Microworkz moves to settle EarthLink suit

PC vendor fails to file countersuit, tries to talk its way out of it

Microworkz appears to back-tracking away from its aggressive stance against US ISP EarthLink following the latter's legal assault on the budget-priced PC maker for alleged breach of contract. Microworkz has not only yet to issue its promised countersuit against the ISP, but actually appears to be trying to settle this one quietly, according to a Reuters report. EarthLink initially fired off a law suit against Microworkz after first terminating a contract between the two companies at the end of July. That contract centred on Microworkz bundling cut-price Internet access with its Webzter Jr PC. In its suit, EarthLink claimed Microworkz had failed to pay it for the 1000 users it had dutifully given free Internet access to. Microworkz immediately went on the defensive, promising a countersuit against EarthLink and claiming that it hadn't paid up because the ISP had failed to provide adequate tech support and that its software was faulty, all of which hit Microworkz' Webzter sales hard and thus damaged the company's business. Of course, a potential Webzter customers wouldn't have known about the alleged problems with EarthLink's software -- an odd claim given that the ISP has thousands of customers using a variety of platforms -- those problems are unlikely to have hurt Microworkz in the way it claimed. It certainly seems that the weakness of the PC vendor's case may well be the key reason for failing to issue the countersuit. The official reason is simple: Microworkz has yet to be formally served with EarthLink's writ. When we get it, CEO Rick Latman told newswires, we'll countersue. Still, Microworkz did quickly enter into settlement negotiations with EarthLink -- talks which, according to the ISP, have since broken down; it is continuing with its legal action. Microworkz has been slammed for its inability to handle orders for its products, and even if you take such claims from disgruntled buyers with a hefty pinch of salt, it's clear Microworkz has to do something to polish its tarnished reputation, however undeserved that reputation may be. The company is hoping its recently signed $300 million deal with AT&T will help it here, as will its self-imposed 10,000 limit on orders for its upcoming $199 iToaster Net access box, which is due to ship this week. ®

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