Spyglass to take look at Microsoft's books

Internet browser firm Spyglass has demanded to audit Microsoft's books for possible licence money owing, after warning of a higher-than-anticipated first quarter loss.

Spyglass warned last Thursday that figures for Q1, ended 31 December, would reveal a loss of $1.2 million to $1.6 million. The company feels its financial health is not helped by uncertainty over whether MS owes it money for licensing its Mosaic browser and Surfwatch content filtering software to bundle with Internet Explorer.

The firm had previously indicated it might post a loss for the first half of the financial year after ramping up its research and development spending.

In a statement issued on Thursday, Spyglass said MS had only paid a guaranteed minimum of $400,000 in royalty payments. Spyglass believes it is owed more, but is unable to determine how much because it says MS has not issued a report on the number of copies of Explorer it has given away.

But the licensing agreement with MS includes a clause that gives Spyglass the right to audit the software giant's financial records to decide whether further royalties are due.

MS declined to comment; Spyglass said it would only comment further after the release of its Q1 results on 22 January.