AOL Exec Disputes Microsoft on Browser

WASHINGTON —  Turning the tables on a key business partner, an America Online Inc. executive on Wednesday rebutted Microsoft Corp.’s claims that AOL chose Microsoft’s Web browser because it was better than a rival product.

David M. Colburn, senior vice president of business affairs at AOL, insisted under cross-examination that the key reason his company embraced Microsoft’s Web browser was Microsoft’s pledge to bundle AOL’s software with its Windows computer operating system.

Microsoft’s deal with America Online, which is the nation’s biggest Internet service provider with 13 million subscribers, has emerged as a key issue in the landmark antitrust trial--now in its second week. The government contends that the deal is an example of Microsoft illegally leveraging its Windows monopoly to extend its dominance to Internet browsers and other emerging technologies.

Colburn was AOL’s chief negotiator four years ago during his company’s talks with Microsoft and Netscape Communications Corp. about obtaining browser technology for AOL subscribers.

Seeking to portray Microsoft’s success with AOL as simply the result of having superior technology, Microsoft’s lead trial lawyer, John Warden, introduced a series of e-mails from AOL officials, including AOL President Steve Case, questioning Netscape’s ability to build a browser that would work well with AOL’s software.

He then pressed Colburn to confirm that AOL chose Microsoft over Netscape because the software giant had a better software product.

“The most important factor in choosing between Microsoft and Netscape was getting software that worked with the [AOL] client, wasn’t it?” Warden said.

“No,” Colburn countered. “We looked at five factors, the most important of which was securing relative parity with MSN as far as the desktop was concerned.”

Colburn added that the other factors included how much AOL would have to pay for the browser, how well it functioned with Windows and whether AOL was free to offer other browsers.

Colburn also testified that AOL was worried about competition from the Microsoft’s own online service, the Microsoft Network or MSN. That software was already included in the Windows 95 operating system and was promoted with a prominent icon on users’ computer screens.

He said when Microsoft agreed to promote AOL with a nearly equally prominent icon, that sealed the browser deal with Microsoft.

“It was a close call on the technology,” Colburn added, “but what put it over the top was the distribution on the [Windows] desktop.”

AOL’s browser negotiations ultimately culminated in agreements with both Microsoft and Netscape in March 1996. But Microsoft’s browser was made the primary product and was included in AOL’s ubiquitous installation disks. In order to use Netscape’s browser, AOL users had to download the product, a comparatively inconvenient and time- consuming process.

Government lawyers said outside the courtroom that they were pleased with Colburn’s testimony, saying he confirmed that Microsoft was so eager to enter a distribution deal that would disadvantage Netscape that it sacrificed its own fledgling online service. (MSN was closed down and retooled as an Internet site by Microsoft earlier this year.)