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  Microsoft Says New Book Disproves Antitrust Case

By Rajiv Chandrasekaran
Washington Post Staff Writer
Tuesday, September 29, 1998; Page E01

A soon-to-be-published book by two business professors that quotes employees of Netscape Communications Corp. admitting to technical and strategic missteps in their competition with Microsoft Corp. has emerged as a flash point in the government's antitrust case against Microsoft.

The book quotes some Netscape employees, including company co-founder Marc Andreessen, as saying they should have focused more on "quality control" in developing their Internet browsing software, according to people who have read a manuscript of the book, which is titled "Competing on Internet Time: Lessons From Netscape and Its Battle With Microsoft."

The book also quotes a Netscape employee as attributing the loss of two key business deals to distribute its browser software -- with America Online Inc. and Intuit Inc., a maker of personal finance software -- to software deficiencies, the people who read the manuscript said.

The Justice Department and 20 state attorneys general allege that Netscape lost the deals because Microsoft offered AOL and Intuit the ability to promote their products on the "desktop" of Microsoft's dominant Windows operating system. By doing so, the government contends, Microsoft illegally used the Windows software to distribute its own browser.

The book was written by David B. Yoffie, a professor at Harvard Business School, and Michael A. Cusumano, a professor at Massachusetts Institute of Technology's Sloan School of Management.

Although Microsoft's lawyers have obtained a copy of the manuscript from Netscape, they served a subpoena on the authors last week seeking, among other things, tapes of their interviews with Netscape employees. Harvard and MIT on Friday filed papers in a Boston federal court objecting to the subpoena.

Yoffie, reached by telephone last night, would not comment. Cusumano could not be reached.

A Microsoft spokesman called the manuscript a "major bombshell against the government's case."

"Our outside counsel believes that this book and the source tapes utterly disprove the central allegations the government is making," said Microsoft spokesman Mark Murray. "We understand that the book features various Netscape executives admitting that their problems are, to a large degree, Netscape's own fault through poor technology, inferior software code and sweeping business miscalculation."

A Netscape lawyer said yesterday that "there is little in the book that was previously unknown."

"If Microsoft's defense is resting on it, it's a fairly weak defense," said the lawyer, who contended that some of the quotes were taken out of context.

© Copyright 1998 The Washington Post Company

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