Lawyers for the government used their opening arguments to contrast sworn statements Gates had made on videotape in August with E-mail and memos written by Gates several years earlier, noting what they described as inconsistencies and contradictions.

The dramatic Gates video testimony, played on monitors around the court room, was juxtaposed with the earlier memos to form the centerpiece of government efforts to show that Microsoft illegally abused its dominant position selling software running personal computers to muscle out competitors and grab control of the Internet browser market.

"Clearly, these are the types of things the antitrust laws were designed to prevent," justice department outside counsel David Boies said.

Microsoft, which will offer its opening statement, has consistently denied abusingits market strength. The company's operating system software, such as Windows 98 and Windows NT, runs more than 90 per cent of personal computers.

Microsoft spokesman Mark Murray said the government's evidence included "more snippets today than a quilting bee." General counsel William Neukom called the excerpts from company documents "dangerously and unreliably out of context."

But in court, the company successfully opposed the government's request to release publicly the full documents from which the excerpts were cited.

The lawsuit, brought by the United States and 20 states in May, is rated by antitrust experts as one of the most important in recent times -- comparable to the US government suit against telephone titan AT&T Corp. in 1974.

Monopolies are legal if gained by offering better products or services but US law forbids the use of monopoly power to maintain market share or gain monopolies in other areas.

A key allegation by the government is that Microsoft went to extraordinary and illegalefforts to stifle the rapid expansion of Netscape Communications Corp. because it felt threatened by the fledgling Internet browser maker.

On Monday, Boies played in court excerpts of Gates' August 27 videotaped deposition and contrasted the chairman's statements with internal memos sent in 1995 by Gates about Netscape.

In the videotape, Gates said he did not know of Netscape's plans and was not involved in preparation for a pivotal June 21, 1995, meeting between Microsoft and Netscape.

Government lawyers alleged Microsoft offered at the meeting to refrain from making an Internet browser for most operating systems, if Netscape would not market its browser for Windows 95. Antitrust laws prohibit competitors from making agreements to divide markets and restrain competition.

"At this time I had no sense of what Netscape was doing," Gates, wearing an olive green suit, said in the deposition taken at the company's Redmond, Washington, headquarters.

But Boies asked the court to look at a May 1995 memo inwhich Gates said: "A new competitor born on the Internet is there is a very powerful deal of some kind we can do with Netscape."

Boies then played an excerpt of the tape where Gates was asked if Microsoft had considered investing in Netscape. Pausing to scratch his head, Gates squinted and replied: "I said that didn't make sense."

But before the 1995 meeting, Gates appeared to raise the possibility of investing. "Of course...we could even pay them money as part of the deal, buying some piece of them or something," Gates wrote in a May 31, 1995, memo presented by Boies. Gates also discussed offering Netscape other sweeteners in return for dividing the market, Boies said.

"I would really like to see something like this happen!!", Gates wrote in the memo.

In written testimony released late Monday by the justice department, Netscape chairman Jim Barksdale -- who was at the meeting -- said he was stunned by Microsoft's approach.

"I have never been in a meeting in my 33-year business career in which acompetitor had so blatantly implied that we should either stop competing with it or the competitor would kill us," Barksdale said. "In all my years in business, I have never heard nor experienced such an explicit proposal to divide markets."

Boies told the court that after being rebuffed at the meeting, Microsoft sought to enlist other companies in its efforts to wipe out Netscape's revenues and market share.

"How much do we need to pay you to screw Netscape? This is your lucky day," Gates is quoted as saying in an America Online Inc. summary of a January 18, 1996, meeting in which Microsoft tried to persuade AOL to drop the Netscape browser in favor of its product.

Boies said Microsoft had used a similar tactic in its efforts to deal with a perceived threat from Sun Microsystems' computer language Java. Boies argued that Gates saw the combination of Java and Netscape as a threat to displace Microsoft's monopoly position.

A February 20, 1997 memo by Gates recounted the possibility of offering atit-for-tat to leading chip-maker Intel Corp.

Gates said Microsoft would agree to reject overtures for assistance from Intel rival AMD if Intel would refuse to help Sun make Java run better.

Judge Thomas Penfield Jackson is presiding over the case, which is expected to last for six to eight weeks.