Microsoft Is Facing More Telling E-Mails In Minnesota Lawsuit
Hundreds of Microsoft Corp. documents to be made public this week offer a new look at the tough tactics the company has used in its march to dominate the software industry.
The Microsoft e-mails and memos -- some as recent as 2000, others reaching back more than a decade -- are among the evidence being presented in a Minnesota antitrust trial that opened Monday. It is the first such trial since the government's 1998 case, in which courts found that Microsoft had illegally used its monopoly power.
Lawyers for Minnesota consumers argue that the evidence shows Microsoft used its Windows operating-system monopoly to drive its competitors from the market and to dominate sales of everyday office software such as word-processing programs, spreadsheets and e-mail.
The Minnesota evidence offers unusual glimpses into how Microsoft sees itself. In an August 1997 e-mail attempting to persuade Warren Buffett, chief executive of Berkshire Hathaway Inc., to invest in Microsoft and other technology stocks, Jeffrey Raikes, a Microsoft group vice president, said that others liken Microsoft's Windows to a "toll-bridge," collecting a $45 toll on every personal computer sold.
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Read Jeff Raikes's e-mail to Warren Buffett and Buffett's response. Adobe Reader Required.
By 2000, he wrote, Microsoft expected to be "transitioning the world to a new version" of Windows costing $80 each. "This is a 90%-plus margin business," he wrote. "There is an R&D charge to the business, but I'm sure the profits are probably as good as the syrup business!" -- a reference to Berkshire Hathaway's investment in Coca-Cola Co.
Mr. Raikes told Mr. Buffett that Microsoft wasn't interested in becoming a media company, as some in the technology industry suspected. The "real goal" of its huge investments in cable-television companies and cable set-top box technology was "to get an 'operating system' royalty per TV," adding that "10s of millions of TV's per year at $10-$20 per TV is a nice little 'operating system' business."
Mr. Buffett didn't take the bait. "Bill [Gates, Microsoft chairman] has an even better royalty [than Coca-Cola] -- one which I would never bet against, but I don't feel I am capable of assessing probability about," he replied.
The Minnesota jury trial, one of more than two dozen consumer class-action suits that have been filed since the federal case ended, seeks as much as $425 million for alleged overcharges by Microsoft from 1994 to 2001. Although Microsoft has settled other consumer suits, it has been unable to strike a deal in Minnesota. Win or lose, the more lasting impact of the case might be the e-mails detailing harsh attacks on Microsoft rivals.
Company officials say they believe the Minnesota case will fail. "There have been no overcharges," says Jim Desler, a Microsoft spokesman. "Our high-volume, low-cost business model has reduced consumer prices and increased value in software."
The federal antitrust trial focused on Microsoft's efforts to protect Windows from innovative Internet technologies in the mid-1990s. The Minnesota case begins even earlier, alleging that Microsoft also targeted competitors in both applications and operating-system software, ranging from Lotus Development Corp. and Novell Inc. to giant International Business Machines Corp.
Lotus, which dominated the spreadsheet business in the industry's early years, was a favorite target. In a 1988 memo, Mr. Gates calls for deep price cuts with a goal of "cutting Lotus' profit in half." Another strategy memo, responding to Mr. Gates, calls for a "Kill Lotus Plan."
It includes, among more-serious proposals, a "Santa Claus scenario" in which Microsoft would drive down Lotus's share price by price cuts, secretly buy 4.99% of the company, then launch a hostile takeover. "Assuming [Lotus Chief Executive Jim Manzi] wants to keep his job, we could then negotiate a 'greenmail' price of say $30 share," reaping $40 million in profit by selling the stock back to Lotus, the memo says.
Microsoft dismisses the memo as the musings of a midlevel manager that were never acted upon -- and points out that strong language in the heat of competition isn't illegal. Microsoft eventually did slash prices, bundling its products together into the now-dominant Microsoft Office package of applications; Lotus's 1-2-3 spreadsheet, the PC industry's first big hit, was driven into single-digit market share. Lotus, its future threatened, was bought by IBM in 1995.
The e-mails also show Microsoft targeting DR-DOS, an operating-system competitor, and OS/2, IBM's answer to Windows. Both products eventually failed, leaving Microsoft with more than 90% of the operating-system market.
Richard Hagstrom, an attorney for the Minnesota consumers, says the documents reveal a "war-like culture" within Microsoft and confirm that the company routinely used its control of the Windows interfaces, known as APIs, against competitors whose applications software depended on Windows to function properly.
In a Jan. 24, 1999, e-mail, for example, Mr. Gates complained about rival software called Linux. "Maybe we could define the APIs so that they work well with [Windows] and not the others, even if they are open," he suggested.
A Microsoft spokeswoman responded that "the plaintiffs' lawyers are relying on snippets taken out of context from very old documents," and said that Microsoft lawyers would rebut them during the course of the trial. "The mere act of resurfacing these tired and old allegations highlights the plaintiff's attempt to obscure the real issues in this case."
Mr. Gates and Microsoft's chief executive, Steve Ballmer, are expected to testify at the trial, which is being held at Hennepin County District Court in Minneapolis and is expected to last as long as three months.
微软内部文件曝光，勾勒垄断巨头发迹史
微软公司(Microsoft Corp.)成百上千份文件本周被公之于众，这些文件清楚地勾勒出一幅该公司在抢占软件业霸主宝座的竞争中所使用的各种强硬措施的全景图。
这些电子邮件和备忘录是在周一开始的明尼苏达州反垄断案庭审中提交的部分证据。其中，最近期的是2000年的文件，最早的可回溯至超过10年之前。这是美国政府在1998年微软反垄断案件后首次进行类似的庭审。法院在当时的庭审中判定微软非法使用其垄断权力。
明尼苏达州消费者的代理律师坚持认为，有证据显示，微软利用其Windows操作系统的垄断地位将竞争对手从市场上排挤出去，并操控包括文字处理软件、电子表格和电子邮件在内日常办公室软件的销售。
上述证据使得投资者极为难得地一窥微软是如何评价自己的。1997年8月，为劝说Berkshire Hathaway Inc.首席执行长巴菲特(Warren Buffett)投资于微软和其他科技股，微软集团副总裁Jeffrey Raikes发出一封电子邮件。他在该邮件中表示，其他公司将微软的Windows操作系统比作一座收费大桥，每销售一台装有Windows操作系统的个人电脑，微软将征收45美元的特许使用费。他表示，微软预计，到2000年，全球的电脑都开始使用新版的Windows操作系统，新系统的特许使用费为80美元/台。他写道，这项业务的利润率超过90%，当然，该业务肯定存在研发支出，但他确信其利润可能和果汁业务一样诱人。他提及果汁业务是因为Berkshire Hathaway持有可口可乐公司(Coca-Cola Co.)的股票。
Raikes告诉巴菲特，尽管科技业的部分人士猜测微软将成为一家媒体公司，但微软实际上对此不感兴趣。它在有线电视公司和有线电视机顶盒技术方面的巨额投资的真实目的是，向每台电视操作系统收取特许费。他补充道，每台电视每年收取10至20美元的费用，而数千万台电视机的特许费收入相当于操作系统收入的相当一部分。
但巴菲特不为所动。
公司管理人员认为，明尼苏达州的诉讼最终将败诉。微软一位发言人表示，公司没有收取过高的费用。公司高产量、低成本的商业模式降低了消费价格并增加了软件的价值。
美国联邦反垄断诉讼重点关注的是微软在上世纪90年代中期为保护其视窗操作系统不受日益革新的互联网技术影响所采取的行动。而明尼苏达州的诉讼涉及的时间更早，诉讼指控微软对运用软件和操作系统软件业的竞争对手都采取了行动，其中包括莲花发展有限公司(Lotus Development, Corp.)，网威公司(Novell Inc., NOVL)，以及国际商业机器公司(International Business Machines Corp., IBM)。
曾在电子表格软件业发展的初期占据了主导地位的莲花发展有限公司是微软主要的竞争目标。盖茨在1988年的一份备忘录中呼吁大幅下调价格，目的在于将莲花发展有限公司的利润削减一半。另一份回复盖茨的战略备忘录则呼吁采取消灭莲花发展有限公司的计划。
该计划的众多方案中包括了一项“圣诞老人”计划。其内容是，微软将通过下调价格压低莲花发展有限公司的股价，秘密买进该公司4.99%的股份，然后展开恶意收购。备忘录称，假设莲花发展有限公司首席执行长Jim Manzi希望保留其职位，则微软可以和该公司商谈一个“绿票讹诈”价格，比如说30美元，将股票卖回给莲花发展有限公司，微软即可获利4,000万美元。
微软否认了上述备忘录，称其是中层经理的设想，并未付诸实际。该公司同时指出，在面临激烈竞争时的强烈措辞是合法的。然而，微软最终确实下调了价格，将其产品捆绑在目前流行的Microsoft Office运用软件包中共同出售。而莲花发展有限公司的1-2-3电子表格作为个人电脑业首个大获成功的软件，市场占有率却下降至1位数。莲花发展有限公司由于前景受到威胁，在1995年被IBM收购。
电子邮件还显示，微软对与其相竞争的DR-DOS操作系统以及IBM针对Windows推出的OS/2也采取了行动。上述两种产品最终落败，微软在操作系统市场上的占有率则超过了90%。
代表明尼苏达州消费者的律师Richard Hagstrom称，文件揭示了微软内部带有战争性质的文化，并证实了该公司惯于利用其对Windows界面的控制来打击那些依靠Windows才能正常运行的运营软件的开发商。
例如，在1999年1月24日的一份电子邮件，盖茨对竞争对手的Linux操作系统进行抱怨。他称，微软或许可以将Windows界面作出限定，使其可以很好的服务于Windows，而不兼容其他软件－－即使这些软件的代码是公开的。
微软的一位发言人对此作出回答称，原告律师仅断章取义地引用了很久以前邮件的部分内容，并表示微软的律师将在庭审时对此进行反驳。她称，原告重提以前的指控内容表明了其混淆该案件实质内容的目的。
盖茨和微软首席执行长巴尔默(Steve Ballmer)将在审理中出庭作证。该案将在明尼阿波利斯Hennepin County地方法院审理，预计审理时间可能长达3个月
