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Microsoft ducks DOJ by ditching Corel stake?

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Microsoft has given itself the option of ditching its 24 per cent stake in Corel, eight days after it confirmed the deal was part of a new investigation by the Antitrust Department of the US Department of Justice.

If it converts the new shares, Corel keeps the cash that Microsoft paid for the shares in October, but Microsoft couldn't be construed as having an influence on Corel. That's significant, reckons Brian Proffitt, who unearthed the story from SEC filings Microsoft made on Tuesday, for LinuxToday.

However, as the Microsoft shares were non-voting class A stock, Redmond didn't have an explicit say in Corel's business. Now, perhaps, it wants everyone to know that. The DoJ subpoenaed documents relating to the Microsoft from Corel a month ago.

A Corel spokesman told Proffitt that the MS sale would not affect the company's determination to spin-off its Linux division. Having made the write-downs and budgeted for inventory in the previous quarter, it could well be more costly for Corel to return to a Linux path.

The remaining portions of the Corel-MS deal are still in place, we can assume. These include a commitment by Corel to produced a .NET-ified version of each Corel product within six months of an upgrade to .NET, and to use Windows Media and Microsoft's HTML formats. And that "Covenant Not to Sue", of course. The deal also gave explicit staffing numbers for the option of Corel undertaking a Linux port of .NET, an option that's unlikely to be exercised if Microsoft walks away from Corel. ®

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