AOL, Microsoft Talks on Software Resume
AOL Time Warner Inc. and Microsoft Corp. were back at the bargaining table Sunday over whether AOL’s software will be included in the soon-to-be released Windows XP operating system. Talks had broken down late last week.
“We’re back at the table, we’re happy to be back at the table and hope to reach a mutually beneficial conclusion,” said Microsoft spokesman Jim Cullinan.
A five-year deal that gave AOL coveted placement on the Windows desktop and made Microsoft’s Internet Explorer the default browser on America Online’s flagship service expired Jan. 1. Windows XP is scheduled for an Oct. 25 launch.
The talks to renew the deal were called off when the companies, both vying to become the dominant force on the Internet, could not agree to terms.
Although the talks had resumed, a source close to the negotiations said the companies are still “far apart” on key issues, “from technical questions to the overall relationship.”
“When you consider over the past few years, the efforts by AOL and competitors to bring legal action against Microsoft, that isn’t really a good atmosphere for a positive relation ship,” the source said.
One potential sticking point is whether AOL’s software will support Microsoft’s Windows Media Player in addition to RealNetworks Inc.’s RealPlayer format. RealNetwork’s stock plunged May 29 on concerns AOL would sign an exclusive deal supporting Windows Media Player.
But a source close to AOL said, “There is no validity to the notion that the RealPlayer would be disadvantaged by anything in the discussions.”
Placement “on Windows is no longer a meaningful mechanism for advancing AOL’s subscription growth,” the source added. “From our perspective, these discussions are not a big deal. If they move forward, that’s terrific, but if they ultimately don’t, that’s fine too.”
Microsoft and AOL have also sparred over instant messaging, with Microsoft asking AOL to make its service--by far the world’s largest--open to compatibility with other instant-messaging services. But the source close to AOL said the companies have agreed to delay discussing the matter until a “later round of discussion.”
