Microsoft chief executive Steve Ballmer vowed to fight the European Commission's antitrust ruling, arguing that all companies, even ones with a near monopoly, have a right to improve their products.
Microsoft's last-ditch talks aimed at reaching a settlement with the European Union and avoiding antitrust action have failed, paving the way for a landmark legal ruling next week.
Microsoft said on Wednesday it is releasing an updated test version of Windows Vista, the forthcoming update to Microsoft's flagship operating system.
Although it is still working to finish the code for Windows Vista, Microsoft has reached a decision on which versions of the operating system to offer.
With the regulatory reins somewhat loosened, Microsoft is moving ahead with plans to more tightly integrate the development of Windows, Office and its other programs.
As Microsoft focuses on merging its Web browser and operating system software, open-source competitors are mulling a proposal to join forces and beat the software giant to the punch.
Microsoft has backed away from many of the more grandiose uses once envisioned for Passport, its online identification system.
With the introduction of Service Pack 2 for Windows XP, sites and software that depend on ActiveX may falter under Microsoft's new security regime.
Microsoft is moving ahead with plans to more tightly integrate the development of Windows, Office and its other programs--and much of these efforts are tied to Longhorn.
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