US Report: Microsoft to stage Windows 98 rally, warns Wall Street

Microsoft and some of its biggest customers and supporters will hold a joint press conference in New York today called Windows 98 Innovation Day.

The rally is designed to garner public support and pre-empt pending legal action that might block the shipment of the new operating system.

Sources said Microsoft Chairman and CEO Bill Gates, Compaq CEO Eckhard Pfeiffer, CompUSA's President and CEO Jim Halpin, and several other executives will take the stage at 2 p.m. in Manhattan.

The press conference comes on the heels of a letter-writing campaign, which culminated in a letter being sent last week to the U.S. Department of Justice and signed by 26 high-tech executives, who stated that the industry would be harmed if Windows 98 is delayed.

Last night, Microsoft fired off a letter to Wall Street warning that a delay of Windows 98 could have "broad, negative consequences not just for Microsoft but for the entire PC industry." The letter, authored by Microsoft Chief Financial Officer Greg Maffei, was sent to about 150 stock analysts, software companies and venture capitalists.

Maffei said in the letter that he wanted to outline the possible financial ramifications of such regulatory action.

PC companies, software resellers and ISVs would all be hurt by a delay, Maffei said, because so much effort and money has already been spent in anticipation of the release of the operating system.

The actions come as the attorneys general from a dozen states and the DOJ are planning to launch

their next legal assault against Microsoft. Sources close to the investigations say that a new legal action could take place as early as the beginning of this week and by May 15 at the latest.

Among the actions planned by the government agencies is a preliminary injunction that would block the shipment of Windows 98. That is likely to be part of a bigger antitrust case that is brought against Microsoft, sources said.

The states and the DOJ are racing against the clock to beat Microsoft's May 15 deadline for shipping Windows 98 to OEMs.

Microsoft late last week posted Release Candidate 3 for Windows 98, which testers say is close to, if not exactly the version of Windows 98 that will be sent to OEMs. RC3 is designated as Build 1900, and testers say Microsoft will release the code once it reaches Build 1998.

As of press time, Microsoft officials were unavailable for comment about both the press conference and the status of Windows 98.

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