Microsoft gives Apple a bite of the action

In a remarkable departure from traditional business strategy, Microsoft has begun offering a discreet helping hand to software writers developing Internet programs for its oldarch-enemy, Apple Computers.

Microsoft has quietly set up a special unit of experts familiar with Apple's Macintosh operating system to oversee the project at a location in San Jose, California, just a few miles from Apple's corporate headquarters in Cupertino. About 60 people will work at the new division.

Given Microsoft's historical rivalry with Apple, the initiative seems baffling. But the company wants to help keep Apple alive because without it Microsoft believes it would be vulnerable to new anti-competitive inquiries by the federal government.

Under the leadership of its new chief executive, Gilbert Amelio, Apple has tried this year to reverse a slump in its fortunes, marked by unprecedented losses and a rapid erosion in its world market share. Exploiting the Internet is the cornerstone of the rescue effort.

The new Microsoft unit, the existence of which only surfaced at a MacWorld trade show last week, even has the authority to offer unconditional grants of up to $100,000 to software writers producing Internet programs exclusively for the Mac system.

In the meantime, Microsoft, founded by Bill Gates, has dropped the traditional requirement that software writers linked to the company should always write programs for its own Windows system when also engaged on projects for Apple.

Writers can now develop programs aimed solely for the Mac system. The change in attitude says as much about the new confidence of Microsoft - which has changed tack to focus on the Internet - as aboutthe parlous state of Apple. Windows is now the operating system used on about 80 per cent of all personal computers in the world. But Apple has seen its own market share dive into single digits.

Don Bradford, a Macintosh developer who is running the new Microsoft unit, has been quoted as saying that his mission is to "help make sure that Apple's market share stays between 8 and 11 per cent".

Mr Bradford recently admitted to the Wall Street Journal that worries about pressure from competition regulators in the government may be behind Microsoft's move. He added that Microsoft could not "forget the Justice Department".

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