Tapped personally by Microsoft Corp. Chairman Bill Gates to testify on the company's behalf at its antitrust trial, the head of a small Silicon Valley technology firm asserted in court yesterday that Microsoft has been a benevolent giant in the intensely competitive computer industry.
But a government attorney attacked the witness's credibility, arguing that he has long served as a public-relations advocate for Microsoft and that he has deliberately avoided competing with the software behemoth in return for special favors.
Gordon Eubanks, the chief executive of Internet software company Oblix Inc., came under attack in a heated cross-examination for his self-described strategy of staying out of Microsoft's cross hairs. In a 1993 newspaper interview that was introduced as evidence by the government, Eubanks, who then was the chief executive of software maker Symantec Corp., said that "we don't look to" compete with Microsoft. Instead, he said, "we look for [market] segments where we can be out from under their feet."
Symantec, which makes utility programs such as computer virus screeners that operate closely with Microsoft's dominant Windows software, also entered into a special agreement that enabled Symantec to get valuable technical information about new versions of Windows in exchange for promising to distribute Microsoft's Internet browser and other products.
The government contends that Symantec's relationship with Microsoft illustrates Microsoft's potent market power and how it uses that clout to get its way with others in the computer industry.
"You made a conscious effort not to compete with them because you were afraid they would stomp on you," government attorney David Boies said to Eubanks during one particularly heated moment. "Absolutely not," said Eubanks, his voice growing louder. "That is absolutely not true. Our business strategy was not to engage in bickering in the industry."
Eubanks maintained that Symantec chose the types of products to develop and sell based on market demand, but he eventually acknowledged that "an obvious criteria in success is who else is in the market."
Eubanks was Microsoft's second-to-last rebuttal witness. Next week Microsoft's economic expert, Richard Schmalensee, the dean of the Sloan School of Management at the Massachusetts Institute of Technology, will take the witness stand. After that, both sides will have a month to prepare closing arguments.
In low-key questioning by a Microsoft attorney yesterday morning, Eubanks argued that Microsoft legally obtained a "natural monopoly" with Windows. Eubanks contended, however, that Windows doesn't appear to have long-run monopoly power because it faces threats from new technologies such as the Linux operating system and Internet-connected electronic devices. At one point he reached into a coat pocket and took out a hand-held Palm organizer and pronounced it "a very powerful computer."
Eubanks also argued that Windows would decline in importance as more software applications are created to run directly on Internet browsers. His argument appeared to give both sides something to chew on. Microsoft attorneys believed that it helped make their case that the firm doesn't have a monopoly with Windows, but the government saw the comments as validating a key motive they are trying to prove: that Microsoft added an Internet browser to Windows to crush rival browser maker Netscape Communications Corp. because Microsoft believed Netscape's browser could supplant the importance of Windows.
The courtroom drama began after lunch, when Boies asked Eubanks about why he agreed to testify for Microsoft. Eubanks said he was picked by Gates, who told him that he "wanted someone with lots of experience in the industry to talk about the broad trends." Boies quickly sought to cast Eubanks as a biased commentator, pointing to Securities and Exchange Commission filings in which Symantec said it depended on a close relationship with Microsoft.
Boies later presented an e-mail from Eubanks to a Microsoft executive in which he agreed to write op-ed pieces in support of Microsoft. In the second paragraph of the two-paragraph message, Eubanks asked the executive to include Symantec's anti-virus software in a Windows Plus Pack.
When the message was read aloud, Eubanks protested that the two issues were "totally unlinked."
"It was just a coincidence?" Boies asked incredulously. "That's an excellent choice of words," Eubanks responded. With that, U.S. District Judge Thomas Penfield Jackson, who is presiding over the non-jury trial, tossed the document on his bench and shook his head.
CAPTION: Gordon Eubanks, now CEO at Oblix, was a Symantec CEO who in 1993 said he avoided competing with rival Microsoft.