September 6, 2003 9:35 AM PDT

Microsoft settles Be suit for $23 million

Microsoft announced late Friday that it would pay more than $23 million to settle an antitrust suit filed by onetime operating system rival Be.

Microsoft did not admit wrongdoing in the settlement, in which Be will receive $23.2 million after attorneys' fees. The total amount Microsoft will pay was not immediately clear from a joint statement by the two companies.

"Both parties are satisfied with the agreement and believe that it is fair and reasonable," the companies said in a statement. In the suit, Be had charged that Microsoft's anticompetitive efforts led to the company's destruction, with the software maker's efforts having thwarted deals that would have put the company's OS onto major name brand PCs.

The move all but closes the book on Be, which has said it would shutter itself and return all its remaining assets to shareholders. The company's technology and much of its staff went to handheld maker Palm two years ago in exchange for $11 million in Palm stock.

As part of the Palm deal, Be retained the rights to file suit against Microsoft, which it eventually did in February 2002.

For Microsoft, the deal brings an end to another of the antitrust lawsuits hanging over the company. Earlier this year, Microsoft reached a deal with AOL Time Warner in which the software maker will pay $750 million to settle a suit brought by its Netscape Communications unit.

Executives have said the company is looking to settle legal actions where it can. The company still faces a number of actions, including a pending antitrust action by the European Union, a suit by Sun Microsystems and consumer class-action suits in several states.

Menlo Park, Calif.-based Be, founded by former Apple Computer executive Jean-Louis Gassee, developed an operating system that won acclaim from a small base of hobbyists but failed to achieve commercial success. Among Be's short list of successes in recent years was being included in the development of the short-lived eVilla Internet device from Sony.

The company was never profitable. Before its initial public offering in 1999, Be had accumulated debt totaling $54.6 million. In 1998, revenue came to $1.2 million, but net losses reached $16.9 million. In 1999, revenue more than doubled to $2.7 million, but losses grew to $24.5 million. In 2000, Be reported $480,000 in revenue and $22.3 million in losses, with the company stopping operations after the Palm deal in 2001.

Gassee stepped down from his role as chief executive of Be in January 2002.

 

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