Manu
06-18-2001, 11:43 AM
Microsoft, AOL Scrap Talks Over Windows XP
SEATTLE (Reuters) - Talks between Microsoft Corp. <MSFT.O> and AOL-Time Warner Inc. <AOL.N> to ship the AOL Internet service with the next version of the Windows operating system failed on Saturday, sunk by wrangling over legal issues, instant messaging and digital media.
The software giant and the Internet and media behemoth have been in talks for weeks over bundling the AOL Internet access service in Microsoft's upcoming operating system, called Windows XP.
But senior executives from both companies who spoke by telephone on Saturday morning were unable to reach an agreement, Microsoft spokesman Vivek Varma said.
"Earlier today, discussions between AOL and Microsoft ended without agreement on a broad range of issues," Varma said.
Although dialogue between the companies has broken down and restarted several times, Varma said Microsoft now felt discussions were not likely to resume.
"While unable to conclude a broader deal, Microsoft will continue our work to ensure the AOL service runs well on Windows XP," Varma said.
"We're disappointed that we couldn't conclude a broad deal, but we're open to partnership opportunities going forward and hope to have discussions with AOL-Time Warner in the future," Varma said.
AOL could not immediately be reached for comment.
MESSAGING AND MEDIA
Microsoft has distributed AOL's software with Windows for years, an arrangement that helped make AOL by far the largest Internet access service, with more than 29 million customers.
But that previous distribution deal ended in January, and talks to strike a new one assumed new urgency in the past weeks as Microsoft nears its deadline for completing work on Windows XP, which it has promised to customers in October.
In exchange for including AOL on Windows XP, Microsoft had pressed the company to make its instant messenger (IM) product -- software that lets users type messages to each other in real time -- operable with its own IM service, said a source familiar with the situation.
Microsoft also wanted AOL to support its digital audio and video technology. AOL now only supports technology from RealNetworks Inc. <RNWK.O>, Microsoft's main competitor in digital media.
"There wasn't any single issue that killed the discussions, there were a number of issues that both sides just couldn't come to closure on," the source said.
Microsoft had also asked AOL to enter into a "mutual legal release" under which legal claims by the companies against each other would be dropped, and they would agree to avoid legal action in the future, the source said.
"Any claims we have and any claims they have, let's put those aside because we're going to have a good positive relationship going forward. If we're going to put them in Windows XP, they shouldn't sue us over Windows," the source said.
The source added that Microsoft had agreed that claims by Netscape, the browser software company bought by AOL that was the source of the U.S. government's antitrust case against Microsoft, would not be covered in a legal release deal.
www.abcnews.com (http://www.abcnews.com)
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Manu Narayan
SEATTLE (Reuters) - Talks between Microsoft Corp. <MSFT.O> and AOL-Time Warner Inc. <AOL.N> to ship the AOL Internet service with the next version of the Windows operating system failed on Saturday, sunk by wrangling over legal issues, instant messaging and digital media.
The software giant and the Internet and media behemoth have been in talks for weeks over bundling the AOL Internet access service in Microsoft's upcoming operating system, called Windows XP.
But senior executives from both companies who spoke by telephone on Saturday morning were unable to reach an agreement, Microsoft spokesman Vivek Varma said.
"Earlier today, discussions between AOL and Microsoft ended without agreement on a broad range of issues," Varma said.
Although dialogue between the companies has broken down and restarted several times, Varma said Microsoft now felt discussions were not likely to resume.
"While unable to conclude a broader deal, Microsoft will continue our work to ensure the AOL service runs well on Windows XP," Varma said.
"We're disappointed that we couldn't conclude a broad deal, but we're open to partnership opportunities going forward and hope to have discussions with AOL-Time Warner in the future," Varma said.
AOL could not immediately be reached for comment.
MESSAGING AND MEDIA
Microsoft has distributed AOL's software with Windows for years, an arrangement that helped make AOL by far the largest Internet access service, with more than 29 million customers.
But that previous distribution deal ended in January, and talks to strike a new one assumed new urgency in the past weeks as Microsoft nears its deadline for completing work on Windows XP, which it has promised to customers in October.
In exchange for including AOL on Windows XP, Microsoft had pressed the company to make its instant messenger (IM) product -- software that lets users type messages to each other in real time -- operable with its own IM service, said a source familiar with the situation.
Microsoft also wanted AOL to support its digital audio and video technology. AOL now only supports technology from RealNetworks Inc. <RNWK.O>, Microsoft's main competitor in digital media.
"There wasn't any single issue that killed the discussions, there were a number of issues that both sides just couldn't come to closure on," the source said.
Microsoft had also asked AOL to enter into a "mutual legal release" under which legal claims by the companies against each other would be dropped, and they would agree to avoid legal action in the future, the source said.
"Any claims we have and any claims they have, let's put those aside because we're going to have a good positive relationship going forward. If we're going to put them in Windows XP, they shouldn't sue us over Windows," the source said.
The source added that Microsoft had agreed that claims by Netscape, the browser software company bought by AOL that was the source of the U.S. government's antitrust case against Microsoft, would not be covered in a legal release deal.
www.abcnews.com (http://www.abcnews.com)
------------------
Manu Narayan