Saturday, August 11, 2001

Microsoft, AOL duel for control

By Allison Linn
The Associated Press

        SEATTLE — For software giant Microsoft Corp. and media conglomerate AOL Time Warner, the years of detente are over.

        Now, both are concentrating on the same corporate goal — making money from paid Internet services.

        “This is kind of a fight to the death between the two of them,” analyst Rob Enderle said.

        Microsoft has long nagged AOL with repeated calls for the online company to make its dominant instant messaging system compatible with Microsoft's.

        More recently, it has taken jabs at AOL's customer base with an ad campaign aimed at getting Internet customers to switch — and get three months' free service. But the heart of the battlefield is the desktop computer.

        With the new operating system Windows XP, Microsoft plans to add many of the Internet-ready features that prepare the way for paid Internet services dubbed .NET.

        AOL has been lobbying lawmakers with complaints about Windows XP, maintaining that the new system unfairly favors Microsoft products. The media giant is asking for the system to be modified.

        AOL also is offering computer makers monetary incentives for placing its products on the computer desktop — and removing Microsoft's.

        Calling that anti-competitive, Microsoft said it would force computer makers who feature AOL's products on computer desktops to also include an icon that leads users to Microsoft's MSN service.

        This week, Microsoft upped the ante.

        It insisted that desktops that feature competitors' icons also must feature links to Windows Media Player, which competes with AOL and RealNetwork products, as well as links to either the company's Internet Explorer browser or its Movie Maker.


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