Let's Go To The Videotape Armed with dueling tapes, the government and Microsoft quibbled over download times and modem speeds. Thanks to one strong witness, the software giant actually turned this sideshow into a moral victory--but was it too little, too late?
By Joseph Nocera

(FORTUNE Magazine) – THURSDAY, FEB. 11: Will Microsoft ever learn? That's the big question this morning at the Microsoft antitrust trial as the company's latest witness, Brad Chase, takes the stand. As usual, Chase's direct testimony was turned in as a written document; thus the first thing we're supposed to see in court is Chase's cross-examination by the government's lead prosecutor, David Boies. But as has been its recent practice, Microsoft wants to show a video first. And that's what has us shaking our heads. Wasn't it just a week ago that another slickly edited Microsoft video helped trigger the meltdown of James Allchin, a critical Microsoft witness? Yet here they go again. Boies, whose evisceration of the Allchin video ranks as the most memorable moment of the trial, practically salivates watching the new tape. For the rest of us, well, it sure looks like deja vu all over again.

Chase, 39, is Microsoft's top marketer of Windows. But his testimony is not really about marketing. It concerns browsers, including whether various "exclusive" deals in which Internet service providers (ISPs) agreed to use Microsoft's browser had the effect of locking Netscape out of the market. Chase, of course, asserts the deals did no such thing; after all, Netscape's Navigator browser can still be downloaded from thousands of Websites.

Chase's video, which is 20 minutes long, purports to show just how simple it is to download and install Navigator, a product that has been downloaded tens of millions of times by ISP consumers in the past few years--including, notes the witness, customers of the biggest ISP of all: AOL. (This matters because AOL famously opted for Microsoft's Internet Explorer over Navigator in a deal that Chase himself negotiated. The deal made Explorer the de facto browser for AOL's millions of subscribers.) But when the video gets to the portion where the actual download from the AOL Website is supposed to take place, the young Microsoft narrator announces, "We'll skip the rest of the download to save time." The entire courtroom bursts into laughter. How can you show how easy it is to download Navigator if you skip the download? Only Microsoft, we're all thinking.

Needless to say, Boies turns the rest of the day into "The Case of the Missing Download." How long did the download take? What was the speed of the modem? How long would the download have taken if it had been done in the home of a typical consumer rather than at Microsoft's corporate office? What other steps were left on the cutting-room floor? And on and on. When Boies thinks he's got a witness in his cross hairs, his tone becomes terse and urgent. That's how he is now.

But unlike Allchin, Chase never falls apart. With Microsoft's superfast corporate LAN, the download took ten minutes, he replies calmly. Yes, it would have taken a lot longer using a typical 56K modem--45 minutes to an hour, he concedes. But that's not so bad. "What most users do--what I do--is, you start the download," says Chase. "You go watch a couple of innings of the ball game and you come back and it's done." On his key point--that downloads are a snap--he will not be moved.

In the afternoon Boies returns to the video. First he tries to pick it apart frame by frame, just as he did so brilliantly with Allchin's video. Chase makes a series of small concessions, but nothing big enough for Boies. So the prosecutor takes a new tack: He announces that the government has its own video--one that shows what it's really like to download Navigator from AOL. And, he adds, he'd like to play it right now.

Microsoft's lead litigator, John Warden, leaps to his feet. Microsoft has never seen this video, he complains. Judge Thomas Penfield Jackson calls a quick recess to allow Warden to screen the tape. Afterward, Warden remains adamant. "We would like to have this deferred," he tells the judge, so Microsoft can have the weekend to "verify" it. "Fair enough," shrugs Jackson.

You can practically hear the groans in the press section. Since there's no court on Friday, and with Monday a holiday, we'll have to wait five days to see the government's dueling video. Five whole days! For the Microsoft press corps, this is an eternity.

TUESDAY, FEB. 16: Hey, wait a minute. Where are the fireworks? Where's the drama? Where's the prosecutor with his fiery "J'accuse!" and the witness crumpled in a heap, pleading for mercy? They're nowhere to be found. Today I recall the prescient words of Mary Boies, the prosecutor's wife. Just after her husband's devastating cross of Allchin, she said, "It's not always going to be like this. This is, after all, an antitrust trial."

Anticipating another Microsoft meltdown, a crowd has packed the courtroom this morning. Boies finally plays the government's video. Sure enough, it makes the Netscape download process via AOL seem much more complicated and time-consuming. At one point, Judge Jackson jumps in and complains that he's confused by the download process. Those comments will lead the news accounts in tomorrow's papers--and leave the inevitable impression that the great Boies has done it again.

But to my mind that's a false impression. On the contrary, today is one of Microsoft's best days since this thing began. Chase more than holds his own when questioned about the video. He even scores points by noting places where the government's narrator makes things sound more complicated than they actually are. The battle of the video soon fizzles into nothing.

The way Chase acts the rest of the day makes you think that maybe Microsoft is starting to learn after all. Boies throws up his usual nasty e-mails, but Chase, unlike Paul Maritz, sidesteps them without seeming evasive. Unlike Gates, Chase doesn't split hairs. Unlike Allchin, he doesn't fold. And unlike Cameron Myhrvold, he doesn't come across as argumentative. Myhrvold (brother of Microsoft chief technology officer Nathan) was up just before Chase, and by the time he got off the stand, Boies had cornered him into making perhaps the single biggest confession of any Microsoft witness. He admitted that Microsoft didn't want to be in a position where its browser sat on the same desktop as Netscape's because "we thought we would lose in a side-by-side choice."

As the day goes on and Chase seems to gather strength, it is Boies who seems flustered. For the first time since he's begun cross-examining Microsoft witnesses, he appears to be running out of gas. He's rambling, changing topics, throwing up e-mails only to abandon them a minute later. One e-mail is so old--it's dated 1990, before even the original Windows operating system was introduced--that during the spin session after court, Microsoft spokesman Mark Murray jokes: "What's the government going to do next? Introduce Chase's grade-school report card?"

Standing at the edge of the crowd of reporters is Bill Joy, the legendary co-founder and chief technologist of Microsoft's arch-enemy, Sun Microsystems. In town for a meeting, he has decided to take a peek at the trial. Sitting in the back row of the press section, he's looked alternately bored and bemused all afternoon. But when I ask his opinion of the trial, he expresses--not surprisingly--his shock at the e-mails that have been read in court. He is especially horrified by that 1990 one, in which a since-departed Microsoft employee boasts about having suggested to Intuit that they divide the market for personal-finance software. "I know what the remedy [for Microsoft] is," Joy mocks. "They need a code of conduct for those guys."

WEDNESDAY, FEB. 17: "How do you think your husband did?" a reporter asks Brad Chase's wife. "I think he did an awesome job," Judy Chase replies with a broad smile. "And I just hope it gets reported that way."

She's right. But his success--rare for Microsoft in this trial--takes longer to sink in on her husband. "It's going to take me some time to reflect on it," he tells me after he leaves the stand. As we talk, he still seems to be recovering from his David Boies cross-examination, an exhausting ordeal in which you can't let down your guard for a second.

He will say this: "I was very conscious of Boies' technique"--the prosecutor's tendency to rephrase questions in a way that corners a witness. "If his questions did not reflect what I had said, I would correct him," he says. Chase had seen enough of the trial to know that Boies is always reaching for high-impact revelations. "When he brought out that 1990 e-mail," Chase says, "that made me more confident. I knew then that he was grasping at straws."

Like everyone on the Microsoft team, Chase believes the company and its lawyers are doing much better in court than the press is giving them credit for. Boies, he believes, is creating "sideshows" designed to distract the press from the fact that he can't win on the merits. "The whole video thing was a red herring," Chase says. "The reality is that people can clearly download Netscape. The whole focus in this case is that we're foreclosing Netscape. And he can't prove that."

Chase, in fact, stopped reading press accounts while on the stand; he got "too frustrated," he says. That's probably just as well. Chase's performance notwithstanding, this has been a brutal week for Microsoft in the press. All week long, reporters have been writing lengthy stories about how severe the remedies might be if Microsoft loses. Or rather, when Microsoft loses. The tenor of those stories is that, even though this phase of the trial still has several weeks to run--and even though the judge's ruling probably won't come down until midsummer--it's all over but the shouting. Microsoft's share price has been tumbling all week, largely in response to these stories. Brad Chase was a strong witness for the company, no question about it. But for the press, his performance comes under the category of "too little, too late."

THURSDAY, FEB. 18: Today the Wall Street Journal publishes the latest in a string of tough-minded stories about the trial. Its front page openly questions the quality of Microsoft's defense. All day long, Microsoft's stock continues to fall, finally closing down more than $4 a share. At $146, it's nearly $30 off its high.

And all day long, Microsoft will be hammered anew in court. Its witness, John Rose, is a top executive of Compaq Computer. A barrel-chested man with slick-backed hair and a pinstriped double-breasted suit, he bears an uncanny resemblance to Jack Nicholson in the movie A Few Good Men. Any minute, we expect him to leap from the stand and scream, "You can't handle the truth!"

Yesterday, Rose seemed to offer little more than comic relief, as he preened for the press, strutted down the courthouse aisle, and gave Compaq promotional speeches in response to questions that called for a simple "yes" or "no." But this afternoon things suddenly get serious. Boies has e-mails and documents that imply that Compaq lives in fear of the software giant. The prosecutor's questions are terse and urgent. Rose, no longer smiling for the press, wipes a bead of sweat from his forehead. When Boies asks the witness if he knows about an incident in which a Compaq employee allegedly leaked confidential information about a Microsoft competitor to Microsoft, a Compaq attorney erupts. "A cheap trial trick!" he bellows. The witness professes ignorance. The reporters start scribbling furiously.

Judge Jackson calls a short recess. "A theatrical stunt," says Mark Murray, as reporters gather around him outside the courtroom. "What a sideshow," mutters another Microsoft flack. Boies leaves his spot at the podium and walks out among the press horde. "You can't make this stuff up," he says. "You just can't make this stuff up." He is grinning from ear to ear.