Source: Deal 'not close'

"We are not close," the source said. "There is a lot of lifting to do."

Earlier, Microsoft (MSFT), the DOJ and state attorneys general announced they will meet again on Friday to continue settlement discussions.

	How good is Win98, anyway? Consumer beta testers weigh in.

While Microsoft said talks have been ongoing for more than week, the DOJ and the states Thursday agreed to hold back on their expected lawsuit while final negotiations are still progressing. At the same time, Microsoft has agreed to wait until Monday to ship Windows 98 to computer makers. The OS was due to ship on Friday.

The states and the DOJ had been expected to file a major lawsuit against Microsoft Thursday at noon ET.

Microsoft lawyers are currently on their way to Washington to meet with the DOJ and the attorneys general.

While events continue to unfold hour by hour, sources close to the case said that during the past week, Microsoft has offered to make concessions on many of its contracts, which were a focus of the suit. The sources said Microsoft has offered to change its contracts with Internet service providers, Internet content providers and OEMs.

Additionally, the Redmond, Wash., company has offered to change its contract requirements for how Internet Explorer is presented on the desktop as well as requirements that would allow Netscape Communications Corp.'s Navigator, for example, to be included on the desktop at boot-up.

Outcome still unknown
It is not known at this time whether a settlement will be reached or if a suit will progress. Sources said the areas in which Microsoft has made concessions were among the top items in the suit planned for today.

What Microsoft wants is control of what PC users see when they turn on the PC. As of this writing, antitrust officials are weighing a request that they not interfere with Microsoft's ability to control the "boot-up sequence," or the order in which different sounds, icons and graphics appear on the computer desktop.

Though Microsoft officials say they need the right to dictate such interface details in order to preserve the integrity of their product, critics say such restrictions give Microsoft impermissible power over what consumers see, use and buy over the Web.

By controlling the use of "bookmarks," desktop icons and channels such as those found on Microsoft's Internet software, the company could soon control the future of online commerce.

Though estimates vary, The Commerce Dept. recently estimated more than $300 billion in goods and services will likely be sold over the medium by the year 2002.

Accommodating MS 'a mistake'
John Chapman, an attorney at the Computer and Communications Industry Association, said news of a pending settlement augured ill for groups such as his. CCIA and others claim strong measures are necessary to keep Microsoft from illegally using its 95 percent share in PC operating systems to put rivals out of business.

"It's a mistake for the Justice Department and the states to try to accommodate Microsoft at the 11th hour and not fulfill their responsibility to file the case and extract a far more favorable settlement," he said. "The mistake they made two years ago was to take a quickie from Microsoft." WASHINGTON -- Microsoft Corp., the U.S. government and state governments are not close to agreement to avert possible antitrust action, a source close to the talks said on Thursday.

"We are not close," the source said. "There is a lot of lifting to do."

Earlier, Microsoft (MSFT), the DOJ and state attorneys general announced they will meet again on Friday to continue settlement discussions.

	How good is Win98, anyway? Consumer beta testers weigh in.

While Microsoft said talks have been ongoing for more than week, the DOJ and the states Thursday agreed to hold back on their expected lawsuit while final negotiations are still progressing. At the same time, Microsoft has agreed to wait until Monday to ship Windows 98 to computer makers. The OS was due to ship on Friday.

The states and the DOJ had been expected to file a major lawsuit against Microsoft Thursday at noon ET.

Microsoft lawyers are currently on their way to Washington to meet with the DOJ and the attorneys general.

While events continue to unfold hour by hour, sources close to the case said that during the past week, Microsoft has offered to make concessions on many of its contracts, which were a focus of the suit. The sources said Microsoft has offered to change its contracts with Internet service providers, Internet content providers and OEMs.

Additionally, the Redmond, Wash., company has offered to change its contract requirements for how Internet Explorer is presented on the desktop as well as requirements that would allow Netscape Communications Corp.'s Navigator, for example, to be included on the desktop at boot-up.

Outcome still unknown
It is not known at this time whether a settlement will be reached or if a suit will progress. Sources said the areas in which Microsoft has made concessions were among the top items in the suit planned for today.

What Microsoft wants is control of what PC users see when they turn on the PC. As of this writing, antitrust officials are weighing a request that they not interfere with Microsoft's ability to control the "boot-up sequence," or the order in which different sounds, icons and graphics appear on the computer desktop.

Though Microsoft officials say they need the right to dictate such interface details in order to preserve the integrity of their product, critics say such restrictions give Microsoft impermissible power over what consumers see, use and buy over the Web.

By controlling the use of "bookmarks," desktop icons and channels such as those found on Microsoft's Internet software, the company could soon control the future of online commerce.

Though estimates vary, The Commerce Dept. recently estimated more than $300 billion in goods and services will likely be sold over the medium by the year 2002.

Accommodating MS 'a mistake'
John Chapman, an attorney at the Computer and Communications Industry Association, said news of a pending settlement augured ill for groups such as his. CCIA and others claim strong measures are necessary to keep Microsoft from illegally using its 95 percent share in PC operating systems to put rivals out of business.

"It's a mistake for the Justice Department and the states to try to accommodate Microsoft at the 11th hour and not fulfill their responsibility to file the case and extract a far more favorable settlement," he said. "The mistake they made two years ago was to take a quickie from Microsoft."