Microsoft will pay $150 million to end long-standing legal issues.

April 11, 2005

Microsoft and Gateway have agreed to resolve all legal issues between them and work together to develop and market Gateway products, the companies said on Monday.

The agreement provides for periodic Microsoft payments to Gateway totaling $150 million over four years. Gateway will drop all antitrust claims against Microsoft.

Microsoft shares were up $0.10 to $25.04 in recent trading; Gateway shares were up $0.08 to $4.16.

Gateway expects to use the funds for marketing initiatives, including advertising, sales training, and consulting, as well as for the research, development, and testing of new Gateway products that can run current Microsoft products and Microsoft`s next-generation operating system and productivity software.

``Gateway continues to enjoy a strong relationship with Microsoft and we`re pleased to put these legacy legal issues behind us,`` said Wayne Inouye, president and CEO of Gateway. ``We look forward to even greater collaboration with Microsoft going forward as we work together towards the future of computing.``

Gateway’s complaints were highlighted by Microsoft’s antitrust lawsuits in the mid-1990s. Today`s agreement resulted from a recent mediation, both companies said. Microsoft said it is ``very pleased to be able to resolve our past differences in a constructive manner that will allow us to continue our focus on the interests of our mutual customers.``