Microsoft has offered the hand of peace to the European Commission over controversial co-marketing pacts with Internet service providers (ISPs).
But the giant shook a defiant fist at the US Department of Justice with the announcement that its OEMs will continue to ship Windows 95 with the Internet Explorer (IE) browser intact.
In a further development in the battle of the browsers, Microsoft has agreed to alter co-promotional contracts with 30 European and 15 US ISPs. The changes will allow ISPs, which have deals with Microsoft, to advertise and promote other browsers such as Netscape Navigator.
Leading UK ISP Demon Internet admits it has a co-promotional deal with Microsoft and has been put under pressure to promote Internet Explorer. ?Sales and marketing people put all sorts of pressure on you, but it?s a healthy pressure,? said James Gardiner, head of corporate communications at Demon.
Before the new concessions, the contracts required Microsoft to publicise the ISPs through a menu on Windows 95 and the ISPs reciprocated by promoting IE to their customers as the browser of choice.
Gardiner claimed that there was nothing in Demon Internet?s contract with Microsoft to prevent it promoting other browsers. ?We could offer both IE and Navigator but we feel it would be too confusing for our start-up customers,? he said.
But Gardiner hinted that Demon's market leading position may have given the company greater leverage in its dealings with the software giant.
Netscape?s product marketing manager, Dusan Rnic, admitted that the co-marketing pacts may have affected Netscape's market share. ?If Microsoft did put constraints on ISPs it would have had revenue implications for us,? he said. But added his company was pleased by the decision. ?Anything that gives customers choice must be good,? he added.
But Rnic refused to comment when questioned on the implications of Microsoft?s announcement that its OEMs would continue to use Windows 95 with IE intact.
James Griffiths - senior product manager for desktops at leading OEM Compaq - reinforced Microsoft?s message and said his company will continue to offer Windows 95 with Internet Explorer displayed. ?We have no plans to alter our current product line,? he said.
Griffiths claimed that altering the operating system would cause too much disruption. ?A lot of our products go to corporate clients, who require stability. chopping and changing Windows would not go down well.?
When questioned about new clients who were not ?set in their ways? over Windows 95, Griffiths admitted that any alterations in operating system could lead to disruption of support services. ?Any changes could cause problems to our reseller channel,? he said.
Other OEMs, including Packard Bell NEC, also admitted they had no plans to change in light of the DoJ decision.
As part of a lawsuit against Microsoft, the DoJ is investigating whether the software giant is using its operating system dominance to force OEMs to bundle Internet Explorer with Windows 95. The company settled out of court last month and agreed to offer two optional versions of Windows 95 with IE hidden from the desktop.
The European Commission announced last autumn that it was investigating several Microsoft business practices including its European Internet service provider contracts as part of a regular business review.
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