In morning trading, Microsoft was up 4-5/8 at 163-5/8 in very heavy trading after the Seattle Times reported that the company and the government were exploring ways to settle the lawsuit before it resumes next month. The settlement talk was also fueled by Intel's tentative deal yesterday, settling antitrust charges brought by the Federal Trade Commission.
"Maybe Microsoft is rethinking its position, but I'm not really confident we'll get a settlement," said Jeffrey Maxick of Madison Securities. "Both sides appear relatively comfortable with how the trial is going. I don't see either side giving up an inch at this point."
According to the newspaper report, a source close to the case estimated "a 60 percent chance of a settlement." But the newspaper also said a person close to Microsoft played down that projection because the two sides had widely differing assessments of the trial.
"It makes sense to explore settlement discussions," the newspaper quoted one source as saying.
Brad Smith, Microsoft general counsel, said he would not comment on whether any settlement negotiations were under way in the dispute between his company and the Justice Department (DOJ). He would say only that, "obviously, there were discussions before the antitrust case was filed a year ago."
The possibility of negotiations was a natural question after yesterday's surprise announcement in the Intel case. Microsoft and Intel are de facto partners in the so-called Wintel juggernaut of Windows software and Intel microprocessors that dominates today's PC market.
But publicly, at least, Microsoft did its best to contrast the two legal cases. Smith said Intel's case is more closely related to an earlier Microsoft proceeding, which resulted in a 1994 settlement over how it handled the licensing of the Windows operating system to PC makers.
The current case, he said, relates more to product development. The government alleges that Microsoft pushed its own Internet browser to gain unfair advantage in the market.
"We view our situation as our situation," chief operating officer Robert Herbold said. "We're going to do what's right for our consumers, and I don't believe you should think it affects our basic thinking."
Reuters contributed to this report.