Microsoft says Vista to allow Google search engine

WASHINGTON (Reuters) - Microsoft Corp. (Nasdaq:MSFT - news) on Wednesday said the company was adopting voluntary principles to guide development of its flagship Windows operating system, which will include allowing computer manufacturers to set Google and other non-Microsoft search engines as a default.

Brad Smith, Microsoft senior vice president and general counsel, said the company was committed to creating a transparent system that allows open competition among software developers and computer manufacturers, and wide choice for customers.

"If a manufacturer wants to set competing search services ... by default, they can do so," Smith said in a speech at the New America Foundation, a Washington public policy institute.

Microsoft's plan to include a search service to compete with industry leader Google Inc. (Nasdaq:GOOG - news) in its new Windows Vista operating system has caused concern that the two companies may engage in the same kind of legal fight as the Microsoft-Netscape browser war in the late 1990s.

Microsoft signed an antitrust settlement with the U.S. Justice Department in 2002. Parts of the settlement will begin expiring next year, although Microsoft agreed in May to extend one key provision involving licensing of technical data.

Microsoft plans to ship the new Vista operating system in early 2007.

"Our goal is to be principled and transparent as we develop new versions of Windows," Smith said.

Earlier this month, the

European Commission fined Microsoft 280.5 million euros ($356.6 million) for failing to comply with EU competitiveness requirements.