<font color=BLUE>AOL, Microsoft talks break down
By The Associated Press
Special to CNET News.com
June 2, 2001, 10:00 a.m. PT
Talks over whether America Online will be included in Microsoft's upcoming Windows XP operating system broke down, a Microsoft spokesman confirmed Friday.
Negotiations, which had been ongoing since a contract between the two ended Jan. 1, were called off this week after the companies could not agree to new terms, spokesman Jim Cullinan said. Windows XP, the latest version of Microsoft's operating system, is scheduled to be in stores in October.
America Online spokesman Jim Whitney said AOL, a division of AOL Time Warner, had no comment.
Cullinan said Microsoft still would provide AOL with the technical information it needs to make the company's Internet software compatible with XP if users install it themselves. Microsoft provides this information for many independent software vendors (ISVs), makers of software that people often run with Windows.
“We're disappointed that talks broke down, but AOL remains a very important ISV and we are working very hard to ensure the AOL client will work great on top of Windows XP,” Cullinan said.
Under the terms of the expired contract, Microsoft had agreed to pre-install AOL Internet service into its Windows desktops in exchange for AOL agreeing to use Microsoft's Internet Explorer browser. This placement allowed AOL to draw users very quickly and gave Explorer prominence over rival Netscape, which was later bought by AOL.
A person close to negotiations, who spoke on condition of anonymity, said various options were discussed for a new deal.
The source said sticking points included making AOL's instant messaging program compatible with Microsoft's or tweaking AOL's system to support Microsoft's Windows Media Player format in addition to RealNetworks' RealPlayer format.
But another person close to the discussions said Microsoft and AOL never discussed instant messaging compatibility. He said Microsoft had asked for exclusive use of its Windows Media Player format with AOL, which AOL would not agree to.
Currently, AOL's software ships with and supports technology from RealNetworks, Microsoft's rival in the digital media field. Speculation that AOL would shift allegiances to Windows Media Player sent RealNetwork's stock plummeting earlier this month.
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