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Tuesday, April 23, 2002 - Page updated at 12:00 AM

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Testimony excerpts

Microsoft Chairman Bill Gates may have turned on some charm in the courtroom yesterday but he didn't pull any punches in his written testimony. Some excerpts:

On the states' remedy proposal's impact on Microsoft: "Microsoft would be greatly devalued as a company. Microsoft's market capitalization is based on the market's well-founded belief that Microsoft is on a path to deliver a wide range of breakthrough technologies that will generate new sources of revenue."

On what the company is seeking: "Our objective in trying to settle the case, and our objective now, is to arrive at a set of understandable rules that will govern our operating-system business so that we can better avoid protracted and contentious legal confrontations and focus on building great software."

On the "faulty premise" of the states' proposal: "The (proposal) and the non-settling states' witnesses speak of Windows as if it consisted of a small, self-contained and fully functional operating system and a collection of readily identifiable, add-on middleware products that might just as easily be distributed separately from the operating system. In fact, each version of Windows is designed as a single, integrated product that provides a broad range of functionality."

On the impact on Microsoft staff: "Faced with the prospect of building less valuable operating systems and reduced reward for doing do, I doubt that Microsoft could motivate talented software engineers to work on operating-system development, or that it would make sense to continue to invest in doing so."

On the impact on consumers: "Imagine the disappointment that would result if a consumer purchased a new Windows-based PC, only to discover that key new features were missing and various applications would not work at all because of missing (key code). (Computer makers) would have strong incentives to fragment Windows in this way because they would be paid by Microsoft competitors simply to remove code from Windows, or to remove code and replace it with competitors' code."

On the impact on the "PC ecosystem": "When PCs become less reliable because the quality of Windows has been compromised, when consumers must undergo retraining to operate different PCs because of differences in their user interfaces, when applications written for one version of Windows will not run on another version, the entire PC ecosystem will suffer."

On disclosing browser code: "The source code for Microsoft's browser technology is all of our Web-browsing technology. Once the source code is disclosed, there is nothing else of value in our browser-development work. Section 12 is akin to a requirement that BMW give the automobile industry free rights to use its engine technology or that Coca-Cola gives the secret formula for Coke to Pepsi (and other soda makers)."

On browser competition: "Why would AOL continue development of its own Web-browsing software if Microsoft's technology were available free of charge, with rights to all improvements for the next 20 years?"

• On the future: "Ten years is a very long time in the software industry. Ten years ago, Windows was just beginning to become broadly successful. Ten years before that, the PC industry barely existed. Given the constantly accelerating pace of innovation, I expect we will see more changes in the computing landscape in the next 10 years than in any prior 10-year period....

I am very concerned that any remedy in this matter that extends more than five years would subject Microsoft to constraints that would hinder Microsoft's ability to make changes to its technology or businesses that are necessary to respond to the development of new technologies or other changing circumstances."

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