MS accuses Liberate CEO of offering anti breakup deal

Supping with devil, dangers thereof...


Liberate Technologies CEO Mitchell Kertzman was yesterday accused of trying to cut a an interactive TV deal with Microsoft in exchange for his support in fighting a breakup of the company. As part of Microsoft's defence in the Unsettling States (the continuation of US v MS by other means) antitrust action Kertzman was confronted with emails that did indeed suggest something to this effect.

In March of last year he'd emailed MS exec Richard Emerson saying that Microsoft getting out of the interactive TV business by swapping it for Liberate stock would be a PR coup for Microsoft, and provide "evidence of a genuine significant move to a more industry-inclusive approach."

As indeed it would have done. Microsoft has poured money into the cable business to little obvious effect, but is as usual perceived as wishing to engulf and devour it. If it had effectively pulled out of the business instead and put its weight behind Liberate, then it would have been making a remarkable, uncharacteristic, inclusive move. Pundits would have been inspecting the teeth of that particular gift horse for years, and the States' attorneys might now be having a tough time explaining why Microsoft wasn't a nice company at all.

No, you're right, it's just too bizarre. Goodness knows why Kertzman was crazed enough to make the offer in the first place. In follow-up emails, however, he seems to have got perilously close to the line. He was yesterday saying that Liberate had lost business because of Microsoft anti-competitive activities, but in one mail to Emerson said he'd repeated "my opinion that Microsoft shouldn't be broken up" to a reporter. He explained this as part of an attempt to repair damage caused to the relationship by some other things he'd said, but was also put in the position of defending his description of Microsoft as "the Freddy Krueger of software" as all part of the rough and tumble of life in the software business.

Kertzman's difficulties here are at least understandable. In order to operate in the software industry you almost certainly have to do business with Microsoft, and if you do business with Microsoft you're almost certainly going to be making and receiving offers. These can cut both ways in the courtroom, as Microsoft's attorneys seem now to have learned. ®


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