Microsoft has offered an 11th-hour compromise to the US Department of Justice and the state attorneys general who were about to file a broad antitrust case against Microsoft, according to Microsoft and officials close to the governments' case.
The DOJ has issued a statement saying that while discussions continue over the next several days, Microsoft will not ship Windows 98 and the DOJ and the states will not file lawsuits.
Microsoft, in a statement, confirmed that it has completed all work to develop Windows 98, but has agreed with the DOJ and the state attorneys general not to release the product until Monday.
Microsoft said that it is taking this step so that discussions with the government, which have been proceeding over a week, can continue.
The company made the overture to the DOJ, and the department and several attorneys general are now in discussions about a compromise, the sources said.
"Since we were working on the case and coordinating with Justice, I think there was the hope on their part that all the cases could be settled ... at once," said one source at a state attorney general's office.
The discussions about a compromise will most likely continue over the weekend, said another state source.
For its part, Microsoft said it is continuing with plans to release the operating system to consumers on June 25.
(Additional reporting by Rebecca Sykes and Nancy Weil in Boston.)