Economist Frederick Warren-Boulton was cross-examined at the Microsoft antitrust trial Thursday after his written testimony was released the night before. Warren-Boulton told the court that Microsoft Corporation has an obvious monopoly in the operating system market, with 95% of the market locked into Windows OSes. Due to this monopoly, he said, Microsoft is able to keep prices high, padding its bottom line. As proof of this, he offered up an interesting statistic: Though Microsoft is only ranked 137th in the Fortune 500 for revenue, the company is 15th in profits and a stunning 3rd in profits as a percentage of its assets. Microsoft is in first place for market value.
"Do you think the states selected you because they knew already you were a critic of Microsoft?" a company attorney asked Warren-Boulton, trying to cast doubt on his credibility.
"I'd like to think they retained me more because I have some experience in the industry," he replied.
Microsoft attacked Warren-Boulton's claim that the company was a monopoly and asked him to explain what the biggest threats to Microsoft were. He replied that Netscape Navigator, Sun's Java, and Intel Corporation posed the biggest longtime threats to the company. Intel is an interesting choice but Warren-Boulton says the company is the only one with enough resources to challenge Microsoft. It is conceivable, he thinks, for Intel to enter the operating system market.
Intel is in "a special position" to enter the OS, he said, adding that they also had a great incentive to do so