United States software giant Microsoft said on Friday it has sealed a $30-million deal with South Korean internet portal Daum Communications to settle an anti-trust suit and put the two firms in a new partnership.
The deal ends a legal battle with Daum, which had accused Microsoft of violating anti-trust rules by unfairly incorporating its MSN instant-messaging software into the Windows system.
The settlement includes a cash payment of $10-million, together with an advertising commitment valued at $10-million and another $10-million in business terms.
Microsoft and Daum said the deal will include putting ”select online content from Daum on MSN and other marketing and promotional opportunities”.
”This agreement marks not only the end of our legal dispute, but more importantly, the beginning of a closer working relationship between our companies,” Microsoft’s corporate vice-president Tom Burt said in a statement.
In return for dropping its suit, Daum, which has its own messaging service, decided to tie up with Microsoft.
”It is significant that we have reached this settlement with Microsoft on terms that we believe are favourable to Daum, and to be able to work together with Microsoft to build a new business partnership,” said Daum vice-CEO Kim Hyun-Young.
Daum shares rose by 9,9% to 34 500 won on expectations that the deal would improve the company’s financial structure.
Daum posted an operating loss of 1,5-billion won ($1,4-million) in the third quarter of this year after it acquired the US portal business of Spain’s Terra Lycos.
The Korean company hopes to expand its business abroad by using the brand of Lycos, the seventh-most-visited website in the US. But there have been concerns about a lack of profitable business models and the need for Daum’s financial backing to normalise operations at Lycos.
The deal came a month after Microsoft agreed to pay $761-million to RealNetworks, a US firm marketing the RealPlayer audio-visual software, in a deal that settled anti-trust suits in the US, South Korea and the European Union.
Microsoft has used billions of dollars to settle a string of disputes brought by major rivals, including IBM and Sun Microsystems.
In South Korea, the world’s largest software company was accused of abusing its market dominance and violating fair trade rules.
The European Commission has already ruled that the US company should sell its Windows system without its Media Player software to ensure fair competition with European rivals. — Sapa-AFP