Microsoft was this week facing the real prospect of a delay in the release of Windows 98, following the failure of a personal appeal to the Department of Justice (DoJ) by the software giant's CEO, Bill Gates, and despite consolidated support from industry partners.
Last week, Gates held two hours of crisis talks with Joel Klein, assistant attorney general for antitrust at the DoJ. Klein was responsible for the initial suit which forced Microsoft to offer systems builders the option of not bundling Internet Explorer with Windows 95.
Gates claimed an attempt to block the 25 June release of Windows 98 'would be like telling General Motors it can't come out with any new cars this fall'.
But Klein said Microsoft had left it too late to overturn the temporary injunction before the release of the O/S next month.
He was also not persuaded by a letter from the executives of 26 leading computer companies, including Compaq, Dell and Hewlett Packard, which claimed that a delay could cause considerable harm to the computer industry in particular, and the economy in general.
The problem for Microsoft is that in the latest version of its operating system the browser is a fully integrated feature.
The existing debundling order would effectively demand that the entire product be redesigned even if the expected broader lawsuit against Microsoft does not go ahead.
But it appeared likely that Klein will file a broader suit under the 1935 Sherman Act, before 15 May - the same day as Windows 98 is due to be shipped to OEM partners. The suit may ask for Netscape's browser to be included in Win 98.
The DoJ investigations are now concentrating on Microsoft's OEM licensing contract, which prevents systems builders from customising the features on the Windows desktop.
Increasing speculation about the release delay was reflected in Microsoft's stock performance. Microsoft's share price fell by three cents to $83.37 at the end of last week. Last month the stock was trading as high as $99.12.
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