An influential Wall Street analyst indicated yesterday that Microsoft wanted to reach a swift settlement of its anti-trust battle with the US government.
Rick Sherlund, technology analyst at Goldman Sachs, said in a note to investors that the settlement talks with an independent mediator "may be heating up as we near the end" and he was "hopeful" that an agreement would be reached.
He predicted that such a settlement would lift the group's share price, which has been depressed by the legal battle in the past two months. Shares in Microsoft rose 6% to more than $96 at midday yesterday, valuing the company at more than $500bn (£323bn).
Mr Sherlund, who helped take Microsoft public 13 years ago, issued the note after a meeting with Microsoft's new chief financial officer. In it, he stressed that "management appears very focused on settling the [Department of Justice] lawsuit" and "there appears to be a flurry of activity on the settlement front".
However, he warned that Microsoft would not comment on the state of the talks and suggested the company had ruled out "any self-imposed break-up". Such a refusal has been at the heart of disagreements in the legal dispute.
Government lawyers have indicated that the extent of the company's monopolistic be haviour demands a structural remedy. Judge Thomas Penfield Jackson is expected to publish his findings in the next month or so. Any sign of a breakthrough in the settlement talks, being conducted by an independent mediator, could delay this judgment, however.
Other analysts have also suggested that the severity of Judge Jackson's earlier ruling against Microsoft could encourage the company to concentrate on an appeal. George W Bush, the presidential front runner for the Republican party, has voiced opposition to the anti-trust case.
The analysis by Goldman Sachs also offered a bullish revenues outlook for the company. In his meeting with the bank, John Connors, Microsoft's new chief financial officer, said March sales were likely to return to double-digit growth partly because of the launch of Windows 2000 and receding millennium bug fears.
Microsoft also announced yesterday a strategic alliance with NDS, which provides software for digital set-top boxes. Rupert Murdoch's News Corporation owns 80% of NDS. The London-based software group is likely to be one of the companies included in the sell-off of satellite operations being considered by News Corp. Microsoft has been in talks with News Corp about buying a stake in the satellite business.
Abe Pele, chief executive of NDS, said yesterday that there had been no discussions involving Microsoft taking a stake in NDS. He said that the two companies would work together on improving digital televisions for clients.
"Microsoft's adoption of NDS's open system solution for enhanced television will be a major boost to the industry as it builds momentum throughout the world," he said.
Under yesterday's agreement, Microsoft and NDS will pool marketing and engineering resources in development of digital television products.
• Microsoft is supplying "boxes and boxes" of documents to the European Commission's inquiry into the Windows 2000 operating system, a spokesman for the company said yesterday.
