previously would be unaffected by any such effort. 
10			Q	That really wasn't my question, 
11	Mr. Gates.  Maybe I can state it more clearly. 
12				Did Microsoft try to convince Apple to
13	take actions which would have resulted in Apple no
14	longer distributing QuickTime to people to whom
15	Microsoft was distributing NetShow or a successor
16	Microsoft product? 
17			A	I'm not aware of anything that would
18	have stopped them from distributing the QuickTime
19	they had.  But it was possible we could come up with
20	something that would be helpful to both companies in
21	terms of a product that took some of their technology
22	and ours and was better for users. 
23			Q	Did Microsoft offer to have Apple
24	continue to offer a multimedia player for the Mac
25	platform and to assist Apple in that if Apple would
	1	agree not to distribute that multimedia player for
	2	the Windows platform? 
	3			A	As I said, I don't think there was any
	4	discussions about not distributing some old thing,
	5	but rather a question that was could something new be
	6	created which would be better for both companies. 
	7			Q	Was the idea that once this new thing
	8	was created, the old thing that Apple was
	9	distributing would no longer be distributed by Apple? 
10			A	As I said, I don't think that was part
11	of the discussion. 
12			Q	Have you ever been told anything or
13	have you ever read anything about any contentions
14	that Apple may or may not make concerning these
15	discussions? 
16			A	No. 
17			Q	Are you aware of any assertions by
18	Apple representatives that Microsoft representatives
19	tried to get them to agree to divide the market? 
20			A	No. 
21			Q	No one's ever told you that; is that
22	your testimony? 
23			A	That's right. 
24			Q	And you've never heard that from any
25	source? 
	1			A	That's right. 
	2			Q	Do I take it from what you said
	3	yesterday that if, in fact, Microsoft representatives
	4	had attempted to get Apple representatives to
	5	participate in a market division, that would be
	6	contrary to Microsoft policy? 
	7				MR. HEINER:  Objection. 
	8				THE WITNESS:  That's right. 
	9			Q	BY MR. BOIES:  And I take it that if
10	you found out that people had done that contrary to
11	Microsoft's policy, they would be appropriately dealt
12	with? 
13			A	Yes. 
14			Q	Are you a regular reader of the Wall
15	Street Journal? 
16			A	Some days I read the Wall Street
17	Journal. 
18			Q	Are you aware of a Wall Street Journal
19	article that discusses assertions by Apple concerning
20	alleged efforts by Microsoft to get Apple to agree to
21	divide markets? 
22			A	No. 
23				MR. HEINER:  Mr. Boies?  
24				MR. BOIES:  Yes.  
25				MR. HEINER:  Is the antitrust division
	1	contemplating filing an amended complaint in this
	2	action? 
	3			MR. BOIES:  No.
	4			MR. HEINER:  Are these questions being
	5	asked pursuant to the complaint that was filed in
	6	this action? 
	7			MR. BOIES:  Yes. 
	8			MR. HEINER:  I think they're outside
	9	the scope of that complaint. 
10			MR. BOIES:  I do not.  I think that the
11	pattern of Microsoft in terms of attempts to divide
12	markets and the effect of those attempts on
13	Microsoft's monopoly power and the evidence of
14	Microsoft's monopoly power that comes out of those
15	attempts are all directly relevant to the case. 
16			MR. HEINER:  You could plead a
17	complaint like that.  You haven't yet. 
18			MR. BOIES:  I think that complaint is
19	clearly so pled.  I think this is clearly within the
20	scope of the complaint. 
21			MR. HEINER:  Let me ask you a different
22	question.  
23			Have you prioritized your questions
24	today so that you've asked the ones that are most
25	important to you?  
	1			MR. BOIES:  I think that I'm going
	2	through the examination in a logical way.  It has not
	3	been possible to prioritize things completely without
	4	simply jumping from topic to topic because of the
	5	length of time that it has taken to deal with certain
	6	topics.  But I do think that the pattern and practice
	7	of attempts of market division is a matter of
	8	priority. 
	9			MR. HEINER:  I won't cut off the
10	questioning.  But note the objection. 
11		   Q	BY MR. BOIES:  Let me ask you to go to
12	a different issue of market division or alleged
13	market division.  But before I do, let me just refer
14	you to a Wall Street Journal article of July 23,
15	1998, entitled "U.S. Probing Microsoft's Multimedia
16	Role."
17			Does that refresh your recollection as
18	to whether you ever saw a -- a Wall Street Journal
19	article about alleged market division attempts
20	between Microsoft and Apple? 
21			MR. HEINER:  Do you want to show us the
22	article? 
23			MR. BOIES:  I have no objection to
24	showing it.  And I have no objection to marking it. 
25			MR. HEINER:  I don't care if it's
	1	marked or not. 
	2					MR. BOIES:  My purpose
is just to try 3 to refresh his recollection, to see whether he 4 recalls having ever seen this. 5 THE WITNESS: No. 6 MR. BOIES: Okay. 7 Q In that case, let me show you a 8 document marked as Government Exhibit 375. 9 The second item on the first page is an e-mail 10 message from you to Jim Allchin and others dated 11 October 12, 1997. 12 (The document referred to was marked as 13 Government Exhibit 375 for identification and is 14 attached hereto.) 15 Q BY MR. BOIES: Did you send this e-mail 16 October 12, 1997? 17 A I don't remember it. But I have no 18 reason to doubt that I did. 19 Q In the first paragraph you say, 20 quote, 21 "I have a critical meeting 22 with Intel a week from Wednesday. I 23 want to convince them that they need 24 to stay away from Oracle NCs and work 25 more closely with Microsoft," close 469 1 quote. 2 Do you see that? 3 A Uh-huh. 4 Q Did you have that meeting? 5 A I had a meeting. 6 Q Do you recall having that meeting? 7 A I don't know what you mean "that 8 meeting." 9 Q You say, "I have a critical meeting 10 with Intel a week from Wednesday." Did you have that 11 meeting? 12 A I feel sure I had a meeting with Intel 13 after this piece of e-mail was sent. 14 Q In October of 1997? 15 A Could have been November. You'd have 16 to -- let's see. No. October. 17 Q Let me ask you to look at the last 18 paragraph under the heading "Sun byte codes are bad 19 for them." And you say, quote, 20 "I want them to understand 21 that helping NCs and JAVA will push 22 us to do Windows and other software 23 in SUN byte codes even if we don't 24 rewrite them in JAVA," close quote. 25 Do you see that? 470 1 A Uh-huh. 2 Q When you say "I want them to 3 understand," are you referring to Intel? 4 A I think so. 5 Q Did Microsoft make any effort to 6 convince Intel not to help Sun and Java? 7 A Not that I know of. 8 Q Did you or anyone at Microsoft attempt 9 to convince Intel not to engage in any software 10 activity? 11 MR. HEINER: Objection. 12 THE WITNESS: No. 13 Q BY MR. BOIES: Did you or, to your 14 knowledge, anyone at Microsoft try to convince Intel 15 that it should not engage in any software activity 16 unless Microsoft was involved in that activity? 17 A I'm sure we pointed out sometimes how 18 sometimes a lack of communications between the two 19 companies on various subjects including software 20 development led to unfortunate unreliability and 21 mismatch which led to bad customer experiences. 22 Q And what did that lead you to ask Intel 23 to do? 24 A Oh, in general, to see if we couldn't 25 do a better job communicating with each other so that 471 1 people would have better experiences using the PC. 2 Q Did you tell or did anyone, insofar as 3 you are aware, from Microsoft tell Intel 4 representatives that you did not want Intel's 5 software engineers interfering with Microsoft's 6 existing domination of the software side of the PC 7 industry? 8 A No. 9 Q Are you aware of an Intel operation 10 referred to as the Intel architecture labs? 11 A Yes. 12 Q Did you tell Intel chief executive 13 officer Andy Grove that you believed that Intel 14 should shut down its Intel architecture labs? 15 A No. 16 Q What did you understand the Intel 17 architecture labs to be doing? 18 A I can't claim to have a lot of 19 expertise on the broad set of things the Intel 20 architecture labs was doing. 21 Q What did you know the Intel 22 architecture labs was doing? 23 A Well, they were doing some plumbing 24 software to try to get some things to run on Windows 25 3.1 at one point. That's one thing I know they were 472 1 doing.
But in terms of their breadth of activities, 2 I'm -- the most of it I wouldn't have any familiarity 3 with. 4 Q Did you believe that there was anything 5 about what Intel was doing in the Intel architecture 6 labs that was inconsistent with Microsoft's 7 interests? 8 A Well, the fact that their software 9 didn't run with Windows 95 and would break if the 10 user wanted to move up to Windows 95 was a subject of 11 concern and discussion for us related to an overall 12 set of projects that were sometimes called NSP, 13 although that term had many meanings. 14 Q What does NSP stand for? 15 A Sometimes it means native signal 16 processing. 17 Q And how did what the Intel architecture 18 labs was doing relate to NSP? 19 A That was the plumbing. 20 Q For NSP? 21 A I believe so. 22 Q Did you tell Intel CEO, Mr. Grove, that 23 you believed that what Intel was doing in the Intel 24 architecture labs was contrary to Microsoft's 25 interests? 473 1 A In a broad sense, no. In terms of some 2 specific things that broke software for users I did 3 evidence that concern. 4 Q And you did so personally? 5 A Personally and inpersonally. 6 Q Did you ask Mr. Grove to cancel the 7 Intel architecture labs' work? 8 A No. 9 Q Did you or, insofar as you're aware, 10 anyone else at Microsoft tell people at Intel that 11 they should leave the software side of the PC 12 business entirely to Microsoft? 13 A We were having a hard time coordinating 14 our work with Intel, and we thought the quality of 15 some of their work was very low as well as not 16 working with any of our new Windows work. We may 17 have suggested at some point that the net 18 contribution of their software activities could even 19 be viewed to be negative. 20 Q Did you or insofar as you are aware or 21 anyone else at Microsoft tell representatives of 22 Intel that their software activities were 23 inconsistent with cooperation between Intel and 24 Microsoft? 25 A The specific work they did that 474 1 completely broke our work I'm sure I indicated I 2 didn't think that was a good idea for either company. 3 Q Other than the specific software that 4 would not work on Windows 95 that Intel was working 5 on, did you or, insofar as you are aware, anyone else 6 at Microsoft tell Intel representatives that the 7 software work that Intel was doing was inconsistent 8 with cooperation between Intel and Microsoft? 9 A Well, there's some other things that 10 they did that created incompatibilities. 11 Q Incompatibilities between what and 12 what? 13 A Between their software and Windows, 14 that was intended to run on Windows, that created 15 incompatibilities. 16 Q And did you tell them that that 17 software also was not consistent with cooperation 18 between Microsoft and Intel? 19 A I doubt I used those words. I 20 suggested that it wasn't helpful to any of their 21 goals or our goals to have software that had 22 incompatibilities and was low quality and broke. 23 Q Did you tell Intel representatives or 24 did, insofar as you're aware, any Microsoft employee 25 tell Intel representatives that you were concerned 475 1 about Intel support for Netscape? 2 A I don't remember that. 3 Q Do you remember telling Intel 4 representatives that you were concerned that Intel 5 support for Netscape could allow Netscape to grow 6 into a de facto standard? 7 A No. 8 Q Did you tell representatives of Intel 9 that you were concerned that Intel's use of Netscape 10 could set up a positive feedback loop for Netscape 11 that would allow it to grow into a de facto standard? 12 A What do you mean Intel's use of 13 Netscape? 14 Q I'm asking whether you told this to 15 Intel. If you didn't -- 16 A Given that I don't know what you mean 17 by Intel use of Netscape, if you're not going to 18 clarify what you mean by that -- 19 Q All I'm asking is whether you told them 20 something, Mr. Gates. And if you tell me, "I didn't 21 tell them that. Not only would I not tell them that 22 because I don't understand what it could be," that's 23 an answer. 24 But what I'm asking you is whether you 25 told them that in words or in substance. And if you 476 1 didn't, you didn't. Or if you say you didn't, you 2 say you didn't. But all I want to do is get your 3 answer. 4 MR. HEINER: And the witness's plea for 5 clarification of the question is that when you add 6 the "in substance" part, then you would need to 7 define the terms. 8 MR. BOIES: Well, let me try to 9 approach it this way. I wouldn't have thought the 10 term used is quite so ambiguous. 11 Q But, Mr. Gates, did you tell 12 representatives of Intel that Intel using Netscape in 13 a Windows environment would not be a problem so long 14 as Intel did not assist in setting up a positive 15 feedback loop for Netscape that allowed it to grow 16 into a de facto standard? Did you say that or write 17 that or communicate that, those words or words that 18 you recognize to mean the same thing? 19 MR. HEINER: Objection. 20 THE WITNESS: I'm still confused about 21 what you mean Intel's using something. Are you 22 talking about like in their internal IT systems? 23 What's this about? 24 Q BY MR. BOIES: Mr. Gates, either you 25 told that to Netscape or you didn't. If you tell me 477 1 you didn't tell that to Netscape, I'll go on to the 2 next question. 3 A I did not. 4 Q Okay. 5 MR. HEINER: Let's get one point clear. 6 When the witness has some confusion on a question, 7 should he or should he not bring that to your 8 attention? 9 MR. BOIES: I think the witness should 10 tell me that "I don't understand your question." 11 MR. HEINER: That's what he did, and 12 you seemed annoyed. 13 MR. BOIES: I don't think I seemed 14 annoyed. I think that there is, perhaps, given the 15 amount of time that we've spent on defining words 16 that I think have ordinary and clear meanings, I may 17 be anxious to move that along as much as possible. 18 But if the witness simply says "I don't understand 19 the question," I will rephrase it. There may be 20 times when I do become a little annoyed when the 21 witness instead of doing that decides to rephrase the 22 question and answer an entirely different question 23 from the one I've asked. But if the witness simply 24 says -- 25 MR. HEINER: Which is what just 478 1 happened. 2 MR. BOIES: I don't want to debate it 3 with you, the record will show what happened. But if 4 the witness simply says in response to a question "I 5 don't understand that question," I'll take that for 6 an answer and I'll rephrase it. 7 Q Did you, Mr. Gates, personally ever 8 express concern to Mr. Grove that Intel's software 9 work was beginning to overlap with Microsoft's 10 software work? 11 A Only in the sense that the low quality 12 and incompatibilities were inconsistent with any 13 goals that Intel might have had in doing that work. 14 Q Why was that a concern? 15 A Because Intel was wasting its money by 16 writing low quality software that created 17 incompatibilities for users, and those negative 18 experiences weren't helpful for any goal that Intel 19 had. 20 Q Were they harmful to any goal that 21 Microsoft had? 22 A Only in the sense of hurting PC 23 popularity by creating negative user experiences. 24 Q Is it your testimony that your only 25 concern with what Intel was doing in the software 479 1 area was a concern to avoid negative user 2 experiences? 3 A That's right. Low quality and 4 incompatibilities. 5 Q Which, according to you, would lead to 6 negative user experiences; correct? 7 A That's right. 8 Q Did you or, insofar as you are aware, 9 anybody at Microsoft ever tell Intel representatives 10 in words or in substance that they should stick to 11 hardware and leave the software to Microsoft? 12 MR. HEINER: Objection. 13 THE WITNESS: I'm sure there were times 14 when we were frustrated about the quality and 15 incompatibility problems created about their software 16 where someone might have expressed that sentiment in 17 an extreme feeling about how tough it had been for 18 Intel to do quality work that would have advanced any 19 Intel goal. 20 Q BY MR. BOIES: Were you aware of any 21 work that Intel was doing relating to Internet 22 software development? 23 A I can't think of any. 24 Q Did you ever express any concern to 25 anyone at Intel, or to your knowledge, did anyone at 480 1 Microsoft ever express any concern to anyone at Intel 2 concerning Intel's Internet software work, if any? 3 A I don't think Intel ever did any 4 Internet software work. 5 Q And if they did, I take it it's your 6 testimony no one ever told you about it? 7 A That's right. 8 Q Did you or, to your knowledge, anyone 9 at Microsoft express concern to Intel about the 10 success of Java or what you have referred to in this 11 deposition as Java runtimes? 12 A From time to time we'd have general 13 discussions with Intel about things going on in the 14 industry. And I'm sure our views of the Java runtime 15 competition may have come up in some of those 16 discussions. 17 MR. BOIES: Could I have the question 18 and answer read back please? 19 (The following record was read: 20 "Q Did you or, to your 21 knowledge, anyone at Microsoft 22 express concern to Intel about the 23 success of Java or what you have 24 referred to in this deposition as 25 Java runtimes? 481

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