Netscape, Microsoft Trade Jabs Dispute Boosts Chances Of Another Antitrust Inquiry

The prospects of another antitrust inquiry into Microsoft Corp. grew Wednesday after Netscape Communications Corp. publicized what it described as an unlawful attempt by its rival to influence purchasing in World Wide Web software.

Microsoft denied any illegal activity and repeated assertions that Netscape had misportrayed Microsoft’s new software for businesses that have complex data systems and want to spread information on the Internet.

After a speech at the Macworld convention here Wednesday, Netscape chief executive James Barksdale said Microsoft was trying to force businesses to buy the more expensive of the two Microsoft products. That would be to the detriment of a Netscape program that can work with the cheaper product.

“It’s absurd they would try to enter some constraint of trade like this and get us to try to collude with them,” Barksdale said.

“Those sound like very strong words,” said Rich Tong, a Microsoft marketing vice president. He said Netscape wrongly determined and advertised that Microsoft’s Windows NT Workstation operating system could be used like its Windows NT Server product to provide data to lots of people over the World Wide Web.

“That’s not the intent,” Tong said.

The dispute, while confined to a hazy technical distinction in the Microsoft products, is a sign of greater animosity between the companies as they try to influence the future direction of computing.

Microsoft fired the first salvo last week, with a letter that insisted Netscape stop advertising that the lower-cost NT Workstation could be used as a foundation for Web server software, including Netscape’s.

Netscape responded Tuesday by saying it would do as it pleased. It also sent the response to the Justice Department, which has been watching Microsoft for several years. The department forced Microsoft to change some of its sales practices in 1994 and thwarted its acquisition of Intuit Corp. last year.

Justice Department spokesman Bill Brooks declined to comment specifically on Microsoft and Netscape.

Windows NT is a more sophisticated version of the Windows program that is familiar to many people who use personal computers. NT is designed to run more sophisticated programs securely over networks.

Microsoft on July 31 put two new versions of Windows NT on sale. Both have the same code as a foundation.

The one called Windows NT Workstation is intended for use on individual systems, like desktop PCs, and sells for $320. Windows NT Server, which has a starting price of $1,100, is intended for PCs known as servers that reside at the hub of a data network.

When the new versions came out, Netscape began advertising that an inexpensive way for companies to publish information on the Web was to equip a PC with the Windows NT Workstation operating system and Netscape’s Information Server program.

The workstation NT “will handle almost a million transactions a day, which is more than almost any Web site in the world, and therefore is perfectly adequate to run with our desktop server,” Barksdale said.

Clouding the dispute is a change Microsoft made to NT Workstation just before putting it on sale. It removed code that prevented NT Workstation from working with more than 10 computers simultaneously. But the restriction remains a legal point in the licensing agreement a customer gets when purchasing the program.

“We are concerned that … it’s not too slow in those very large usage configurations,” Tong said.

Microsoft hasn’t tested Windows NT Workstation to see if it can handle millions of requests for information the way NT Server can and doesn’t plan to.

“We have limited testing resources and that’s not what the product was designed to do,” Tong said. “You wouldn’t take a sport utility vehicle and take it out on a drag race.”

Barksdale said he doesn’t accept that explanation.

“They say it’s because they haven’t tested it,” Barksdale said. “It’s the same software as the server. They just want to get a higher price.”