Talks between Microsoft Corp and AOL-Time Warner Inc to ship the AOL Internet service with the next version of the Windows operating system failed yesterday, sunk by wrangling over legal issues, instant messaging and digital media.
The software giant and the Internet and media behemoth have been in talks for weeks over bundling the AOL Internet access service in Microsoft's upcoming operating system, called Windows XP.
But senior executives from both companies who spoke by telephone yesterday morning were unable to reach an agreement, Microsoft spokesman Vivek Varma said.
"Earlier today, discussions between AOL and Microsoft ended without agreement on a broad range of issues," Mr Varma said.
Although dialogue between the companies has broken down and restarted several times, Mr Varma said Microsoft now felt discussions were not likely to resume.
"While unable to conclude a broader deal, Microsoft will continue our work to ensure the AOL service runs well on Windows XP," he said.
"We're disappointed that we couldn't conclude a broad deal, but we're open to partnership opportunities going forward and hope to have discussions with AOL-Time Warner in the future," Mr Varma said.
AOL could not immediately be reached for comment.