A letter Bill Gates wrote in 1990 imploring Andy Grove not to invest in a potential competitor was shown to jurors as part of a Minnesota class-action lawsuit against Microsoft.
MINNEAPOLIS (AP)In June 1990, Bill Gates wrote a letter that
began "Dear Andy" and ended with the Microsoft co-founder
imploring Intel Corp. chief executive Andy Grove not to invest in a
potential competitor, a jury was told.
The letter was shown to jurors Wednesday as part of a Minnesota
class-action antitrust lawsuit that seeks as much as $505 million
from Microsoft for overcharges for its Windows operating system and
Word and Excel programs.
Attorneys for the plaintiffs have said the letter shows
Microsofts willingness to use its near-monopoly with Windows to
Around 1990, Go Corp. was designing an early hand-held computer
expected to run on chips made by Intel. Go co-founder Jerry Kaplan
testified Wednesday that Intel was interested because Go planned to
use its chips, giving Intel a potentially significant new market.
And Kaplan wanted something from Intelits endorsement and the
cachet that it brought among technology investors.
"Intels endorsement could rocket a company to nearly assured
success," Kaplan testified. "Their cooperation and support would
attract the investment of everybody. Its like the President of the
United States coming out and saying, This is the guy."
Kaplan said Intel indicated it would invest around $10 million,
although Microsoft attorneys pointed out that Kaplan wrote in his
book that Intel promised $5 million. Either way, Kaplan said
Intels endorsement was worth more than the money.
E-mail sent by Microsoft executives at the time and displayed to
the jury show they viewed Go as a competitor because it wasnt
using Windows. One of the e-mails suggested Gates write to Grove to
dissuade him from supporting Go.
Gates three-page letter said an Intel investment in Go would
confuse the computer industry. He said Windows could be adapted to
hand-held computers, and if Intel wanted to make a hand-held
computer, it should work with Microsoft, not Go.
"I guess Ive made it very clear that we view an Intel
investment in Go as an anti-Microsoft move," Gates wrote. "...
Wed like to work with you to develop the market and to introduce
you to appropriate technology sources. Im asking you not to make
any investment in Go Corp."
Intel ended up giving Go $3 million, Kaplan wrote in his book.
But the strings Intel attached to the money were devastatinginstead of an endorsement, Intel demanded that its investment be kept secret, Kaplan said Wednesday.
An Intel spokesman declined to comment.
Go ended up using an AT&T chip in its hand-held computers. A
unit of AT&T eventually bought Go and closed the operation a short
time later, Kaplan said.
Microsoft attorney David Tulchin said outside the courtroom that
communication between Gates and Grove was common. In any case, he
said Gates effort to dissuade Intel from investing in Go failed,
because Intel ended up giving money to Go.
"Hes presenting this as if the reason he failed is because
Microsoft did something," Tulchin said. "The reason his company
failed is because his company failed."
The Minnesota case is expected to last several more weeks.
Microsoft has settled other cases similar to the Minnesota one.
It reached settlements with nine states and Washington, D.C.,
totaling $1.5 billion. Cases were dismissed in 16 other states.