May 24, 2004 4:00 AM PDT

Microsoft behind $12 million payment to Opera

Microsoft agreed to pay Norway's Opera Software $12.75 million to head off a threatened lawsuit over code that made some Web pages on MSN look bad in certain versions of Opera's Web browser, CNET has learned.

Opera disclosed the payment last week in a terse press release that omitted other details, including the name of the settling party and the nature of the dispute.

But a source indicated that the payment came from Microsoft in order to close the books on a clash over obscure interoperability problems. On at least three separate occasions, Opera has accused Microsoft of deliberately breaking interoperability between its MSN Web portal and various versions of the Opera browser--charges that the software giant has repeatedly denied.


What's new:
Microsoft agreed to pay $12.75 million to Opera Software to close the books on a clash over interoperability problems affecting Opera's browser.

Bottom line:
The deal marks the latest in a string of settlements from Microsoft, which is seeking to simplify its business by clearing up potentially damaging legal claims.

More stories on this topic

A Microsoft representative said the company does not comment on rumors.

Reached by phone, Opera executives refused to name the company involved in the settlement or describe the nature of the legal claims, citing a confidentiality agreement.

"We forwarded a few facts to a big international corporation and settled before we took legal action," Opera Chief Technology Officer Hakon Lie said Tuesday. "This resolves an issue very close to my heart."

The deal marks the latest in a string of settlements from Microsoft, which is seeking to simplify its business by clearing up potentially damaging legal claims. In the past year, the company has agreed to pay billions of dollars to wrap up litigation with Sun Microsystems, digital rights management developer InterTrust and Time Warner's Netscape Communications division, among others.

While the Opera payment is relatively tiny, it underscores ongoing ripple effects in the browser market that stem from the overwhelming dominance of Microsoft's Internet Explorer. Having used its desktop operating system monopoly to help trounce its primary rival Netscape, Microsoft has effectively abandoned significant browser development efforts. That's left companies with negligible market share such as Opera and Netscape's Mozilla open-source project to lead innovation in the field.

For example, IE 6, the latest version of Microsoft's Web browser, released in August 2001, does not yet offer a tool that automatically blocks Web pop-up advertising. Microsoft has promised pop-up blocking as part of a Windows XP upgrade due out later this summer known as SP2. That puts it well behind Opera and others that have offered pop-up blocking for months in response to overwhelming consumer demand.

Last year, a member of Microsoft's IE team indicated that the company planned to drop independent development of the browser altogether, opting instead to fold its functions into the next major overhaul of its Windows operating system, a project code-named Longhorn.

Since then, however, Microsoft has remained largely silent about its long-range browser development plans.

"I'm not sure what their plan is, whether they'll do some upgrades with SP2, wait for Longhorn or break out a separate release," Directions on Microsoft analyst Matt Rosoff said. "Whatever they do, IE is not a major strategic technology for Microsoft anymore...They don't have a huge team working on IE, and there hasn't been a lot of evolution in IE for a couple years."

Web authors bow to IE
IE's dominance has also created fallout for Web standards, because Microsoft delivers the Web to roughly nine out of every 10 people who use it.

Although IE 6 provides good standards support, some Web site developers have decided that it's easier to create sites that work best with versions of IE, rather than use code that works equally well on all standards-compliant browsers. For example, Shutterfly, the online photo store backed by Netscape co-founder Jim Clark, does not support any version of Opera or Mozilla browsers, according to a warning displayed on the site this week.

The problem has been a top issue for Web standards advocates for some time, shifting the focus of standards compliance away from browser makers and toward companies behind popular Web authoring tools, such as Macromedia and Adobe Systems.

Opera's past complaints with Microsoft included charges that the software giant deliberately sought to undermine the experience of Web surfers using its browser by delivering a different set of instructions to Opera than those sent to IE for rendering Web pages on MSN. The results included misaligned margins and indentations that cut off some words, among other things.

Microsoft in 2003 admitted that it had taken steps to detect different types of browsers accessing MSN and sent different Web page layouts to different products. But the company said its efforts were aimed at promoting standards compliance rather than at hurting products that compete with its dominant Internet Explorer browser. Microsoft said it has since stopped the practice.

"MSN is committed to providing the best experience we can to all of its consumers, and there is no intent to degrade the consumer experience for any visitors to MSN," a Microsoft representative wrote in an e-mail. "When this issue hit last year, MSN tested Opera's latest browser, determined and made adjustments to ensure all Opera 7 users had a quality experience while visiting MSN."

Opera, by contrast, has long contended that Microsoft's alleged maneuvers were intentional and hurt its reputation.

MSN's browser lockouts at the time provided incendiary ammunition for Microsoft critics, including anti-Microsoft industry group ProComp, which in 2001 accused Microsoft of unfairly exploiting its massive lead in the browser market to muscle out smaller competitors.

"Who else could it be but Microsoft?" ProComp President Mike Pettit said this week, referring to the payment.

Pettit cast a jaundiced eye at the transaction, along with other settlements Microsoft has made with rivals that have alleged wrongdoing.

"If you really analyze the harm that is inflicted and measure the damages paid, it's a very small dollar amount to Microsoft," Pettit said. "It's just the cost of doing business to them, so they're just going to keep doing it over and over. They pay 5 or 10 cents on the dollar in damages way after the fact, and the net effect of it is to further unbalance the playing field. In the final analysis, they got away with it."

These days, Opera is looking to move past the PC to distribute its Web browser on devices such as cell phones and personal digital assistants. As a result, Opera will in the future face less of a threat from Microsoft, Opera director John Patrick said.

"People wonder why anyone would get into the browser business," he said. "But this isn't about Microsoft and the PC. It's about every other kind of device, from set-top boxes to cell phones. IE doesn't dominate that. It's a different market...The opportunities are enormous."


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There is always a question of compatibility and Microsoft is always the target. If a smaller company created a product that was not compatible with other similar products and it became popular there would never be any questions asked. In fact they would be praised. Microsoft creates a standard and then people cry fowl. Sure they use their money to secure and grow their market share but why shouldn't they? They have worked hard for it and consumers have let it happen. Its not as if there arent other options, people just dont care to change. Oh yes I am not a Microsoft fan or devotee. I personally use and prefer a Mac.
Posted by (19 comments )
Reply Link Flag
MS Does NOT follow standards
MS does not create nor do they follow standards. Period. End of story. This isn't debatable. They simply don't. IE is quite possibly the world's worst implementation of the W3 standards. They are barely in compliance with Kerberos standards. (Do a google search and see.) and they are legendary with their embrace extend extinguish practices.
You say if this was any other company no one would care and you would be right because no other company is a monopoly (Not a bad word mind you.) and no other company owns 90% of the OS market. Look at the BS slime ball tactics MS has pulled in the past. Simply do a search and find the article from about 2 years ago where MS locked out anyone running anything Mozilla from why? At first it was claimed on the page displayed to Mozilla users that Mozilla did offer a good enough experience and to go upgrade to IE. MS held this stance for all of half a day and amazingly enough their page started working again. Funny isnt it. This is simply another slime ball BS tactic on the part of MS to ensure its dominance of the browser market. Why? Because the browser has the ability to allow cross platform compatibility with OSs, applications, etc. Tell me what would happen to MS if their OS was compatible across OSs? You can bet their market share would start slipping. This is just another means to control the market no matter what the tactic no matter how low they have to go. That company has show us just how low a company can go without hitting the legal boundaries of the US and even then it could be argued that they HAVE danced across those boundaries from time to time only to step back over again.
Thanks for your insight but MS can NOT be treated like another company No monopoly can. They play by a whole different set of rules that are exclusive to the monopoly club. And contrary to popular belief a monopoly isnt a swear. It isnt bad. But its what you do with that monopoly is what makes a company a good or bad thing and MS is about as far from being innocent as Nixon was. He wasnt impeached but there was sure a stink there. Ditto with MS.
Posted by Jonathan (832 comments )
Link Flag
re; Opera & MSIE
As a new user of Opera I found version 7.5 was released very quickly from beta and it shows. The toolbar customization features are quirky and don't stay put once you've changed things. The new RSS reader seems like a convenience rather than a real feature. It takes a lot of manual care and feeding. The tabbed browser is nice, but the window for viewing web pages is small unless you close toolbars or unless you have a 19 inch monitor. The mailer is OK, but again is not world class despite a database approach to message management.

Bottom line - enthusiam is not a substitute for technical excellence.
Posted by djysrv (15 comments )
Reply Link Flag
Why Opera
Why would Microsoft want to target Opera? It represents a very small portion of browsers used. Microsoft and Mozilla have a big advantage over Opera, both are completely free (no ads and no registration fee). With Opera one either has to put up with ad ware or pay $40.00. Opera is compliant with the some standards, but there are quite a few it isn't.
Posted by unknown unknown (1951 comments )
Reply Link Flag
pay $40.00
<a class="jive-link-external" href="" target="_newWindow"></a>
Posted by George Cole (314 comments )
Link Flag
I think the problem here is...
I think what the whole stink about this was was that Microsoft did this on purpose and targeted the Opera browser specifically. The fact that only certain of Microsoft's page causes this problem is a bit wonky in my opinion.

That said Opera is a very nice browser, their e-mail program kind of sucks in that it doesn't have enough features for advanced users. Even their address book doesn't have fields for company name, company contacts, etc.

Probably, the easiest thing for Opera to have done is to just make Opera work like IE. IE has won out and having any browser handle pages differently is just asking for problems. Sure you could make the browser smaller and faster and add other user features to make it better than IE, but the page rendering should have worked like IE.

Honestly, even if Microsoft broke their pages on purpose, I don't see where that is any ones business buy Microsoft. In the end that is bad publicity for Microsoft, the fact that they would do this, or not fix the problem and not really a problem for Opera. It is after all Microsoft's web site and if they don't want it to work with any other browser that is their business and their possible loss of business.

Posted by (336 comments )
Reply Link Flag
Simplistic solution
The primary reason that IE displays standards
compliant web pages differently or incorrectly
is because of bugs in the browser itself. Since
they maintain a monopoly postion on the desktop and browser market there is no motivation to fix these
problems. In fact, these "bugs" have become a
standard in of themselves because MS has no
motivation to fix them which forces other browser
makers to incorporate these "bugs" into their own
browsers to maintain IE compatability. What's wrong with this picture?
Posted by Johnny Mnemonic (374 comments )
Link Flag
Not All Is True...
Shutterfly works fine with Safari 1.2 and Opera 7.5. Apparently,
Shutterfly came to realize that MS and IE are problems, not
Posted by Earl Benser (4310 comments )
Reply Link Flag
Safari Too?
Periodically I get a server 1011 error when accessing
from Apple's safari. I wonder if Microsoft is doing the same
thing to Apple's Browser?
Posted by Jetsoftdev (3 comments )
Reply Link Flag
What is total in Billions for settlements '04
I'd like to see the total in Billions of dollars that this company
can pay to keep it out of court. How many other companies can
by off the competition in this manner?
Posted by technewsjunkie (1265 comments )
Reply Link Flag

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