The Real Media Monopoly

AOL Drops Suit For $750 Million, Joins Microsoft In Alliance

Microsoft Corp. agreed yesterday to pay $750 million to AOL Time Warner Inc. to drop an antitrust suit against the software giant, in a deal that turns one-time rivals into powerful partners.

In addition to settling their legal battle, the two companies -- the world's biggest software maker and the biggest entertainment company -- agreed to collaborate on technology that could one day set the standard for how music and movies are sold over the Internet.

"Now Microsoft gets to own another market which is critical," said Mike Pettit, executive director of ProComp. "It's worth billions and billions and billions of dollars."