It was another no-good, very bad day in court for Microsoft Corp. on Feb. 3. Fresh on the heels of embarrassingly confused videotape evidence that left Microsoft's lawyers in a lurch, the Justice Dept. seemed to score more points on two critical issues in its antitrust case. By the end of the day, the government had raised new doubts about Microsoft's reasons for merging browser technology into its Windows 98 operating system, as well as about that videotape presented in court on Feb. 2 that company lawyers hoped would be a key part of their defense.

With Microsoft Senior Vice-President James E. Allchin back on the stand, the government introduced a series of Microsoft E-mails that seemed to bolster its contention that beating browser rival Netscape was a key consideration in the decision to integrate Microsoft's browser, Internet Explorer, into Windows 98. In a Mar. 21, 1997, E-mail Allchin received from a colleague named Jonathan Roberts, Roberts said Internet Explorer has a far better chance of besting Netscape if it's integrated into Windows. "An integrated browser makes Netscape a nonissue -- a superfluous product for all but the most committed Netscape user," Roberts said.

Allchin himself wrote that integration would be critical in the competition with Netscape. In early 1997, he wrote that he was troubled by Microsoft's strategy of simply copying Netscape features and predicted that such a path was doomed to failure. "I am convinced we have to use Windows," he wrote. "It's the one thing they don't have." The most critical issue, he said, was to include an integrated browser on shipments to computer makers so that "Netscape never gets a chance on these systems."

The company has insisted that it merged the two programs to benefit consumers. And it says it came up with the idea as early as 1993, before Netscape was founded.

FASTER "FELTENIZED"? The government also is trying to show that the operating system and browser could be sold separately and that there's no benefit to merging them. A government consultant, Edward W. Felten of Princeton University, wrote a software program intended to demonstrate that the two could be separated even at this late date. But Microsoft countered with a videotape demonstration of a "Feltenized" computer that was supposed to show that the Felten program degraded the operation of Windows.

But on cross-examination on Feb. 3, Justice lawyer David Boies challenged the accuracy of the videotaped demonstration. And at the noon recess on Feb. 3, government experts scrutinized the tape more closely and alleged even more discrepancies. At times on the videotape, an icon was present and at other times it disappeared. The title bar at the top of the computer screen also showed different words at different times. At one point, instead of degrading Windows, it seemed as if the computer with the Felten program actually worked faster.

Eventually, Allchin admitted that more than one computer was used during the videotaping, though the tape seemed designed to leave the impression that it showed one continuous demonstration with one computer. The Internet Explorer segment that seemed to run more slowly than a Feltenized computer actually was a Feltenized computer, Microsoft officials said, but they had run Prodigy, which changed the wording on the text bar. There was no indication on the tape that Prodigy had been used. "We make very good software," sighed Microsoft Senior Vice-President for Law and Corporate Affairs William Neukom. "We don't make a very good tape."

Judge Thomas Penfield Jackson said Microsoft's actions "cast doubt on the reliability" of the tape. The company said it would make another demonstration tape with government officials present, and it asked that the new tape be played in court on Thursday, Feb. 4. While MSVideo 1.0 was clearly a flop, Microsoft is banking heavily that MSVideo 2.0 will save the day.

By Stan Crock in Washington