Microsoft Backs Down

WASHINGTON: Eyeball to eyeball with the Justice Department, Microsoft blinked. Just hours before Janet Reno was set to announce a new federal and state antitrust suit against the software firm, Microsoft attorneys arrived bearing what one state lawyer called "major concessions." The upshot: Redmond will not ship Windows 98 to computer makers until Monday. A source close to the negotiations told TIME Daily there "will be a cooling off period" and that "there will be no action" Thursday. "All this means," the source said, "is that the discussion continues."

The CD-ROMs bearing the all-important "gold code" for Win 98 were due to be delivered to the likes of Dell, Compaq and Hewlett-Packard this Friday. Microsoft spokesman Mark Murray said the fact it had been delayed "will not have any impact on the commercial launch date" for the top operating system upgrade, still set for June 25. What Reno et al would like before then is an agreement to let manufacturers remove the Internet Explorer icon, among others, from the Win 98 desktop. She shouldn't hold her breath. Given Microsoft's penchant for brinksmanship, that could take some time.