Bill Gates Blinks

Is Microsoft's settlement with the feds a white flag, or a tactical retreat in the battle to rule the Web?

Say what you will about Bill Gates--the man knows when to swallow hard and cut a deal. At first blush, the abrupt announcement last week that Microsoft had settled one round of its continuing dispute with the Federal Government--by agreeing to let PC makers remove the icon for the company's Web browser, Internet Explorer, from their machines' desktops--looked like abject capitulation. But as usual, the closer you look, the craftier the CEO's reasoning seems.

At issue was whether forcing PC vendors that license Microsoft's Windows95 to take Explorer as well constitutes product "tying"--a violation of the consent decree signed by Microsoft...

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