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WinInfo Daily UPDATE, April 11, 2005

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In the News

- You're Out! MSN and MLB Split
- Microsoft, Gateway Resolve Legal Dispute

==== In the News ====

by Paul Thurrott, [email protected]

You're Out! MSN and MLB Split

Major League Baseball (MLB) and MSN parted ways this weekend, killing a multimillion-dollar contract. MSN isn't the first online service to find its MLB relationship falling short. RealNetworks dissolved a similar relationship with the sports league in 2003 after the deal fell short of expectations.
According to a report in "The Seattle Times," MSN believed that it wasn't getting its money's worth out of the MLB contract. "We decided we would all be better served to just part friends," a Microsoft spokesperson said, noting that the decision came after a "gut check." Neither side was happy with the way things were going, the spokesperson said.
Microsoft signed its high-profile MLB deal, which gave MSN Premium subscribers online video broadcasts of baseball games, in March 2004. MSN also showed free baseball clips on and had plans to distribute games and clips to Portable Media Center owners. MSN and MLB decided to go their separate ways in February 2005, however.
The split is embarrassing for MLB because its previous online relationship with RealNetworks also soured. RealNetworks saved $5 million by abandoning its deal with MLB and stated that less than 2 percent of its 2003 revenues were derived from the MLB agreement.

Microsoft, Gateway Resolve Legal Dispute

Microsoft and PC maker Gateway have resolved their legal dispute and will now work together to promote Gateway's personal computing products, the companies announced today. To resolve the dispute, which arose out of the US antitrust case against the software giant, Microsoft will pay Gateway $150 million over 4 years. And Gateway will halt all its antitrust-related legal claims against Microsoft.
"Our relationships with PC manufacturers are integral to our success, and we look forward to working even more closely with Gateway to communicate the benefits of its products and our software to consumers," Rodrigo Costa, Microsoft's OEM corporate vice president, said. "We are very pleased to be able to resolve our past differences in a constructive manner that will allow us to continue our focus on the interests of our mutual customers."
According to the companies, the money Microsoft pays to Gateway will fund marketing initiatives such as advertising, sales training, and consulting, as well as fund the development and testing of Microsoft's next-generation OSs and productivity software. Judge Thomas Penfield Jackson, you might recall, found that Microsoft's business practices specifically harmed Gateway during the 1990s. As part of the agreement, Microsoft continues to deny any liability to Gateway or its business.
My lingering bitterness over the US antitrust ruling notwithstanding, it's nice to see Microsoft standing by the companies that distribute its software, especially one as battle-damaged as Gateway. Here's a little bit of positive news in all this: Gateway's case against Microsoft would have expired in March 2003 under statute-of-limitations guidelines. Microsoft agreed to extend that time period, however, so that the two companies could reach a mutually beneficial agreement.

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