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Windows 98 to ship on schedule

Microsoft plans to ship Windows 98 on schedule, giving PC makers the option of removing Internet Explorer browser from the new operating system.

Microsoft (MSFT) plans to ship Windows 98 on schedule next year, giving PC manufacturers the option of removing its Internet Explorer browser from the new operating system.

The move is designed to address government charges that Microsoft is unfairly leveraging its Windows dominance See special report: MS-DOJ case in court by requiring computer makers to license the browser with the ubiquitous operating system. U.S District Court Judge Thomas Penfield Jackson issued a temporary order yesterday forbidding the software giant from tying Windows licenses to Internet Explorer.

"It appears that, if the judge's ruling is still in effect at that time [when Windows 98 is ready to ship], the ruling may also require Microsoft to allow [original equipment manufacturers] the option of shipping a version of Windows 98 without all the IE 3.0 and 4.0 files," company spokesman Mark Murray said in an interview today. He said Microsoft still intends to ship Windows 98 during the April-June quarter as planned.

Microsoft will provide the technological means for the separation, Murray said, but it would be up to the PC makers--known in the industry as OEMs, or original equipment manufacturers--to take the browser out of the operating system. With word that Windows 98 will include instructions so that third parties can uninstall IE, the company has moved swiftly to quell a potential stock plunge because the release of the desktop upgrade will have a profound effect on revenues.

"We would give OEMs all the files that they would have to strip out," he said. "It's not that difficult or time-consuming, but [Windows 98] won't function the same way, as the fully integrated product."

But Eric Brown, an analyst with Forrester Research, disagreed that the task of separating the browser from the operating system is a simple matter. "It would be very difficult to rip anything out of Windows 98," he noted.

Besides, Brown said, there is little incentive for PC manufacturers to reverse the software integration even if it were easy to do. Without the explicit integration of IE into Windows 98, he noted, there will be little reason for users to upgrade from their current Windows 95-based desktops.

In the meantime, the court order has not stopped Microsoft from releasing another test version of Windows 98--called a "pre-beta three"--to a select group of software reviewers this week.

Windows 98, the long-anticipated upgrade, includes tight Web browser integration that essentially allows users to surf around their desktop hard drive as they would the Net. Without the integration, the latest beta version essentially cleans up a lot of the rough spots found in the second beta of the operating system, according to Microsoft.

Windows 98 will also include features allowing users to watch television shows on their PC. The TV viewer will come with an HTML-based program guide as well as space for advertisers. Broadcasters who use the feature will also be able to take advantage of separate frames to display supplemental information related to the program being viewed.

Analysts had previously expressed serious doubts about Microsoft's ability to deliver upgrades on time amid the legal turmoil. The Justice Department charges that Microsoft violated a 1995 consent decree by requiring that PC makers bundle Explorer with Windows 95, giving the company an unfair market advantage.

Further muddying the waters are efforts by Microsoft to tie its browser to installation of its growing server-based software family, as reported last week by CNET's NEWS.COM.

Microsoft requires Windows NT 4.0 users who wish to add a recently shipped Option Pack to also install IE 4.01. The company reasons that certain DLLs (dynamic link libraries) must be installed via IE 4.01, so therefore a download of the browser is required. As of today, Microsoft had not changed the IE requirement for installation of the Option Pack.

Microsoft could possibly be planning to make the same argument for Windows 98 and may be laying the groundwork for similar tie-ins so that it can make the case that--in a real sense--the operating system and IE are tightly integrated.