Microsoft should have thought twice about bringing its first witness--MIT dean Richard Schmalensee--to the stand in its antitrust trial. In his first two days, Schmalensee has been manhandled by both the government lawyers and the judge overseeing the case.
On Wednesday, Schmalensee identified Linux, Palm, and the BeOS as potential competitors to Windows. This brought chuckles and a pointed question from Judge Thomas Penfield Jackson: Were the companies supplying either of these operating systems making any money?
"I would be stunned if they were making any serious money," Schmalensee replied.
Perhaps more damning for Schmalensee was the revelation that the man is a frequent flyer on the Microsoft defense circuit: He has appeared as a witness for Microsoft in the past and apparently custom-tailors his comments to the defense-du-jour. Government attorney David Boies said that Schmalensee's testimony in a Bristol lawsuit against Microsoft directly contradicts the testimony he is giving in this case.
Then on Thursday, Schmalensee was forced to admit that Microsoft has no effective competitors in the OS market: The Macintosh, which once represented the only clear threat, has far too few applications to be competitive anymore, for example. Schmalensee presented a list of possible competitors including Apple Computer, Red Hat, Corel, Sun, Netscape, AOL, and Oracle, to which Boies asked which were actually threats today. Schmalensee responded that none were.
"The most serious threat is the one that we cannot identify," he said. "A serious threat is that bright undergraduate with a great idea who will launch it in six months.
