Microsoft has invested $135 million in software publisher Corel in the form
of non-voting stock. Corel's financial difficulties have been well known for
some time. Basically their products, including WordPerfect Office, have been
crushed by Microsoft marketing power, specifically leveraging their Windows
OEM deals to include bundling Microsoft Office.
As part of the deal, Corel will drop "certain legal actions", but what these actions are is completely unclear as Corel has no claims filed against Microsoft at this time.
This investment deal is very similar to the one Microsoft did when Apple was in need of cash. In return for an investment of similar size, Apple removed Netscape as their preferred Web browser and replaced it with Microsoft's Internet Explorer.
Microsoft and Corel jointly announced that Corel would become heavily involved in developing for Microsoft's .NET initiative.
AnalysisCorel has gained attention for its recent move to supporting the Linux platform, including release of its own Corel Linux distribution and porting of WordPerfect Office and Corel Draw to Linux. These ports are currently mostly Windows code using Wine to enable operation under Linux, but native Linux versions are under development.
Commentators in the Linux community have declared this move is proof that Microsoft is interested in developing for Linux and will be using Corel's expertise. This is totally naive, (as many in the Linux community are). It makes no sense whatever for Microsoft to support a challenger to its desktop monopoly, especially one that is already giving them lots of trouble in the server space.
Microsoft will become more and more insistent on progress on the .NET front, while touting Corel's participation in their .NET promotional efforts. Once Corel is in too deep to back out, Microsoft will threaten to withdraw .NET tools and access if even more progress is not made. Development resources to support all this effort will be pulled from the Linux side, bringing Linux development to a halt.
In the end, Microsoft will tightly restrict Corel's access to .NET and its servers. With no standing on either the .NET or Linux side, Corel will collapse into the chasm between.
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