Microsoft Chairman, Mr Bill Gates, told his executive staff in an email message on Tuesday that America Online's proposed $4.2 billion acquisition of Netscape Communications is "certainly paradoxical" in view of a US government antitrust lawsuit alleging that Microsoft has hindered competition in the technology industry and injured Netscape.
The Justice Department, which sued Microsoft, "must be VERY dismayed at this merger," Mr Gates wrote in the one and a halfpage message, which was sent to his deputies early on Tuesday morning and provided to reporters by Microsoft's public relations department later in the day.
The Government alleges that Microsoft has used anti-competitive business practices to promote its Internet "browsing" software over a rival product made by Netscape. Microsoft officials argue that the price AOL is offering for Netscape shows that Netscape couldn't have been hurt that badly, but Government lawyers maintain that the acquisition does not exonerate the tactics employed by the software giant.
Tuesday's email was not the first time Mr Gates, the world's richest man, has spoken out against the Government's case. Last month, at an annual meeting of his company's shareholders, he called the Government's allegations "outrageous".
Among the practices targeted by the government was Microsoft's decision to distribute its browser for free, which forced Netscape to follow suit, depriving it of crucial revenues. But in his email, Mr Gates defended the practice, likening it to free network television and saying that revenue from ads placed on World Wide Web sites will generate profits.
"The traffic alone makes it a great business to make a popular browser even without charging users," Mr Gates wrote.