[OT] Microsoft behind $12 million payment to Opera

http://news.com.com/Microsoft+behind+%2412+million+payment+to+Opera/2100-103
2_3-5218163.html?tag=nefd.lede

Microsoft behind $12 million payment to Opera

Last modified: May 24, 2004, 4:00 AM PDT
By Evan  <mailto:evanh@cnet.com?subject=FEEDBACK:Microsoft behind $12
million payment to Opera> Hansen and Paul
<mailto:paulf@cnet.com?subject=FEEDBACK:Microsoft behind $12 million payment
to Opera> Festa 
Staff Writer, CNET News.com

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<http://news.com.com/Microsoft+behind+%2412+million+payment+to+Opera/2100-10
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Microsoft agreed to pay Norway's Opera Software $12.75 million to head off a
threatened lawsuit over code that made some Web pages on MSN look bad in
certain versions of Opera's Web browser, CNET News.com has learned. 

Opera disclosed the payment last week in a terse press release that omitted
other details, including the name of the settling party and the nature of
the dispute. 

But a source indicated that the payment came from Microsoft in order to
close the books on a clash over obscure interoperability problems. On at
least three separate occasions, Opera has accused Microsoft of deliberately
<http://news.com.com/Opera+wails+about+MSN+problem/2100-1032_3-1008869.html?
tag=nl> breaking interoperability between its MSN Web portal and various
versions of the Opera browser--charges that the software giant has
repeatedly denied. 

A Microsoft representative said the company does not comment on rumors. 

Reached by phone, Opera executives refused to name the company involved in
the settlement or describe the nature of the legal claims, citing a
confidentiality agreement. 

"We forwarded a few facts to a big international corporation and settled
before we took legal action," Opera Chief Technology Officer Hakon
<http://dw.com.com/redir?destUrl=http%3A%2F%2Fwww.w3.org%2FPeople%2Fhowcome&
siteId=3&oId=2100-1032-5218163&ontId=1023&lop=nl_ex> Lie said Tuesday. "This
resolves an issue very close to my heart." 

The deal marks the latest in a string of settlements from Microsoft, which
is seeking to simplify its business by clearing up potentially damaging
legal claims. In the past year, the company has agreed to pay billions of
dollars to wrap up litigation
<http://news.com.com/Sun+settles+with+Microsoft%2C+announces+layoffs/2100-10
14_3-5183848.html?tag=nl> with Sun Microsystems, digital
<http://news.com.com/Microsoft%2C+InterTrust+iron+out+lawsuit/2100-1014_3-51
89980.html?tag=nl> rights management developer InterTrust and Time
<http://news.com.com/Microsoft+to+pay+AOL+%24750+million/2100-1032_3-1011296
.html?tag=nl> Warner's Netscape Communications division, among others. 

While the Opera payment is relatively tiny, it underscores ongoing ripple
effects in the browser market that stem from the overwhelming dominance of
Microsoft's Internet Explorer. Having used its desktop operating system
monopoly to help trounce its primary rival Netscape, Microsoft has
effectively
<http://news.com.com/Developers+gripe+about+IE+standards+inaction/2100-1032_
3-5088642.html?tag=nl> abandoned significant browser development efforts.
That's left companies with negligible market share such as Opera and
Netscape's Mozilla open-source project to lead innovation in the field. 

For example, IE 6, the latest version of Microsoft's Web browser, released
in August 2001, does not yet offer a tool that automatically blocks Web
pop-up advertising. Microsoft has promised pop-up blocking as part of a
Windows XP upgrade due out later this summer known as SP2. That puts it well
behind Opera and others that have offered pop-up blocking for months in
response to overwhelming consumer demand. 

Last year, a member of Microsoft's IE team indicated that the company
planned to drop
<http://news.com.com/Microsoft+to+abandon+standalone+IE/2100-1032_3-1011859.
html?tag=nl> independent development of the browser altogether, opting
instead to fold its functions into the next major overhaul of its Windows
operating system, a project code-named Longhorn. 

Since then, however, Microsoft has remained largely silent about its
long-range browser development plans. 

"I'm not sure what their plan is, whether they'll do some upgrades with SP2,
wait for Longhorn or break out a separate release," Directions on Microsoft
analyst Matt
<http://dw.com.com/redir?destUrl=http%3A%2F%2Fwww.directionsonmicrosoft.com%
2Fpress%2Fmattrosoffbio.html&siteId=3&oId=2100-1032-5218163&ontId=1023&lop=n
l_ex> Rosoff said. "Whatever they do, IE is not a major strategic technology
for Microsoft anymore...They don't have a huge team working on IE, and there
hasn't been a lot of evolution in IE for a couple years." 

Web authors bow to IE
IE's dominance has also created fallout for Web standards, because Microsoft
delivers the Web to roughly nine out of every 10 people who use it. 

Although IE 6 provides good
<http://news.com.com/Standards+advocates+move+into+hibernation/2100-1023_3-2
77029.html?tag=nl> standards support, some Web site developers have decided
that it's easier to create sites that work
<http://news.com.com/Sites+bow+to+Microsoft%27s+browser+king/2100-1023_3-941
926.html?tag=nl> best with versions of IE, rather than use code that works
equally well on all standards-compliant browsers. For example, Shutterfly,
the online photo store backed by Netscape co-founder Jim Clark, does not
support any version of Opera or Mozilla browsers, according to a warning
<http://dw.com.com/redir?destUrl=http%3A%2F%2Fwww.shutterfly.com%2Ferror%2Fb
rowser.jsp%3Ffrom%3D%252Faccount%252Finit.jsp&siteId=3&oId=2100-1032-5218163
&ontId=1023&lop=nl_ex>  displayed on the site this week. 

The problem has been a top issue for Web standards advocates for some time,
shifting the focus of standards compliance away from browser makers and
toward companies
<http://news.com.com/Standards+group+ignites+common-code+war/2100-1023_3-269
804.html?tag=nl> behind popular Web authoring tools, such as Macromedia and
Adobe Systems. 

Opera's past complaints with Microsoft included charges that the software
giant deliberately sought to undermine the experience of Web surfers using
its browser by delivering a different set of instructions to Opera than
those sent to IE for rendering Web pages on MSN. The results included
misaligned margins and indentations that cut off some words, among other
things. 

Microsoft in 2003 admitted that it had taken steps to detect different types
of browsers accessing MSN and sent different Web page layouts to different
products. But the company said its efforts were aimed at promoting standards
compliance rather than at hurting products that compete with its dominant
Internet Explorer browser. Microsoft said it has since stopped the practice.


"MSN is committed to providing the best experience we can to all of its
consumers, and there is no intent to degrade the consumer experience for any
visitors to MSN," a Microsoft representative wrote in an e-mail. "When this
issue hit last year, MSN tested Opera's latest browser, determined and made
adjustments to ensure all Opera 7 users had a quality experience while
visiting MSN." 

Opera, by contrast, has long contended that Microsoft's alleged maneuvers
were intentional and hurt its reputation. 

MSN's browser lockouts at the time provided incendiary ammunition for
Microsoft critics, including anti-Microsoft industry group ProComp
<http://dw.com.com/redir?destUrl=http%3A%2F%2Fwww.procompetition.org&siteId=
3&oId=2100-1032-5218163&ontId=1023&lop=nl_ex> , which in 2001 accused
Microsoft of unfairly exploiting its massive lead in the browser market to
muscle out smaller competitors. 

"Who else could it be but Microsoft?" ProComp President Mike Pettit said
this week, referring to the payment. 

Pettit cast a jaundiced eye at the transaction, along with other settlements
Microsoft has made with rivals that have alleged wrongdoing. 

"If you really analyze the harm that is inflicted and measure the damages
paid, it's a very small dollar amount to Microsoft," Pettit said. "It's just
the cost of doing business to them, so they're just going to keep doing it
over and over. They pay 5 or 10 cents on the dollar in damages way after the
fact, and the net effect of it is to further unbalance the playing field. In
the final analysis, they got away with it." 

These days, Opera is looking to move past the PC to distribute its Web
browser on devices such as cell phones and personal digital assistants. As a
result, Opera will in the future face less of a threat from Microsoft, Opera
director John Patrick said. 

"People wonder why anyone would get into the browser business," he said.
"But this isn't about Microsoft and the PC. It's about every other kind of
device, from set-top boxes to cell phones. IE doesn't dominate that. It's a
different market...The opportunities are enormous."