COURT NOTES: On Monday June 14, Microsoft called AOL executive David Colburn as the first of its three rebuttal witnesses. Microsoft lawyer John Warden presented Colburn with documents in an effort to show how AOL considered dumping Internet Explorer in favor of Netscape, but decided to renew a contract out of public relations concerns shortly before merging with Netscape. He also presented an AOL plan to make a line of computers that only ran Netscape and their own Internet access software.
But Colburn was a waste of Microsoft's time since he had no knowledge of the documents Warden kept showing him. Judge Jackson suggested that perhaps AOL chairman Steve Case would have been a more appropriate witness, since he was involved with most of the documents in question. Colburn's testimony was so useless that Justice Department attorney David Boies cancelled his plans to cross-examine because Colburn's lack of knowledge on the evidence proved everything Boies intended to show.
When court resumed Wednesday (the cancelled cross-examination was scheduled for Tuesday), Microsoft's attorneys called former Symantec president Gordon Eubanks Jr. to the stand. Eubanks, who left Symantec in April to start Oblix, testified that Microsoft's "natural monopoly" in operating systems actually promotes growth in the computer industry by setting standards that make software development easy. He also claimed Microsoft's dominance will be short lived, since the company is being besieged by competition on all sides. Eubanks said technologies like handheld PCs and open-source development could dislodge Microsoft, and said that dismissing Linux as a non-threat would be "like discounting Windows in 1985."
The government's David Boies immediately questioned his impartiality, pointing out that both Symantec and Oblix depend on Microsoft's business - a fact Eubanks conceded during cross-examination. Boies then asked the witness if Symantec had ever had a 'First Wave Agreement' with Microsoft, giving it access to new software before competitors while requiring the company to give preferences to Internet Explorer. Eubanks denied that such an agreement ever existed, until Boies produced a copy of the contract in question. He also produced e-mail from several Oblix executives, discussing the acquirement of a similar contract for that company as well. Boies then revealed that when Bill Gates asked Eubanks to write a pro-Microsoft editorial for the New York Times, Eubanks responded with concerns about a deal Microsoft had struck to include competing McAfee anti-virus software in a Windows Plus Pack. The deal was promptly killed and Eubanks proceeded to write the article. When Boies asked if those occurences were coincidental, Eubanks replied that 'coincidental' was "an excellent choice of words."
On Friday court went into recess for the usual 3-day weekend with plans to resume the following Monday with Microsoft's final witness, economist Richard Schmalsee.

On June 18 Microsoft posted a patch for the latest security hole in Internet Information Server 4.0, some two days after a tool company released software designed to take advantage of it. The hole, described as a 'buffer-overflow', affects almost all of the estimated 1.3 million IIS servers running on the Web. But unlike previous IIS holes, this one can be exploited by all Internet users; not just someone with low level access to the server. That gives any cracker the ability to access a database running on the same computer, allowing them to post counterfeit pages or even steal personal information like credit card numbers or addresses from e-commerce customers. (The plague of security problems with IIS should be a consideration for anyone buying anything on the Internet. If a site uses IIS, think twice before using it.)
The bug was originally discovered on June 8 by the eEye Digital Security Team. According to eEye, Microsoft was immediately notified of the problem and a fix was promised to appearwithin the next few days. After several weeks Microsoft still had not released a patch and Ms employees stopped answering e-mail about the issue. So in an attempt to make Microsoft pay attention, the security team published their own patch, along with a "demonstration program" to exploit the hole. Microsoft immediately attacked eEye for releasing the program, describing the creation of such an exploit as "irresponsible" and "beyond comprehension." But the plan worked, forcing Microsoft into doing what it should have done in the first place: a workaround for the security hole was sent out less than 48 hours after eEye's moves. The Behemoth still blames the security firm for making the problem worse, but - as eEye pointed out - any moderately skilled cracker with knowledge of the bug could have created an exploit for it in less than two hours anyway.

Less than a week after Microsoft released the so-called upgrade, a major bug was located in Windows 98 SE. According to a notice on Microsoft's site, a typo in one of the file paths used by the operating system causes it to hang during power-saver suspension. SE was released as a minor update to Windows 98 and includes -for only $110 or $20 for the upgrade - bug patches, a Y2K fix, Internet Explorer 5 and technology for running multiple Internet connections over the same modem. A separate Service Pack of only much-needed bug fixes is expected sometime later this summer.

Microsoft attorneys working defense in the Caldera antitrust lawsuit recently filed nine motions, each designed to chop up Caldera's mountain of evidence by forcing the jury to consider each complaint individually. That could change the outcome of the trial, since each of Caldera's charges alone may not may not constitute illegal business tactics - while as a whole they very well could. The judge dismissed four of the nine motions outright, calling Microsoft's tactic an example of "grandstanding." A decision on the remaining motions is still pending.

In an unexpected move, Microsoft has dumped Wieden & Kennedy, its ad agency for the last five years. Wieden, creator of the 'Where do you want to go today' slogan, is being replaced by McCann-Erickson Worldwide Advertising. McCann already had a longterm contract to promote Windows 2000 and Microsoft reportedly decided it only needed one ad agency.
For the fourth year in a row, Forbes magazine has named Bill Gates as the world's richest man in its annual ranking of the world's wealthiest people. Gates, at $90 billion, has almost triple the wealth of the second richest, his longtime friend Warren Buffett, who was reported to be worth around $36 billion. Also on the list: Microsoft's long-absent other cofounder, Paul Allen (3rd - $30 billion), and company president Steve Ballmer, ranked 4th with an estimated 19 and a half billion dollars.

CORRECTION: In last week's NewsSource, we mistakenly reported that DOJ witness Edward Felten testified to finding some 30,000 marked bugs in one seventh of the Windows 98 source code. The actual number of bugs was 3,000, not 30,000. We apologize for the factual error, but not for the bugs.

_{Java clone adds Microsoft, sidesteps Sun
Microsoft's security secret
Microsoft goes on the offensive
Bill Gates Schmoozes the Hill
Java maven says Windows uniquely susceptible
Users balk at German deal with Microsoft
Strike! Ex exec has a ball leaving MS}