Microsoft Pays Netscape $750 Million to Settle Antitrust Suit

Thursday May 29th, 2003

Several people wrote in to tell us that Microsoft has agreed to settle the private antitrust suit filed against it by Netscape Communications Corporation last year. Microsoft will pay AOL Time Warner, Netscape's parent company, $750 million to end the litigation. In a related agreement, Microsoft will give AOL a seven-year royalty-free license to use Internet Explorer and a long-term license to use its Windows Media 9 Series technology. The two giants have also agreed to work together on digital media initiatives and establish interoperability between the AOL Instant Messenger and MSN/Windows Messenger networks. In addition, Microsoft will give AOL more technical information about Windows and help AOL to distribute its software to some PC vendors.

CNN/Money, CNET and all have articles about the settlement. More details are available in Microsoft and AOL Time Warner's joint press release.

Update! Further reports are available from Slashdot, MSNBC, PC Magazine, InfoWorld, InternetNews, ENT News, EE Times and the Associated Press (via InformationWeek). Meanwhile, CNET asks if the IE licensing deal means the end of Netscape.

Another Update! CNET now has an entire special coverage section on the deal, which includes a longer updated main article. The report has also been revised and other stories can be found at Wired News, BetaNews and Reuters.

Another Update! Microsoft's PressPass site has a transcript of a press conference call with Microsoft's Bill Gates and AOL Time Warner's Richard Parsons, which has been extensively referred to by many media reports. A collection of soundbites from Bill Gates is also available.

Another Update! Matt Kraai writes: "Salon is carrying an article on the Microsoft/AOL TW settlement and its effect on Mozilla. I found it via Boing Boing." To read the article, you'll either have to subscribe to Salon Premium or view a short ad, which will give you access to Salon for the day.

#24 The agreement

by pkb351 <>

Thursday May 29th, 2003 8:34 PM

You are replying to this message

Nowhere in the any of the articles including the AOL/MS press release does it state that the agreement mandates that AOL must use IE. MS may be thinking that they put one over on AOL. Just wait. MS has to provide AOL with OS details and use the Windows desktop to promote AOL software. I am of the belief (keeping my fingers crossed) that the next version of AOL's software will include Gecko.

Why do I feel this way?->

1. For one thing I.E. and Media Player are not really cross platform and MS has no intention to make its software work better on any other platform. Have you ever tried to use I.E. on the Mac? It is awful. No wonder Safari was developed. Sure the mac platform may only have ~5% of all users, maybe as high as 10% if you only count home users. Many Mac users have selected Apple for its ease of use software and this is just the type of user who would select AOL. With AOL desperately trying to keep its user base would AOL opt for software which potentially might alienante/turn away 5 to 10 percent of its users?

2. MS can not be trusted. Why would AOL become anymore dependent on MS software and technologies with the history the company has of not fully living up to past agreements it has made. Has MS really conceeded the online market to AOL. What are MS's plans for MSN? Could a year into the agreement couldn't MS make I.E. and MS Media Player work better with MSN than AOL. If MS does this the only option for AOL would be to take them to court. MS doesn't really care if they are sued. It is likely AOL would welcome another cash donation to drop another suit.

I believe AOL will not trust MS to screw them if AOL becomes too dependent on MS software. This is why I believe the next version of AOL will include Gecko. As to the question as to why Gecko has not been included in AOL software, other than for the Mac? I look at it this way. AOL had to make it look as though it was seriously testing Gecko for mass roolout completely replacing IE. Thus the Mac used Gecko. AOL would not have the same barganing power with MS in this suit if it had rolled out Gecko for Windows as well as the Mac; AOL had to continue to use I.E. Now that AOL has negotiated this deal, a deal where Microsoft is obligated to promote AOL software on its OS desktop, can AOL finally rid itself of most of its ties to MS and IE and roll out AOL software based on Gecko. Now MS will have to compete more or less fairly with AOL. No more tricks with their software, such as making IE work much beteer on MSN.

I hope I am right. In any case, AOL is sure to keep Gecko development moving forward just in case MS pulls a dirty trick on them . AOL will at the least keep Gecko updated and current in case they have to quickly switch over to Gecko for their browser engine. Who would trust MS to live up to an agreement given their history. AOL better keep Gecko/Firebird around and updated for insurance if they do not switch to Gecko and actually go for IE.