U.S. vs. Microsoft
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Deposition of Bill Gates
September 2, 1998, Page 4

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

	1	       Q.	And when he says, "We do not currently
	2	plan on any other client software, especially
	3	something like Mosaic or Cello," and then in the next
	4	sentence says "Chicago is investigating
	5	possibilities, but nothing at all is public and DRG
	6	should not be talking to anyone with the thought of
	7	including them in the box or resource kit -- that is
	8	purely for Chicago/NT to deal with -- though any
	9	interesting packages should, of course, be brought to
10	everyone's attention.  Our plans for offering any
11	sort of connection to the Internet are highly
12	confidential and merely speculative."  
13		Do you think when he talks about Mosaic
14	and Cello he is talking about something for Chicago?
15		A.		He is talking about the Chicago
16	message.  The definition of what would and wouldn't
17	be in Chicago wasn't finally known until Chicago
18	shipped.  Certainly at this time we had made the
19	decision to do our best to include the browsing
20	functionality if we could.  We weren't saying that as
21	part of the Chicago message.
22		Q.		Mr. Gates, you've testified that you
23	never saw this until the last six months; correct?
24		A.		That's right.
25		Q.		Who showed you this?
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	1		A.	I'm not sure.  I think maybe the
	2	government cited it.  I'm not sure.
	3		Q.	Well, who showed it to you?
	4		A.	I'm not sure anyone showed it to me.  I
	5	think the government cited it in something.
	6		Q.	Well, the government cited it.  Do you
	7	read through the government's papers and pick out
	8	cites and go find them for yourself?
	9		A.	No.
10		Q.	Didn't think so.  So somebody had to go
11	pick this out and show it to you; correct, sir?
12		A.	I'm not sure, other than
13	attorney-client meetings, when I've seen the entire
14	mail message.
15	       Q.	Have you -- and this only calls for a
16	yes or no answer -- seen this in attorney-client
17	discussions, the whole message just like we have
18	here?  
19		MR. HEINER:  Objection.  I think it
20	intrudes on the privilege and work product.  I think
21	that's a common objection to assert as well.
22		MR. BOIES:  It is a common objection to
23	assert.  Ordinarily I, you know, I don't press the
24	question.  Here, this is something that he is now
25	testifying as to what it means and I think the only
				615
	
	1	way that he has any knowledge about this, he says, is
	2	something that has happened in the last six months. 
	3	And so I think at least in terms of knowing where
	4	that information comes from, I'm entitled to know on
	5	a yes or no basis, even if I may not be entitled to
	6	find out what he was told.  
	7		MR. HEINER:  Yeah, I don't think that's
	8	right.  I don't think you should ask that precise
	9	question.
10		MR. BOIES:  I'll press the question. 
11	Are you going to instruct him not to answer?  This
12	time I'm going to press the question.  
13		MR. HEINER:  I'd like to have it read
14	back then.
15			(The record was read as follows:  
16			"Q.  Have you -- and this only calls
17		for a yes or no answer -- seen this in
18		attorney-client discussions, the whole message
19		just like we have here?")               
20			MR. HEINER:  Just a minute.  
21			We're going to stand on the instruction
22	not to answer that question.
23			MR. BOIES:  Okay.  
24		Q.	Have you ever seen this document, the
25	whole message, other than in an attorney-client
					616
	
	1	conversation, prior to your deposition?
	2		A.	I'm not sure.
	3		Q.	Let me show you a document marked as
	4	Exhibit 385, which is a copy of an article from
	5	Computer World dated January 16, 1995.  And under the
	6	column "News Shorts" there is a heading that says
	7	"Microsoft licenses Mosaic Internet browser" and it
	8	says "Microsoft Corp. chairman Bill Gates said last
	9	week that his company has licensed Mosaic software
10	for browsing the World-Wide Web."  
11			Did you so state in or about January of
12	1995, Mr. Gates?
13		A.	I don't know.
14			(The document referred to was marked
15	by the court reporter as Government Exhibit 385 for
16	identification and is attached hereto.)
17		Q.	BY MR. BOIES:  Later on it says that
18	Microsoft will "incorporate the technology into The
19	Microsoft Network.  Mosaic support will arrive in the
20	fourth quarter, a few months after The Microsoft
21	Network debuts, Gates said."  Do you see that?
22		A.	Yes.
23		Q.	Did you say that, Mr. Gates, in or 
24	about January of 1995?
25		A.	It doesn't make sense to say
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	1	"incorporate the technology into The Microsoft
	2	Network," so I'm pretty sure I didn't say that.
	3		Q.	Let me show you a document that has
	4	been marked as Exhibit	386.  The second item here
	5	purports to be a message from you to a number of
	6	people dated April 6,	1995.  Do you see that?
	7		A.	Yes.  
	8			(The document referred to was marked
	9	by the court reporter as Government Exhibit 386 for
10	identification and is attached hereto.) 
11		Q.	BY MR. BOIES:  Did you send this
12	message on or about April 6, 1995?
13		A.	I don't remember sending it, but I
14	don't have any reason to doubt that I did.
15		Q.	Now, attached to this message, as it
16	was produced to us, I believe, by Microsoft, is a
17	two-page document headed "Netscape as Netware."  Do
18	you see that?
19		A.	I see a three-page document, yes.
20		Q.	Yes, three pages.  Pages 3558 through
21	3560.  
22			Have you seen this before?
23		A.	I don't remember seeing it before.
24		Q.	Now, the title of this three-page
25	attachment is "Netscape as Netware" and there is a
					618
	
	1	footnote that says, "The analogy here is that the
	2	major sin that Microsoft made with Netware was to let
	3	Novell offer a better (actually smaller and faster
	4	with simpler protocol) client for networking.  They
	5	got to critical mass and can now evolve both client
	6	and server together."  
	7			Do you see that?
	8		A.	Uh-huh.  Yes.
	9		Q.	In or about April of 1995, was
10	Microsoft concerned with Netscape getting to what is
11	referred to here as critical mass?
12		A.	I don't know what Paul meant in using
13	that word.
14		Q.	Do you have any understanding at all
15	about what Mr. Maritz meant when he referred to a
16	competitor getting "to critical mass"?  
17		A.	He seems to be using that phrase with
18	respect to Netware or Novell, but I'm not sure what
19	he means by it.
20		Q.	He is also using it with respect to
21	Netscape in the analogy, is that not so?
22		A.	It's not clear that the term "critical
23	mass" is part of the analogy, is it?  It's not to me.  
24		Q.	Okay.  This document is about Netscape,
25	it's not about Novell; correct, sir?
					619
	
	1		A.	I didn't write the document.  The
	2	document appears to refer to "Netscape as Netware" as
	3	its title, so Novell is talked about in this document
	4	and a lot of things seem to be talked about here.  Do
	5	you want me to read it?
	6		Q.	If you have to to answer any of my
	7	questions.  
	8			Netware is something from Novell;
	9	correct, sir?
10		A.	Fact.
11		Q.	What?
12		A.	Fact.
13		Q.	Does that mean yes?
14		A.	Yes.
15		Q.	And what Mr. Maritz here is doing is
16	analogizing Netscape to Netware; correct?
17		A.	It's kind of confusing because Netscape
18	is the name of a company and Netware is the name of a
19	product and so I'm not sure what he is doing. 
20	Usually you think of analogizing two products to each
21	other or two companies to each other, but he appears
22	to be analogizing a company to a product, which is a
23	very strange thing.
24		Q.	Well, sir, in April of 1995, insofar as
25	Microsoft was concerned, was Netscape primarily a
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	1	browser company?
	2		A.	No.
	3		Q.	It was not?
	4		A.	No.
	5		Q.	All right, sir.  
	6			In this document do you understand what
	7	Mr. Maritz is saying is that Microsoft should not
	8	make the same mistake with Netscape's browser as it
	9	did with Novell's Netware?
10		A.	I'd have to read the document.  Do you
11	want me to?
12		Q.	If you need to read the document to
13	answer that question, Mr. Gates, go ahead and do so. 
14	And when you've finished, if you have the question in
15	mind, please answer it.  If you don't have the
16	question in mind, we'll read it back.  
17	              And the question is, do you understand
18	that what this document is saying is that Microsoft
19	should not make the same mistake with Netscape's
20	browser as it did with Novell's Netware?  And you can
21	read any portion that you want, but I am particularly
22	interested the heading which says "Netscape as
23	Netware" and the footnote right off that heading,
24	"The analogy here is that the major sin that
25	Microsoft made with Netware was to let Novell offer a
			621
	
	1	better (actually smaller and faster, with simpler
	2	protocol) client for networking.  They got to
	3	critical mass and can now evolve both client and
	4	server together."
	5		A.	Are you asking me a question about the
	6	whole document?
	7		Q.	No, I didn't think I was.  I thought it
	8	was possible for you to answer the question by
	9	looking at the title and first footnote.  
10		A.	I thought you were asking me what the
11	document is about.
12		Q.	I think it's possible to answer the
13	question by looking at the heading and that footnote. 
14	My question is whether, as you understand it, what
15	Mr. Maritz is saying here is that Microsoft should
16	not make the same mistake with Netscape's browser as
17	it did with Novell's Netware?  
18		A.	Does it say "mistake" somewhere?
19		Q.	All I'm asking you is whether you
20	interpret this that way?
21		A.	Does it say "mistake" somewhere?
22		Q.	Mr. Gates, we have had a conversation
23	about how I ask the questions and you give the
24	answers.  I think --
25		A.	I don't see where it says "mistake."
					622
	
	1		Q.	It doesn't say "mistake."  It says
	2	"major sin."  If you think major sin is something
	3	different than mistake, you can answer the question
	4	no, that's not what you think Mr. Maritz means.  My
	5	question is clear.  You can answer it yes, no, or you
	6	can't tell.  
	7		A.	What is the question?
	8		Q.	My question is whether -- as you
	9	understand what Mr. Maritz is saying here, is he
10	saying that Microsoft should not make the same
11	mistake with Netscape's browser as it did with
12	Novell's Netware?
13		A.	No, I think he is saying something
14	else.
15		Q.	Okay.  Do you think that when
16	Mr. Maritz uses the term "major sin" that Microsoft
17	made, he is referring to what he thinks is a mistake?
18		A.	Probably.
19		Q.	Okay.  Let me ask you to look next at a
20	document marked as Exhibit 387.  This is an e-mail
21	from Brad Silverberg, or it's a message from Brad
22	Silverberg -- I don't know whether it's an e-mail or
23	not -- dated April 12, 1995 at 12:53 p.m.  
24			(The document referred to was marked
25	by the court reporter as Government Exhibit 387 for
						623
	
	1	identification and is attached hereto.) 
	2		Q.	BY MR. BOIES:  Have you ever seen this
	3	message before, sir?
	4		A.	No.
	5		Q.	The first paragraph says, "I have
	6	spoken with Paul Maritz and he is in agreement that
	7	we should get our Internet client distributed as
	8	broadly as possible as soon as possible." 
	9			Did you understand that that was the
10	view of Mr. Maritz in April of 1995?
11		A.	I think -- I think it probably was.
12		Q.	And when reference is made here to
13	Microsoft's Internet client, do you understand that
14	to be Internet Explorer?
15		A.	I think at the time of this document 
16	it meant O'Hare.
17		Q.	And what did O'Hare become?
18		A.	It became Internet Explorer plus some
19	other things.
20		Q.	Let me ask you to look next at a
21	document marked Exhibit 388.  The second e-mail or
22	message here is a message dated April 12, 1995 at
23	12:54 p.m. from Paul Maritz to you and a number of
24	other people; correct, sir?
25		A.	That's what it appears to be.  
					624
	
	1			(The document referred to was marked
	2	by the court reporter as Government Exhibit 388 for
	3	identification and is attached hereto.) 
	4		Q.	BY MR. BOIES:  And the subject is the
	5	"3 year plan thoughts - draft;" correct?
	6		A.	That's, yes, the subject.
	7		Q.	Did you receive this message on or
	8	about April 12, 1995?
	9		A.	I don't remember receiving it, but I
10	have no reason to doubt that I did.
11		Q.	Now, attached here is something that is
12	titled "3 year plan follow-up (draft)."  Do you see
13	that?
14		A.	Yes.
15		Q.	Did you receive this at or about the
16	time indicated of April 12, 1995?
17		A.	I'm not sure.
18		Q.	Let me ask you to look at the page that
19	bears in the bottom right-hand corner the Microsoft
20	document production stamp ending 7193.  And in
21	particular the portion that is under the heading
22	"Shell/Browser."  Do you have that?
23		A.	Yes.
24		Q.	And it says here, "We should get a view
25	as to what will be handled by the 'Win97' Shell, and
					625
	
	1	what will not - and if not, how is the needed
	2	extension integrated into the Win97 environment."  
	3			Do you see that?
	4		A.	Uh-huh.
	5		Q.	Were you told in or about April of 1995
	6	that one of the issues in terms of planning that was
	7	needed to be decided was what would be handled by the
	8	Win97 shell and what would not be?
	9		A.	I'm not sure -- I'm not sure what is
10	meant by Win97 shell here.  I don't remember seeing
11	that at the time.
12		Q.	Well, you know what a shell is in this
13	context, do you not, sir?
14		A.	Yes.
15		Q.	And you recognize Win97 as a reference
16	to what ultimately became Windows 98, do you not,
17	sir?
18		A.	No.  The fact that we use a name like
19	that before we have decided what's in a product
20	doesn't mean that when we used that name back then 
21	it references what eventually got into the product.
22		Q.	Let me make sure I understand that last
23	answer.  
24			Was Win97 a reference that was used
25	within Microsoft to refer to what ultimately became
					626
	
	1	Windows 98?
	2		A.	It was a term that was used to refer to
	3	a project.  When it was used, none of us knew either
	4	what would be in the project or what it would be
	5	called.  So any time you see that reference, you
	6	can't assume it's a reference to the things that
	7	eventually became Windows 98.  All you know is
	8	they're referring to the next project related to
	9	enhancing Windows.
10		Q.	Let me ask the question this way.  Was
11	the project that was internally described within
12	Microsoft as Win97 the project that ultimately
13	resulted in Windows 98?
14		A.	I believe so.
15		MR. HEINER:  Would you like to take a
16	break now?
17		MR. BOIES:  Sure.
18		VIDEOTAPE OPERATOR:  The time is 1:33. 
19	We are going off the record.
20		(Recess.) 
21		VIDEOTAPE OPERATOR:  The time is 1:48. 
22	We're going back on the record.
23	       Q.	BY MR. BOIES:  Mr. Gates, let me show
24	you a document marked as Government Exhibit 390.  The
25	first message here purports to be a message to you
						627
	
	1	and Mr. Maritz and Mr. Allchin on February 24, 1997
	2	at 11:07 p.m.  Do you see that?
	3		A.	Yes.
	4			(The document referred to was marked
	5	by the court reporter as Government Exhibit 390 for
	6	identification and is attached hereto.)
	7		Q.	BY MR. BOIES:  And it talks about a
	8	focus group report and it says that most of the
	9	people in the focus group were Navigator users.  And
10	then it goes on to say about those Navigator users,
11	"They said they would not switch, would not want to
12	download IE 4 to replace their Navigator browser. 
13	However, once everything is in the OS and right
14	there, integrated into the OS, 'in their face' so to
15	speak, then they said they would use it because there
16	would be no more need to use something 'separate.'"  
17			Do you see that?
18		A.	Yes.
19		Q.	Do you recall being told that in or
20	about February, 1997?
21		A.	No.
22		Q.	Let me ask you to turn to the fifth
23	page of this exhibit.  And this is an original
24	message dated February 24, 1997 at 10:38 a.m. also
25	relayed into the Memphis focus group's report.
					628
	
	1		A.	It's an enclosure to the message above.
	2		Q.	It's an enclosure to the message above. 
	3	That is what you have is first a message dated
	4	February 24, 1997 at 11:07 p.m. that went to you and
	5	Mr. Maritz and Mr. Allchin, and then you have another
	6	message that was an enclosure that went to you and
	7	others; correct?
	8		A.	Yes.
	9		Q.	So you would have received the second
10	message when you received the message that was
11	addressed to you; correct?
12		A.	If I did, which I told you I don't
13	remember, but I have no reason to doubt that I did.
14		Q.	Right.  The next to last paragraph on
15	the fifth page of the exhibit, the one that ends with
16	the Microsoft document production stamp 8179, do you
17	have that page?
18		A.	Yes.
19		Q.	The next to last paragraph of this
20	material that was sent to you on February 24th, '97
21	if in fact it was, on page 5 says "It seems clear
22	that it will be very hard to increase browser market
23	share on the merits of IE 4 alone.  It will be more
24	important to leverage the OS asset to make people use
25	IE instead of Navigator."  
					629
	
	1			Do you see that?
	2		A.	Yes.
	3		Q.	Were you told that in or about February
	4	of 1997?
	5		A.	Out of the context of this memo?
	6		Q.	Well, first let's ask were you told
	7	that in the context of this memo?  
	8			MR. HEINER:  Objection.  Is your
	9	question if he received the memo?
10		Q.	BY MR. BOIES:  Well, I don't know what
11	he meant by his statement.  He simply was asking me
12	whether I was asking him if he was told outside of
13	the context of the memo, and I want to know if he was
14	told that inside the context of this memo.  
15		MR. HEINER:  Objection.  
16		THE WITNESS:  Those sentences seem to
17	appear in this memo that's talking about some
18	features.  It wasn't a product demo but some
19	features, including WebView, that they showed to some
20	end users.
21	       Q.	BY MR. BOIES:  Let me try to break the
22	question down.  First, do you recall being told in
23	any context in or about February of 1997, "It seems
24	clear that it will be very hard to increase browser
25	market share on the merits of IE 4 alone.  It will be
					630
	
	1	more important to leverage the OS asset to make
	2	people use IE instead of Navigator"?
	3		A.	Those words?
	4		Q.	Let me begin with that.  Do you recall
	5	being --
	6		A.	No.
	7		Q.	-- communicated those words in or about
	8	February of 1997?
	9		A.	I said no.
10		Q.	Do you recall being communicated those
11	words at any time, whether in or about February of
12	1997 or any other time?
13		A.	Isn't that what I just answered?
14		Q.	Perhaps you did.  I thought the first
15	answer related to February, 1997, but if you're
16	telling me you don't recall ever being told that, I
17	just want that clarified for the record.
18		A.	Those words, no.
19		Q.	Do you recall being told in substance
20	what is stated here at any time in the language that
21	I've just quoted?
22		A.	That's a self contradictory question. 
23	You can't say you're asking me something in substance
24	and then say in the language you just quoted.  That's
25	completely contradictory.  
					631
	
	1		Q.	Sir, if you don't understand the
	2	question and you can't answer it, all you have to do
	3	is say so.  
	4		A.	I understand that the question is
	5	contradictory to itself.
	6		Q.	Well, Mr. Gates, the memo says --
	7			MR. HEINER:  There is no problem there. 
	8	You just made a mistake on that question.  It's okay. 
	9	Why don't you just state a new question.
10			MR. BOIES:  Well, Mr. Heiner, I frankly
11	think -- I won't debate with the witness, I will
12	debate with you.  
13			MR. HEINER:  Be my guest.
14			MR. BOIES:  I think the question was
15	actually quite clear, but what I was about to do is
16	put a new question.  
17		MR. HEINER:  Okay.
18	       Q.	BY MR. BOIES:  This document that
19	purports to have gone to you, sir, says "It seems
20	clear that it will be very hard to increase browser
21	market share on the merits of IE 4 alone.  It will be
22	more important to leverage the OS asset to make
23	people use IE instead of Navigator."  
24		Do you recall ever being told or ever
25	receiving a communication that said in substance what
				632
	
	1	is reflected there?
	2		A.	No.
	3		Q.	Let me show you Exhibit 591 -- or I
	4	guess it's Exhibit 391.  This purports to be a
	5	message to you dated April 18, 1995, to you and other
	6	people.  
	7			(The document referred to was marked
	8	by the court reporter as Government Exhibit 391 for
	9	identification and is attached hereto.) 
10		Q.	BY MR. BOIES:  Did you receive this
11	message in or about April of 1995?
12		A.	I don't remember receiving it, but I
13	have no reason to doubt that it was sent to me.
14		Q.	Let me ask you to look at the bottom of
15	the first page, next to last paragraph, the sentence
16	that begins "This does not mean that Netscape needs
17	to be a direct competitor."  Do you see that?
18		A.	Yes.
19		Q.	Do you recall discussions in or about
20	April of 1995 about whether or not Netscape would or
21	would not be a direct competitor of Microsoft?
22		A.	I'm sure there was some discussion
23	about Netscape and the whole Internet phenomenon, and
24	particularly what that meant about the business
25	Nathan was in charge of, which was Marvel.  I don't
					633
	
	1	remember specifically if we figured out whether they
	2	would or wouldn't be a competitor or what they were
	3	doing.
	4		Q.	Do you recall communications within
	5	Microsoft in or about April of 1995 about what might
	6	be done to be sure that Netscape did not become a
	7	direct competitor of Microsoft?
	8		A.	No.
	9		Q.	Do you recall any communications within
10	Microsoft in or about April of 1997 relating to what
11	Microsoft might do to influence whether or not
12	Netscape became a direct competitor of Microsoft?
13		A.	No.
14		Q.	Do you recall any discussions within
15	Microsoft at any time or any communications within
16	Microsoft at any time relating to what Microsoft
17	might do to influence whether Netscape became a
18	direct competitor of Microsoft?
19		A.	No.
20		Q.	Let me ask you to look next at an
21	exhibit marked Government Exhibit 392.  The second
22	item here purports to be a message from you to Paul
23	Maritz and Brad Silverberg with copies to a number of
24	other people dated January 28, 1997, at 10:34 a.m. 
25			Do you see that?
					634
	
	1		A.	Yes.  
	2			(The document referred to was marked
	3	by the court reporter as Government Exhibit 392 for
	4	identification and is attached hereto.) 
	5		Q.	BY MR. BOIES:  Did you send this
	6	message to Mr. Maritz and Mr. Silverberg and others
	7	on or about January 28, 1997?
	8		A.	I don't remember doing so, but I have
	9	no reason to doubt that I did.
10		Q.	You say that there has been -- the
11	beginning of the document, the very beginning of the
12	document you say, "There has recently been an
13	exchange on e-mail with people in the Office group
14	about Office and HTML.  In one piece of mail people
15	were suggesting that Office had to work equally well
16	with all browsers and that we shouldn't force Office
17	users to use our browser.  This is wrong and I wanted
18	to correct this."
19			Do you see that?
20		A.	Yes.
21		Q.	Did you send that message to Mr. Maritz
22	and Mr. Silverberg and others in or about January of
23	1997?
24		A.	You already asked that and I told you I
25	don't remember sending it.
					635
	
	1		Q.	Did you convey the substance of what is
	2	here to Mr. Maritz and Mr. Silverberg in or about
	3	January of 1997?
	4		A.	I don't know the time frame, but there
	5	was a question for very advanced features in Office
	6	that had to do with the fact that older browsers,
	7	including our own older browsers, couldn't display
	8	the information and should we therefore display it to
	9	no one or what should we do about advance display
10	semantics.  And I know in that case the issue came up
11	about should we support the advanced display
12	semantics at all.
13		Q.	Is it your testimony, Mr. Gates, that
14	that is what you were talking about here?
15		A.	Absolutely.  That's what this 
16	message -- I mean if you read it, that's what it is
17	about.
18		Q.	This is a message that you don't recall
19	sending; is that correct?
20		A.	I've read it today, but I don't recall
21	sending it, that's right.
22		Q.	But what you're doing is you're
23	testifying under oath that when you say that you
24	should force Office users to use Microsoft's browser,
25	you were talking about what you just described; is
					636
	
	1	that your testimony?
	2		A.	I don't see that in the message.
	3		Q.	Well, you're saying here that Microsoft
	4	should force Office users to use Microsoft's browser,
	5	are you not, sir?
	6		A.	No.
	7		Q.	Well, sir, you say "In one piece of
	8	mail people were suggesting that Office had to work
	9	equally well with all browsers and that we shouldn't
10	force Office users to use our browser.  This is wrong
11	and I wanted to correct this."  
12			Is it your testimony under oath that
13	you are not saying that the assertion that you had
14	heard that Microsoft shouldn't force Office users to
15	use Microsoft's browser was wrong?
16	       A.     There's a sentence there that talks
17	about whether Office has to work equally well with
18	all browsers and because I'm talking about Trident
19	here, Trident was a set of technologies we were doing
20	to extend things so that you could work with Office
21	documents that are very rich documents in a new way
22	that no previous browser, including our own previous
23	browsers, was willing to display.  And there was a
24	question of whether they should take advantage of
25	those Trident things or not.  Some people were
			637
	
	1	questioning whether we should take advantage of those
	2	Trident things and here I'm making very clear, and
	3	all you have to do is read the complete e-mail, I'm
	4	saying we should go ahead and take advantage of those
	5	Trident things.  Now, that is very different than
	6	saying people are forced to use any browser.  It's
	7	just if you want the best experience in terms of
	8	seeing those rich documents, what we're doing in
	9	Trident I thought we should take advantage of.
10	       Q.     Now, sir, is it your testimony sitting
11	here under oath that when in the language that I have
12	quoted you wrote "This is wrong and I wanted to
13	correct this" relating to the previous sentence,
14	which had said "In one piece of mail people were
15	suggesting that Office had to work equally well with
16	all browsers and we shouldn't force Office users to
17	use our browser," you were talking about Trident?  Is
18	that your testimony?
19		A.	Well, I think you've mischaracterized
20	my testimony.
21		Q.	All I'm asking is whether that is your
22	testimony.  If you tell me that's not your testimony,
23	we go on.  Is that what you're telling me, sir?
24		A.	Are you trying to characterize my
25	previous testimony?  
					638
	
	1		Q.	I was trying to see whether we
	2	understood your previous testimony.
	3		A.	Your characterization was wrong.
	4		Q.	Okay.  In the second paragraph of this
	5	exhibit you write "In one piece of mail people were
	6	suggesting that Office had to work equally well with
	7	all browsers and that we shouldn't force Office users
	8	to use our browser.  This is wrong and I wanted to
	9	correct this."  Does that statement relate to
10	Trident, sir?
11		A.	I explained how it relates to Trident.
12		Q.	So your answer is that that relates to
13	Trident; is that your testimony?
14		A.	In order to know that, I read the
15	entire piece of e-mail and upon reading it, I know
16	that what that relates to is whether we should
17	exploit the advanced features of Trident so that 
18	Office works particularly well with the new browser
19	from us with those Trident features.
20		Q.	Mr. Gates, isn't it clear that the
21	discussion at the end of the memo about Trident is
22	about a different point than the point we've been
23	talking about?
24		A.	Absolutely not.
25		Q.	Well, sir, immediately after the
					639
	
	1	paragraph we've been talking about don't you write,
	2	"Another suggestion in this mail was that we can't
	3	make our own unilateral extensions to HTML.  I was
	4	going to say this was wrong and correct this also." 
	5	And then you go on to talk about Trident.  Isn't that
	6	what you wrote here?
	7		A.	I think you've correctly read some of
	8	the words in the e-mail.  We could go on and read
	9	more of the words so you could understand why what
10	I've told you is correct.
11		Q.	Is there anything in here that asserts
12	that forcing Office users to use Microsoft's browser
13	is limited to the Trident situation?
14		A.	It's clearly about whether Office
15	should exploit HTML that takes advantage of Trident
16	and whether that's a good idea or not.  That's what
17	this piece of e-mail is about.  
18		Q.	If that's all it's about, Mr. Gates,
19	why do you introduce the Trident discussion by saying
20	"Another suggestion in this mail is that we can't
21	make our own unilateral extensions to HTML.  I was
22	going to say this was wrong and correct this also"? 
23	Aren't you clearly saying this is an additional
24	point?
25		A.	No.  You're just trying to misread my
					640
	
	1	e-mail.  It talks about Office.
	2		Q.	Yes, it certainly does talk about
	3	Office.  And it talks about forcing Office users to
	4	use your browser; correct, sir?
	5		A.	No.
	6		Q.	It doesn't?  When you say that somebody
	7	is saying -- that you've seen an e-mail of people
	8	saying "we shouldn't force Office users to use our
	9	browser" and that this is wrong, you're not saying
10	that you should use Office to force users to use your
11	browser; is that what you're saying?
12		A.	That was the most circular thing I've
13	ever heard.
14		Q.	I think it was pretty circular 
15	because --
16		A.	You continue to not read the sentence
17	and look at the piece of e-mail.  The question in
18	this e-mail is whether Office should work equally
19	well with all browsers.  And it's talking about --
20		Q.	Now, sir --
21		A.	If you want to look further to
22	understand it --
23		Q.	How about let me put a question.  
24			MR. HEINER:  Let me --
25			MR. BOIES:  May I ask the witness what
					641
	
	1	question is he answering?  
	2			MR. HEINER:  Whatever the last question
	3	that was posed.
	4			MR. BOIES:  I want to know if he knows
	5	what question he is answering.
	6			THE WITNESS:  Can you read back the
	7	question?  
	8		Q.	BY MR. BOIES:  No.  Can you tell me,
	9	Mr. Gates, what question you're purporting to answer?
10		A.	Your last question.
11		Q.	Do you know what it is?
12		A.	Could I make it as convoluted as you
13	did?  No.
14		Q.	Can you tell me what question you're
15	answering?
16		A.	I can't repeat back that convoluted a
17	question.  I could ask the reporter to.
18		Q.	Can you tell me the substance of the
19	question you're answering?
20			MR. HEINER:  Mr. Boies, pose the next
21	question.
22			MR. BOIES:  Okay.
23			MR. HEINER:  Let me suggest one.  Ask
24	him about the first sentence, which is the subject
25	matter being introduced.
						642
	
	1	       Q.	BY MR. BOIES:  Okay.  Actually, I've
	2	read the first sentence, but I'll read it again.  The
	3	first sentence, which is one paragraph, says "There
	4	has recently been an exchange on e-mail with people
	5	in the Office group about Office and HTML."  
	6		Second paragraph says "In one piece of
	7	mail people were suggesting that Office had to work
	8	equally well with all browsers and that we shouldn't
	9	force Office users to use our browser.  This is wrong
10	and I wanted to correct this."  
11		Third paragraph says "Another
12	suggestion in this mail was that we can't make our
13	own unilateral extensions to HTML.  I was going to
14	say this was wrong and correct this also."  
15			Now, have I read correctly the first
16	three paragraphs of this memo, Mr. Gates?
17		A.	Yes.
18		Q.	And is it your testimony that when you
19	said that the e-mail suggesting that Office had to
20	work equally well with all browsers and that
21	Microsoft shouldn't force Office users to use
22	Microsoft's browser was wrong, that all you were
23	talking about there was Trident; is that your
24	testimony?
25		A.	I'm not sure what you mean all I was
					643
	
	1	talking about.  This e-mail is about Office and HTML.
	2		Q.	Yes.  
	3		A.	There is a new extension to HTML being
	4	created in Trident.  There was a question of whether
	5	Office could take advantage of it, which meant that
	6	it would take advantage of those new browsers in a
	7	better way than it would take advantage of our old
	8	browsers or other people's browsers without those
	9	extensions.  I was suggesting here, and it's totally
10	a mischaracterization to suggest that that third
11	paragraph isn't totally in line with it, that we
12	should take advantage of those Trident HTML
13	extensions and, therefore, Office documents would
14	look better, at least for those users.
15		Q.	And is it your testimony -- and all I'm
16	trying to do is clarify your testimony, Mr. Gates,
17	because once the testimony is done, then the trier of
18	fact can decide what credibility to give it.  All I'm
19	trying to do is identify it.  And you have said that
20	the extensions to HTML relates to Trident; correct?
21		A.	Yes.
22		Q.	Now, what I'm trying to find out is
23	whether these extensions to HTML that relate to
24	Trident is also the only point of your statement that
25	you should force Office users to use your browser?
					644
	
	1		A.	That's a sentence fragment here.  What
	2	people were saying was if we took unique advantage of
	3	Trident, wouldn't people feel like they needed to
	4	upgrade to Trident.  And I said, hey, if that's the
	5	only way they can see the advanced document
	6	capability, then fine.
	7		Q.	Mr. Gates, I mean that's not what this
	8	e-mail says.  
	9		A.	We certainly know what the e-mail says.
10		Q.	Yes, exactly.  And I don't mean to be
11	disrespectful here, but aren't you doing what we
12	talked about before here, just trying to substitute
13	different words for the words that you actually wrote
14	that you think will sound better in the context of
15	this litigation?
16		A.	I've explained to you what this e-mail
17	is about.  You don't seem to like the facts.
18		Q.	Mr. Gates, my question, and if the
19	answer is yes or no or I don't understand your
20	question, you can give me that testimony.  But is the
21	explanation that you're giving me now of this
22	document an explanation where you're trying to use
23	words differently now because of the litigation than
24	you used them back in 1997?
25		A.	No.
					645
	
	1		Q.	Not at all, sir?
	2		A.	No.
	3		Q.	Do you feel more uncomfortable
	4	admitting in a deposition in this case that you were
	5	trying to force Office users to use your browser than
	6	you did back in January of 1997?
	7		A.	You're mischaracterizing the e-mail.
	8		Q.	Well, let me ask you a question
	9	independent of the e-mail.  
10			Do you feel more uncomfortable with the
11	characterization that Microsoft is forcing Office
12	users to use Microsoft's browser today than you did
13	back in January, 1997?
14		A.	I've never been comfortable with
15	lawyers mischaracterizing the truth.
16		Q.	Well, Mr. Gates, could I have my
17	question answered?
18		A.	I answered it.
19			MR. BOIES:  Would you read the question
20	back, please.
21			(Record read.) 
22		Q.	BY MR. BOIES:  Could I have an answer
23	to that question, sir?  
24			MR. HEINER:  Objection.
25			THE WITNESS:  My view of lawyers
						646
	
	1	mischaracterizing something has not changed.
	2	       Q.	BY MR. BOIES:  Mr. Gates, I'm not
	3	talking about your view of lawyers mischaracterizing
	4	things.  I'm talking about your view of the use of
	5	language.  You've got a document in here in which you
	6	talk about forcing Office users to use your browser. 
	7	You say "In one piece of mail people were suggesting
	8	that Office had to work equally well with all
	9	browsers and we shouldn't force Office users to use
10	our browser."  You go on to say to the top executives
11	of your company, "This is wrong."  
12		Now, my simple question is whether
13	you're more concerned about the use of those words
14	today than you were back in January of 1997, whether
15	this litigation is influencing the care and
16	precision, if you want to put it that way, with which
17	you are determined to use words?
18		A.	I'm not sure what I'm comparing to
19	what.
20		Q.	Okay, let me try to be clear.  In
21	January of 1997 you wrote this e-mail --
22		A.	In total.
23		Q.	In total.  And at the time you wrote
24	this e-mail, you didn't have any expectations it was
25	going to show up in this litigation, did you?
					647
	
	1		A.	I'm not sure what you mean by that.
	2		Q.	What I mean is you thought this was a
	3	private e-mail.  You thought you were writing to your
	4	executives and you didn't think anybody outside the
	5	company was going to review this and do what I'm
	6	doing now, which is asking you questions about it,
	7	right?
	8		A.	Oh, I think the general notion that any
	9	e-mail I write might be reviewed at some point is one
10	that I've understood certainly since 1990.
11		Q.	So it is your testimony that taking
12	this e-mail in its entirety, that you today are
13	entirely comfortable that the memo, the e-mail in its
14	entirety, is a fair and accurate statement of your
15	views; is that correct?
16		A.	If somebody takes the trouble to
17	understand it, yes.
18		Q.	That is, if somebody reads this
19	document all the way through, takes the trouble to
20	figure out what is here, you say that's a fair and
21	accurate statement of your views; correct?
22		A.	Views on what?
23		Q.	Views on the things that you're talking
24	about in the memo.  
25			Let me try to approach it a different
					648
	
	1	way.  Sometimes when people write things after the
	2	fact, they say "I wish I hadn't written it that way,
	3	that just isn't accurate."  Or "I overstated it," or
	4	"I got it wrong."  Are you saying that about this
	5	document?
	6		A.	I guess I can say that if I realized
	7	how you might misinterpret the thing, I would have
	8	put a little footnote in here for you to help make
	9	sure you didn't misinterpret it.
10		Q.	And that's because you think that what
11	I'm doing, as you've said before, is
12	mischaracterizing what's here; correct?
13		A.	Several of your questions I believe
14	have mischaracterized it.
15	       Q.     Now, suppose, Mr. Gates, that you have
16	to worry not about what I think about this memo,
17	which is really irrelevant, but only about what the
18	trier of fact thinks about this memo.  Assume that a
19	neutral trier of fact is going to look at this memo
20	in a fair and balanced way.  Would you say to that
21	neutral trier of fact "I really shouldn't have
22	written this.  This really doesn't reflect my views. 
23	I made a mistake"?  Or would you say "If you read the
24	whole thing and read it fairly, that's what I
25	believe"?
			649
	
	1		A.	If they understood what it was about, I
	2	wouldn't feel any need to amend or change it.
	3		Q.	Okay, sir, that's -- I mean on that
	4	basis, I think we can leave it to the trier of fact
	5	to determine what it means.  Because I think the one
	6	thing -- you believe this memo is clear, don't you?
	7		A.	I don't know what you mean by that. 
	8	You've made it clear that somebody can misinterpret
	9	this memo.  Whether that is being done maliciously or
10	not, I don't know.  So now I understand that somebody
11	who doesn't understand the subject matter of the memo
12	can misinterpret it.  In particular you can
13	misinterpret what is meant there.
14		Q.	Well, you've told us that extensions to
15	HTML that you are referring to here were the Trident
16	extensions, haven't you, sir?  That's what you've
17	said?
18	       A.	And general principals about HTML
19	extensions, yes.  
20		MR. HEINER:  Will the Antitrust
21	Division of the United States, when it tries this
22	case, present information to the trier of fact so
23	that the trier of fact understands what HTML is, what
24	Trident is and so forth, or will it present snippets
25	and fragments as it did in the fall in the consent
				650
	
	1	decree case?  
	2		MR. BOIES:  I believe the trier of fact
	3	will have this entire document and we will ask the
	4	trier of fact to read this entire document and we
	5	will present to the trier of fact -- and if we don't,
	6	you will -- everything that either of us can think of
	7	that relates to the subject matter of this.  
	8		One of the things about a trial is we
	9	both get our shot and if you think there is anything
10	that you can say to the trier of fact that will get
11	the trier of fact to interpret this differently than
12	I have, take your best shot.  
13		MR. HEINER:  All I'm saying is that
14	even the plaintiff in an action has an obligation as
15	an officer of the court to present facts in a summary
16	judgment motion, in a complaint, in a motion for
17	preliminary injunction or at the trial so that the
18	court can understand the full set of facts.
19		MR. BOIES:  We will continue to do
20	that.
21	       Q.	Let me show you a document marked as
22	Government Exhibit 394.  This purports to be an
23	e-mail dated February 4, 1995, or at least a message
24	dated February 4, 1995 at 12:04 p.m. regarding
25	"Frosting and O'Hare."  
				651
	
	1			(The document referred to was marked
	2	by the court reporter as Government Exhibit 394 for
	3	identification and is attached hereto.) 
	4		Q.	BY MR. BOIES:  Have you ever seen this
	5	document before, sir?
	6		A.	I think Mr. Houck showed it to me.
	7		Q.	Other than whatever was shown at your
	8	deposition, have you ever seen this document before?
	9		A.	No.
10		Q.	All right.  Let me ask you to look next
11	at Government Exhibit 395.  This purports to be a
12	memo or message from you dated February 19, 1997, to
13	Mr. Allchin with copies to Mr. Maritz, among others.  
14			(The document referred to was marked
15	by the court reporter as Government Exhibit 395 for
16	identification and is attached hereto.) 
17		Q.	BY MR. BOIES:  Did you send this
18	message on or about February 19, 1997?
19		A.	I don't remember sending the message.
20		Q.	The second message here in this exhibit
21	is a message from Mr. Allchin to you dated 
22	February 18, 1997, at 5:17 p.m. with a copy to
23	Mr. Maritz.  Do you see that?
24		A.	Yes.
25		Q.	And am I correct that when you sent
					652
	
	1	your message, you enclosed this earlier message from
	2	Mr. Allchin with your message?
	3		A.	That's right.  The default reply
	4	command does the enclosure.
	5		Q.	Let me ask you to look at the second
	6	page, the first full paragraph in which Mr. Allchin
	7	writes to you "I am convinced the path we're on is
	8	the wrong one.  We are playing into Netscape's
	9	strengths and against our own.  I hear lots of words
10	about how the software will of course be 'better' on
11	Windows because we have more people working on
12	Windows, but I can't sell abstract statements like
13	this."  
14			Do you see that?
15		A.	Uh-huh.
16		Q.	He then goes on in the very next
17	sentence to say "We focus attention on the browser
18	battle where we have little marketshare instead of
19	focusing the battle at integrating things into
20	Windows where we have marketshare and a great
21	distribution channel."  
22			Did Mr. Allchin write this to you on
23	February 18, 1997?
24		A.	I'm not sure.
25		Q.	Did Mr. Allchin communicate that to you
					653
	
	1	at some point, whether in February, 1997 or some
	2	other time?
	3		A.	I know Jim was a big advocate of
	4	increasing the integration features to make them even
	5	stronger.
	6			MR. BOIES:  May I have the question
	7	read back, please.
	8			(Record read.) 
	9		Q.	BY MR. BOIES:  May I have an answer to
10	that question, sir?
11		A.	That's what I answered.
12		Q.	I'm not asking you what Mr. Allchin 
13	was a big advocate of.  I'm asking whether he
14	communicated this to you at some point?
15		A.	Those specific words?  
16		Q.	Or what you understand to be the
17	substance of those words.
18		A.	In looking at the substance of those
19	words, I can say the one part I do remember him
20	communicating is that he was a big advocate of
21	strengthening even further the integration benefits
22	of the browser technology in Windows.
23		Q.	Well, sir, when he talks about
24	integrating the browser technology into Windows,
25	which he does a little later, what he says is, 
					654
	
	1	"When IE 4 was first discussed, we were 'integrating
	2	the browser into Windows.'  That is what we told
	3	everyone.  That was a strong message for Windows. 
	4	That message is now gone since IE 4 is going onto all
	5	platforms.  It won't be as 'integrated' (whatever
	6	they means technically) but all the words about 
	7	WebPC and the like convince me we are determined to
	8	put a gun to our head and pull the trigger."  
	9			Now, did he tell you that, Mr. Gates,
10	in or about February of 1997?
11		A.	I don't remember him using those words. 
12	They're colorful enough.  Sometimes I might remember
13	that, but I don't remember that.
14		Q.	All right, sir.  Let me ask you to look
15	at a document that has been marked as Government
16	Exhibit 396.  And this purports to be some questions
17	and answers on "The Use and Misuse of Technology" by
18	Bill Gates dated October 24, 1995, copyrighted 1992
19	to 1995 by the Microsoft Corporation.  
20			(The document referred to was marked
21	by the court reporter as Government Exhibit 396 for
22	identification and is attached hereto.) 
23		Q.	BY MR. BOIES:  Do you recall preparing
24	these questions and answers, sir?
25		A.	I know I was at a meeting where this
					655
	
	1	was worked on.
	2		Q.	And did the statements set forth here
	3	reflect your views at the time?
	4		A.	I don't remember specifically these
	5	sentences, but I have no reason to doubt this is what
	6	was discussed and put into the column.
	7		Q.	And you understood that when this was
	8	prepared and, as you put it, put into the column,
	9	that it was going to be published, did you not, sir?
10		A.	Yeah, the column is published.
11		Q.	Where is the column published?
12		A.	A number of newspapers.
13		Q.	Now, when you refer here on the second
14	page, fourth line, to "winning for Microsoft a larger
15	share of the market for Internet browsers," do you
16	see that?
17		A.	No.
18		Q.	It's on the second page, fourth line --
19		A.	Oh, you're on the second page.  Let me
20	just read this.  
21			Okay, go ahead.
22		Q.	When you refer in here to "winning for
23	Microsoft a larger share of the market for Internet
24	browsers," do you see where you say that?
25		A.	Yes, it's part of a sentence here.
					656
	
	1		Q.	What did you mean by "the market for
	2	Internet browsers," sir?  
	3		A.	I assume I meant usage share of
	4	browsers on the World-Wide Web.
	5		Q.	You then go on in parens to say "An
	6	Internet browser is software that lets an individual
	7	roam the worlds of information available on the
	8	Internet.  Microsoft's browser is called the Internet
	9	Explorer."  
10			Do you see that?
11		A.	Close paren.  Yeah.
12		Q.	Close paren and then close quote, since
13	I'm quoting it.  
14			Did you believe that was an accurate
15	statement at the time that you made it and published
16	it?
17		A.	In trying to give an explanation to the
18	broad audience that the column was aimed at, yes, I
19	thought it was a good way of describing it to that
20	audience.
21		Q.	Let me ask you to look at a document
22	that's been previously marked as Government 
23	Exhibit 398.  The first message here is one from Brad
24	Silverberg to you and others including Mr. Maritz and
25	Mr. Allchin dated October 3, 1994 at 6:42 p.m. 
					657
	
	1			Do you see that?
	2		A.	Say again.  
	3		Q.	The first message here is a message to
	4	you and others, including Mr. Allchin and Mr. Maritz,
	5	from Mr. Silverberg dated October 3, 1994, at 
	6	6:42 p.m., correct?
	7		A.	It appears to be.  
	8			(The document referred to was marked
	9	by the court reporter as Government Exhibit 398 for
10	identification and is attached hereto.) 
11		Q.	BY MR. BOIES:  And he references Marvel
12	and Capone.  Do you see that?
13		A.	Yes.
14		Q.	Marvel is a code word for what became
15	MSN; is that correct?
16		A.	Not the way he uses it here.
17		Q.	Oh, what does Marvel refer to here?
18		A.	Blackbird.
19		Q.	So here Marvel refers to Blackbird. 
20	And what does Capone refer to?
21		A.	I think an e-mail client that was a
22	feature of Windows.
23		Q.	And it also refers to Chicago.  
24		A.	In the next sentence.
25		Q.	Next sentence of Mr. Silverberg's
					658
	
	1	message to you.  What is Chicago, as you understand
	2	it here?
	3		A.	The name for the project that resulted
	4	eventually in the product Windows 95.
	5		Q.	And Mr. Silverberg writes you and
	6	Mr. Maritz and others that "There is no one in the
	7	world outside of Microsoft who will buy the argument
	8	that Marvel and Capone are 'part of Chicago.'"  
	9		A.	No, that's not --
10		Q.	That's not so?
11		A.	No.
12		Q.	Well, let me see.  He says "I will jump
13	in -- yes, we have to take them out of Marvel and
14	Capone too.  There is no one in the world outside of
15	Microsoft who will buy the argument that they are
16	'part of Chicago' so get the interfaces while others
17	don't.  This is an impossible sale."  
18			As you read this -- do you recall
19	receiving this?
20		A.	No.
21		Q.	Did you ever discuss it with
22	Mr. Silverberg?
23		A.	I'm not sure.
24		Q.	Did you ever discuss with
25	Mr. Silverberg or anyone else what he meant by "part
					659
	
	1	of Chicago"?
	2		A.	I'm not sure.  It's clear -- it's very
	3	clear that they're not referring to what you asked
	4	about.
	5		Q.	All right, sir.  Let me ask you about
	6	the third message down.  That is a message from you
	7	dated October 3, 1994 at 5:18 p.m.  Do you see that?
	8		A.	Yes.
	9		Q.	You write in the first line "It's time
10	for a decision on ShellBrowser."  Do you see --
11		A.	"iShellBrowser."  
12		Q.	"iShellBrowser."  And in the third
13	sentence you say "It's hard to know how much actual
14	market benefit iShellBrowser integration would
15	bring."  
16		A.	Third paragraph?
17		Q.	Of your message.  
18		A.	Not sentence.
19		Q.	Third paragraph of your message.  
20		A.	Right.
21		Q.	First sentence.  
22		A.	Right.
23		Q.	"It's hard to know how much actual
24	market benefit iShellBrowser integration would
25	bring."  Do you see that?  
					660
	
	1		A.	I see it.
	2		Q.	Do you recall writing that in or about
	3	October, 1994?
	4		A.	I don't recall the specific message.  I
	5	recall the general issue about the iShellBrowser
	6	APIs.
	7		Q.	The next paragraph, the first line you
	8	talk about how Microsoft is in "a real struggle
	9	versus Notes."  Do you see that?
10		A.	Yes.
11		Q.	What do you mean by "Notes" when you
12	say that Microsoft is in a real struggle against
13	notes?
14		A.	I mean Notes.
15		Q.	Can you explain what Notes is?
16		A.	It's a product called Notes.
17		Q.	Produced by whom, sir?
18		A.	You can say Lotus or IBM or there's
19	actually the company who wrote it, I forget their
20	name.
21		Q.	But in any event, not Microsoft;
22	correct, sir?
23		A.	That's right, not Microsoft.
24		Q.	And is it true that Microsoft in or
25	about October of 1994 was in a real struggle against
					661
	
	1	Notes?
	2		A.	I think some people would say yes and
	3	some people would say no.
	4		Q.	You said yes, though, right?
	5		A.	Apparently in an e-mail in 1994, I said
	6	"we are in a real struggle versus Notes."
	7		Q.	And in the next paragraph, the fifth
	8	paragraph of your message, you say "I have decided
	9	that we should not publish these extensions.  We
10	should wait until we have a way to do a high level of
11	integration that will be harder for the likes of
12	Notes, Wordperfect to achieve, and which will give
13	Office a real advantage."  
14			Do you see that?  
15		A.	Yes.
16		Q.	Did that reflect your views in October
17	of 1994?
18		A.	That sentence taken out of context or
19	the whole e-mail?  
20		Q.	That sentence in the context of this
21	e-mail.  
22		A.	I don't think -- in the context of the
23	e-mail, I have no reason to think that it didn't.
24		Q.	What I'm asking again is, fairly read
25	in its entirety, does this message from you reflect
					662
	
	1	your views at the time that you wrote it?  
	2		MR. HEINER:  The question assumes --
	3		MR. BOIES:  That he wrote it.  
	4		MR. HEINER:  Okay.
	5		THE WITNESS:  If you're asking about
	6	the whole message, I have no reason to think I didn't
	7	write that message or that it didn't reflect my
	8	thinking at the time.  I haven't actually read the
	9	whole message, but I'll still say that.
10	       Q.	BY MR. BOIES:  Okay.  Let me ask you to
11	look at a document marked as Government Exhibit 399. 
12	This purports to be a message from you to Brad
13	Silverberg with a copy to Paul Maritz and others
14	dated January 8, 1996.  
15			(The document referred to was marked
16	by the court reporter as Government Exhibit 399 for
17	identification and is attached hereto.) 
18		Q.	BY MR. BOIES:  Did you send this
19	message, sir?
20		A.	I don't remember it specifically.  Do
21	you want me to read it?
22		Q.	If you need to to answer my questions. 
23			This is on a subject of Steve Case of
24	America Online; is that correct?
25		A.	Yes.
					663
	
	1		Q.	In the second paragraph you write that
	2	Mr. Case said that he viewed Microsoft as
	3	"technically behind Netscape but credible enough to
	4	do a very good job."  Do you see that?
	5		A.	Uh-huh.
	6		Q.	Did Mr. Case tell you that?
	7		A.	With respect to IE 2, the product we
	8	were shipping.  But later they had a chance to see
	9	the work we were doing and changed that view.
10		Q.	Is there a document that you're aware
11	of which reflects their changed view?
12		A.	Almost certainly.
13		Q.	Have you seen that document in the last
14	six months?
15		A.	No.
16		Q.	Do you know who that document was from?
17		A.	Oh, I think -- I know there are
18	technical discussions subsequent to this where AOL
19	came away impressed with the componentization work we
20	were doing and how it was superior technically with
21	what they had seen anyplace else.
22		Q.	My question right now is not what AOL's
23	view was.  You told me that and I asked you if there
24	was a document that reflected that they changed their
25	position?  
					664
	
	1		A.	Yes.  So I should have gone on to say
	2	that after they came out and saw that technology,
	3	it's likely that somebody -- either in e-mail --
	4	recorded their impressions at that time.
	5		Q.	Do you recall actually seeing such a
	6	document, sir, ever?
	7		A.	I recall being told that they were
	8	impressed that we had the best technology.
	9		Q.	Do you recall ever seeing a document
10	that reflected that?
11		A.	I'm not sure if it was verbal or
12	e-mail, but I remember being told that after they had
13	come out and seen the componentization technology as
14	part of IE 3, they viewed it as the best technology.
15		Q.	When you say verbal there, you mean
16	oral, not written down in e-mail or written memo
17	form; is that correct?
18		A.	Yes.
19		Q.	Let me ask you to look at a document
20	previously marked as Government Exhibit 400.  The
21	second item here is a message from you to Steve
22	Ballmer, Paul Maritz, Jim Allchin, Christine Turner
23	on the subject of IBM dated October 30, 1997; is that
24	correct?
25		A.	It appears to be.
					665
	
	1			(The document referred to was marked
	2	by the court reporter as Government Exhibit 400 for
	3	identification and is attached hereto.) 
	4		Q.	BY MR. BOIES:  Did you send this
	5	message, sir?
	6		A.	Let me look at it.  
	7			I don't remember specifically, but this
	8	kind of topic was being discussed, so I have no
	9	reason to doubt this is a piece of e-mail I wrote.
10		Q.	This relates to a conversation you had
11	with Gary Stimac, is that correct?
12		A.	Not strictly.
13		Q.	Does it relate in part to that?
14		A.	Yes.
15		Q.	And did Mr. Stimac tell you that he was
16	thinking about taking a job with IBM?
17		A.	I think he did.
18		Q.	And did he tell you that one of his
19	concerns was whether IBM's relationship with
20	Microsoft would be a problem?
21		A.	I see that in the e-mail.  I don't
22	remember it specifically.
23		Q.	Do you remember people at IBM being
24	concerned about IBM's relationship with Microsoft
25	being a problem?
					666
	
	1		A.	No.
	2		Q.	Do you remember Mr. Stimac telling you
	3	that he was concerned about whether IBM's
	4	relationship with Microsoft would be a problem either
	5	here or -- or at any other time?
	6		A.	No, I don't remember that.
	7		Q.	In response to that you say that you
	8	told him that "The Java religion coming out of the
	9	software group is a big problem."  Do you see that?
10		A.	Uh-huh.
11		Q.	Did you tell Mr. Stimac that?
12		A.	I don't remember telling him that.
13		Q.	Now, when you talk about the Java
14	religion coming out of the software group, you're
15	talking about IBM's software group; correct, sir?
16		A.	I'm not sure.
17		Q.	Well, this sentence immediately follows
18	Mr. Stimac purporting to be concerned about whether
19	IBM's relationship with Microsoft would be a problem
20	and immediately precedes a sentence in which you say
21	you told him that IBM refused to big anything related
22	to Backoffice.  
23		A.	Yeah.  That doesn't relate to the IBM
24	software group.
25		Q.	But it relates to IBM; correct, sir?
					667
	
	1		A.	Yes.
	2		Q.	This whole paragraph relates to IBM;
	3	correct, sir?
	4		A.	Primarily.
	5		Q.	So when you say that you told
	6	Mr. Stimac that the Java religion coming out of the
	7	software group is a big problem, do you really have
	8	any doubt that you were talking about IBM's software
	9	group?
10		A.	Well, there was a lot of joint work
11	between IBM people and Sun's people and other
12	companies, and so it's very hard to draw a line
13	between the IBM software groups and other people's
14	software groups.
15		Q.	Does that mean that it is your
16	testimony here under oath that when you refer to the
17	software group in this sentence, you don't know
18	whether you were talking about the IBM software
19	group?
20		A.	I'm certainly talking about software
21	groups that IBM is at least a part of.
22		Q.	You go on to say that "they continue to
23	use their PCs to distribute things against us."  
24			Is the "they" that you are referring to
25	there IBM?
					668
	
	1		A.	I think so.
	2		Q.	And is the "us" there Microsoft?
	3		A.	I think so.
	4		Q.	And next sentence says you told
	5	Mr. Stimac that "they are dabbing in NCs in a way we
	6	don't like."  
	7			Is the "they" there again IBM?
	8		A.	Apparently.  I don't know what dabbing
	9	is.
10		Q.	I was going to ask you that.  
11			The next paragraph you say, "Overall we
12	will never have the same relationship with IBM that
13	we have with Compaq, Dell and even HP because of
14	their software ambitions.  I could deal with this
15	just fine if they weren't such rabid Java backers." 
16			Now, when you refer in that sentence to
17	"they" as in "I could deal with this just fine if
18	they weren't such rabid Java backers," you're again
19	talking about IBM; correct?
20		A.	Parts of IBM.  It's important to
21	distinguish different groups in IBM.
22		Q.	And the different groups in IBM would
23	include perhaps, among others, the software group as
24	one and the PC group as another; correct?
25		A.	That's right.
					669
	
	1		Q.	At the end of that you say that you are
	2	willing to take some risk in improving the
	3	relationship and you think that steps ought to be
	4	taken to approach them, and you end by saying "We
	5	should position it as let's do some things that are
	6	good for both of us but which require some of the
	7	rhetoric to be lowered on both sides.  On their side
	8	I mean Java and NC."  
	9			And "their side" you're talking about
10	IBM's side?
11		A.	I think so.
12		Q.	And what you're saying is that you want
13	a message conveyed to IBM that in order to improve
14	the relationship, you want some of their rhetoric
15	lowered on Java and NC?
16		A.	No.
17		Q.	No?  Did you want IBM to lower their
18	rhetoric on Java?
19		A.	I actually explain in this message that
20	I thought the rhetoric was actually hurting IBM
21	itself, independent of Microsoft.
22		Q.	Did you think it was hurting Microsoft?
23		A.	I wasn't sure.  In terms of specifics,
24	I wasn't sure.
25		Q.	When you say that you could deal with
					670
	
	1	IBM's relationship just fine if IBM wasn't such rabid
	2	Java backers, weren't you saying that you thought
	3	that IBM's rabid backing of Java was bad for
	4	Microsoft?
	5		A.	I know at this time we thought some of
	6	the claims around Java were just plain false and
	7	weren't doing customers any favors by leading them
	8	down a belief that certain things were solved that
	9	were not solved.
10		Q.	My question, Mr. Gates, is in October
11	of 1997, did you believe that what you refer to here
12	as IBM's rabid backing of Java was something that was
13	hurting Microsoft?
14		A.	I can't point to any particular hurting
15	that it was doing.  We didn't think it was accurate
16	in terms of what technically could be achieved with
17	Java.
18		Q.	Let me put the question this way.  In
19	or about October of 1997, did you want to stop IBM
20	from being what you refer to here as a rabid Java
21	backer?
22		A.	We thought some of the rabidness was
23	hurting IBM as well as the industry as a whole.
24		Q.	Did you believe it was hurting
25	Microsoft, or were you just doing this as sort of a
					671
	
	1	public spirited company to try to help IBM from
	2	hurting itself?
	3		A.	I can't point to any particular damage,
	4	but we certainly would have preferred if the more
	5	extreme statements we didn't think were true, if they
	6	weren't pushing those forward.
	7		Q.	Mr. Gates, let me put it this way.  In
	8	October of 1997, were you trying to get IBM to reduce
	9	its public support for Java?
10		A.	I say in here that under some
11	circumstance the rhetoric should be lowered on both
12	sides and that I think that's -- you know, that makes
13	sense in certain circumstances.
14		Q.	I don't think you actually say in
15	certain circumstances, do you, sir?  You may have
16	meant that, I'm not saying you didn't mean it, I'm
17	just saying those words don't appear here, do they?
18		A.	No.  It's all about "I am willing to
19	take some risk in improving the relationship and
20	think you should approach them on steps for
21	improvement."  It's in that vein that I talk about
22	rhetoric being lowered on both sides.
23		Q.	And then you go on to say that you mean
24	on IBM's side they lower the rhetoric on Java and NC;
25	correct?
					672
	
	1		A.	The rhetoric.
	2		Q.	And by rhetoric, you were talking about
	3	public rhetoric?
	4		A.	Definitely public rhetoric.
	5		Q.	And is it fair to say in October of
	6	1997 you were trying to get IBM to reduce its public
	7	rhetoric in support of Java?
	8		A.	I don't know what you mean "trying."  I
	9	talk about a circumstance in which both sides would
10	lower their rhetoric.
11		Q.	You were offering to lower your
12	rhetoric if they would lower their rhetoric; is that
13	fair?  Isn't that what you say right here?
14		A.	In the context -- this is about
15	improving the overall relationship, which is not
16	focused on the rhetoric.  It says in the context of
17	that improved relationship, I think both of us should
18	lower our rhetoric.
19		Q.	Indeed you say that the improved
20	relationship will "require some of the rhetoric to be
21	lowered on both sides."
22		A.	That's a statement about human feelings
23	that if our rhetoric is so high, it will be hard for
24	them to do their side of improving the relationship
25	and vice-versa.
					673
	
	1		Q.	You then go on to say on their side,
	2	IBM's side, you mean Java and NC.  
	3		A.	That's part of the rhetoric I'm
	4	referring to.
	5		Q.	Part of their rhetoric?
	6		A.	Yes.
	7		Q.	That you wanted them to lower; isn't
	8	that true?
	9		A.	No.
10		Q.	Okay.  Let me ask you to look at
11	Exhibit 401.  This is a message from you to
12	Mr. Ballmer and Mr. Chase with a copy to Mr. Maritz
13	and some other people also given copies dated 
14	August 15, 1997 at 4:07 p.m. on the subject of IBM
15	and Netscape; correct?
16		A.	Uh-huh 
17			(The document referred to was marked
18	by the court reporter as Government Exhibit 401 for
19	identification and is attached hereto.) 
20		Q.	BY MR. BOIES:  And you type in here
21	"Importance:  High."  
22		A.	No.
23		Q.	No?
24		A.	No, I didn't type that.
25		Q.	Who typed in "High"?
					674
	
	1		A.	A computer.
	2		Q.	A computer.  Why did the computer type
	3	in "High"?
	4		A.	It's an attribute of the e-mail.
	5		Q.	And who set the attribute of the
	6	e-mail?
	7		A.	Usually the sender sends that
	8	attribute.
	9		Q.	Who is the sender here, Mr. Gates?
10		A.	In this case it appears I'm the
11	sender.
12		Q.	Yes.  And so you're the one who set the
13	high designation of importance, right, sir?
14		A.	It appears I did that.  I don't
15	remember doing that specifically.
16		Q.	Right.  Now, did you send this message
17	on or about August 15, 1997?
18		A.	I don't remember doing so.
19		Q.	Now, you say that you had a meeting
20	with Jeff Papows; is that correct?
21		A.	I did have a meeting with Jeff Papows,
22	yes.
23		Q.	And the third paragraph from the bottom
24	you write "He doesn't want anything attributed to me
25	or he will get in trouble, but he says we can just
					675
	
	1	refer to all the rumors on the Web about what kind of
	2	deal is being done between Netscape and IBM."  
	3			Do you see that?
	4		A.	I do.
	5		Q.	At this point, that is, in or about
	6	August of 1997, were you aware prior to your
	7	conversation with Mr. Papows, that there was a
	8	prospect of a deal between Netscape and IBM?
	9		A.	There had been rumors of that, so yes. 
10	In fact, there had been deals.  There was rumors of a
11	new deal.
12		Q.	Let me ask you to look next at a
13	document marked as Exhibit 402.  The second message
14	on this exhibit is a message from you to Mr. Ballmer
15	and Mr. Maritz dated August 4, 1997 at 5:17 p.m.;
16	correct?
17		A.	It appears to be, yes.
18		Q.	Did you send this, Mr. Gates?
19		A.	I don't remember sending it, but I have
20	no reason to think that I didn't.
21			(The document referred to was marked
22	by the court reporter as Government Exhibit 402 for
23	identification and is attached hereto.)
24		Q.	BY MR. BOIES:  Okay.  Let me ask you to
25	look at Exhibit 403.  
					676
	
	1			MR. HEINER:  What was this last one?
	2			MR. BOIES:  403.  402 was the one just
	3	before this one.  This one is 403.  
	4			MR. HEINER:  Right, okay.
	5		Q.	BY MR. BOIES:  This is a message dated
	6	February 16, 1998, from Laura Jennings to you and a
	7	number of other people, including Mr. Allchin,
	8	Mr. Ballmer and Mr. Maritz.  
	9			Do you see that?
10		A.	Yes.  
11			(The document referred to was marked
12	by the court reporter as Government Exhibit 403 for
13	identification and is attached hereto.) 
14		Q.	BY MR. BOIES:  Did you receive this
15	e-mail in or about February of 1998, sir?
16		A.	I don't remember receiving it, but I
17	have no reason to think that I didn't.
18		Q.	Let me take you down to the next to
19	last paragraph on the first page.  The first sentence
20	says "One potential concern:  Brad mentioned to me
21	late Friday that there may be new concerns about our
22	plan to make Start a requirement for being in the IE
23	referral server, or at least there may be timing
24	issues related to your appearance at Senator Hatch's
25	hearings."  
					677
	
	1			Do you see that?
	2		A.	Yes.
	3		Q.	Do you recall a discussion of this in
	4	or about February of 1998?
	5		A.	Not with Laura.  But on the general
	6	subject, yes.
	7		Q.	Did Microsoft in fact make Start 
	8	"a requirement for being in the IE referral server"?  
	9		A.	No, I don't think we did.
10		Q.	Why not?
11		A.	I think the PR group thought it would
12	be controversial and we didn't see the benefit as
13	being worth having that controversy.
14		Q.	Let me ask you to look at a document
15	that has been marked as Exhibit 404.  The first
16	message here is a message to you and Mr. Ballmer with
17	copies to other people dated March 23, 1994 at 
18	9:13 a.m. on the subject of "IBM helps Lotus."  
19			(The document referred to was marked
20	by the court reporter as Government Exhibit 404 for
21	identification and is attached hereto.) 
22		Q.	BY MR. BOIES:  Did you receive this
23	message in or about March of 1994, sir?
24		A.	I don't know.
25		Q.	The message begins by describing how
					678
	
	1	IBM is helping in the selling of Notes.  Do you see
	2	that?
	3		A.	Yes.
	4		Q.	And at the end Mr. Kempin, who is the
	5	author of this, says "I am unsure if we need to see
	6	this as an organizational issue or an OEM issue."  
	7			Do you know what he means by that?
	8		A.	What's he talking about?
	9		Q.	Do you know what he is talking about?
10		A.	No.
11		Q.	He then says "I am willing to do
12	whatever it takes to kick them out, but strongly
13	believe we need a WW hit team to attack IBM as a
14	large account, whereby the OEM relationship should be
15	used to apply some pressure."  
16			Do you see that?
17		A.	Uh-huh.
18		Q.	You have to say yes for the record.
19		A.	I see it.
20		Q.	Do you know what Mr. Kempin means when
21	he writes to you about a "WW hit team"?
22		A.	He means a salesperson.
23		Q.	If he means a salesperson, why doesn't
24	he say salesperson, sir?
25		A.	It clearly means salesperson.
					679
	
	1		Q.	Are salespeople within Microsoft
	2	commonly referred to as WW hit teams?
	3		A.	If they're world-wide and if they're
	4	trying to sell to somebody who is a large account,
	5	you bet.
	6		Q.	And when your salespeople go out to
	7	sell large accounts, are they commonly referred to as
	8	needing a "WW hit team to attack IBM as a large
	9	account, whereby the OEM relationship should be used
10	to apply some pressure"?  
11		A.	No.
12		Q.	Did you say no?
13		A.	I said no.
14		Q.	Do you remember Mr. Kempin telling you
15	in March of 1994 that he was proposing that the OEM
16	relationship with IBM should be used to apply some
17	pressure to stop IBM from promoting the sale of
18	Notes?
19		A.	No.
20		Q.	Do you recall anyone ever telling you
21	that, sir?
22		A.	No.
23		Q.	Did you ever respond to Mr. Kempin and
24	tell him that no, you didn't think that Microsoft
25	ought to apply OEM pressure to IBM?
					680
	
	1		A.	I don't understand your question.
	2		Q.	Do you understand that Mr. Kempin is
	3	here proposing to you that Microsoft apply OEM
	4	pressure to IBM?
	5		A.	It doesn't say OEM pressure.
	6		Q.	I didn't say it said it, sir.  It says
	7	he is proposing that the OEM relationship should be
	8	used to apply some pressure on IBM; correct, sir?
	9		A.	You're asking me to read it?  
10		Q.	I'm asking you if that's what you
11	understand him to be saying.  
12		A.	What?
13		Q.	That he is proposing that the OEM
14	relationship should be used by Microsoft to apply
15	some pressure on IBM.  
16		A.	No, I don't think he is proposing
17	anything.
18		Q.	You don't think he is proposing
19	anything.  When he says that he strongly believes
20	that there needs to be a "WW hit team to attack IBM
21	as a large account, whereby the OEM relationship
22	should be used to apply some pressure," you don't
23	think that he is suggesting that Microsoft apply
24	pressure on IBM?
25		A.	I don't think he is making a proposal. 
					681
	
	1	It is one of the things he mentions, but it's not a
	2	proposal.
	3		Q.	Now, Mr. Kempin's message was a
	4	response to a message from you to Mr. Kempin and
	5	Mr. Ballmer dated March 20, 1994 at 11:29 p.m.,
	6	correct?
	7		A.	It appears to be, yes.
	8		Q.	And you write him in the first
	9	paragraph "This is one topic I really want to try to
10	get to the bottom of.  Why does IBM help Lotus so
11	much?  Is there anything we can do about this? 
12	Should it become an issue in our global relationship
13	with IBM?"  
14			Did you send this message to Mr. Kempin
15	and Mr. Ballmer in March, 1994?
16		A.	It appears I did.  I mean that's part
17	of the message I sent, it appears.
18		Q.	Now, when Mr. Kempin replied saying 
19	"We need a WW hit team to attack IBM as a large
20	account, whereby the OEM relationship should be used
21	to apply some pressure," did you understand him to be
22	responding to your questions?
23		A.	I don't remember receiving his mail.
24		Q.	All right.  
25			I have no more questions at this time. 
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	1	It's 3:15.  
	2			VIDEOTAPE OPERATOR:  The time is 
	3	3:16 p.m.  We're going off the record.  
	4			          * * *
	5   
	6   
	7   
	8   
	9			I hereby declare, under penalty of
10		perjury, that the foregoing answers are true
11		and correct to the best of my knowledge and
12		belief.
13			EXECUTED AT_____________, WASHINGTON, 
14		this_________day of________________, 1998.  
15   
16                      _______________________________
17                           BILL GATES
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20   
21   
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23   
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25   
		683
	



					684
	
		Released Pursuant to 15 U.S.C. 30

Copyright 1999 The Washington Post Company

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