MS exec denies knowledge, MS press release defies gravity

As a bit of light relief, we thought we'd analyse Redmond's latest bulletin


According to a Microsoft press release of today, Microsoft VP Cameron Myhrvold yesterday explained "the value of ISP contracts." A particular problem for Microsoft on this front is explaining the contracts that required that 85 per cent of the browsers distributed by participating ISPs should be Internet Explorer. In the press release Myhrvold explains this with flying colours - but in the trial transcript, it's a different matter. According to the release: "As a newcomer to the Internet at the time the contracts were negotiated, Microsoft did not have existing relationships with ISPs, Myhrvold said. His job was to develop such relationships and find ways to distribute Internet Explorer (IE) through the ISP channel." OK, so that means that Myhrvold, if he's doing his job, has an intimate knowledge of relations with individual ISPs, and certainly ought to know the terms and conditions of the contracts signed with the major ones, if not all of them. Now cut to the trial transcript: David Boies for the DoJ: Let me just clarify that because I think that's a helpful clarification. When I asked you on page 74, lines 15 through 19 [of the previous day's transcript] whether you knew perfectly well that AOL and everyone else in the OLS [Online Services - major ISPs] had to commit that 85 per cent of browsers shipped would be IE, and you said, "That's absolutely wrong," what you meant to be saying was that it may be the case that that is true, but it's absolutely wrong that you know it. Myhrvold: Yes sir, that's exactly how I meant to answer the question. That's what I meant when I said this. Now cut to the previous day's transcript Boies was referring to: Myhrvold: I'm sure I have seen the contracts for the online services folder. I certainly have not read them in the past year. I'm not familiar with all the requirements, so I cannot look you in the eye, sir, and say there's an 85 per cent requirement in those contracts. There may be, but I don't know that to be a fact. So did the lad originally try to deny, then retreat to denying knowledge? Not knowing, as we said earlier, would suggest he hadn't been doing his job. As we'll see, it's now a fact that it's not. But that's a fact he should know. Over to the Microsoft release again. It doesn't mention the curious contretemps over whether Myhrvold knew about 85 per cent or not: "Microsoft negotiated standard cross-promotional agreements with a few of the most popular ISPs, in which Microsoft agreed to feature those ISPs in the Windows 95 Referral Server (a feature that helps users sign up for Internet access), and the ISPs agreed to promote and distribute IE as their preferred browser. Those agreements included distribution targets for IE - some as high as 85 percent - but Myhrvold said Microsoft was more interested in its new relationships with the ISPs than in the specific terms of the contracts. He noted that the contracts were never enforced, and no ISP was ever removed from the referral server for failing to hit its targets." Note the inexactitudes in the above, and what a weasel expression "standard cross-promotional agreements" is. One might say that Microsoft ruthlessly targeted the top ISPs, (which Myhrvold, if he was doing his job, certainly ought to have known about), and that the 85 per cent was not a target, it was a contractual obligation. And the contracts were never enforced? Well, next time you're signing a draconian contract with MS, remember the 'only kidding' subtext. But if you're Compaq and you want to take IE off the desktop, don't bother. We'll stick with the release, because it gets better: "Although its ISP contracts were pro-competitive, Microsoft eliminated certain provisions in April 1998 because they were not material to Microsoft's business and were not being enforced." Pro-competitive? You should get danger money for writing releases for MS - but as we understand it, the PR company does get danger money. Regular readers will recall that in early 1998, as part of a 'routine review,' Microsoft's ISP contracts were loosened considerably. By a strange coincidence the European Commission was looking very closely at those very same contracts - Microsoft's amendments came close to assuaging the Commission's worries, but of course the two matters were entirely coincidental. Press release: "Myhrvold said Microsoft also discovered that the Windows Referral Server was not an important source of new users for ISPs. Between 1996 and 1998, only 2.1 per cent of new Internet users signed up for an ISP through the Windows Referral Server." So there you have it - the Windows Referral Server was a flop, therefore couldn't be used as a lever to force IE share commitments on ISPs, therefore the 85 per cent came off. Plus it made Brussels happier, but that was a coincidence. It was a good flop though. Release: "At the time the distribution agreements were waived in 1998, 56 percent of Internet users who got their Internet service from the ten ISPs in the Windows Referral Server used Netscape Navigator as their primary browser." Now over to His Billness: "We have an opportunity to do a lot more with our resources. Information will be disseminated efficiently between us and our customers with less chance that the press miscommunicates our plans. Customers will come to our 'home page' [sic] in unbelievable numbers and find out everything we want them to know." (Our italics) - Bill Gates, The Internet Tidal Wave, May 25 1995. (How Bill Gates discovered the Internet) Presumably, the press releases on Microsoft's site are pumping out everything we want them to know. ® Complete Register trial coverage


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