Microsoft will continue working with Apple to create products bridging the gap between Mac and Windows, including adding .Net compatibility, the company announced yesterday.

The announcement ended speculation that Apple and Microsoft would stop working together in August 2002 – the date that marks the end of their historic five-year agreement announced at Macworld Expo Boston 1997. The original agreement (signed August 5 1997) meant Microsoft would develop products for Macintosh for five years – partly in return for Apple dropping several patent-infringement law-suits against Microsoft.

Above and beyond Kevin Browne, Microsoft's Macintosh Business Unit's general manager, said at a special press conference at Microsoft’s campus in Mountain View, California: “The agreement has ended, but our business is absolutely continuing,” he told Cnet. “The business unit was begun before the agreement was signed”, he said.

Browne said that as a business unit his group aims for success and profitability. He stressed that some of the unit's actions went beyond the requirements of the original agreement: “If you compare what we said we’d do to what we actually did, we have gone far beyond the agreement”, he said.

“The relationship between Microsoft and Apple really has nothing to do with the technology agreement. The technology agreement never has and never will define what we do on the Mac or how we do it”, reports MacCentral.

Office update and new version Looking forward, Microsoft will introduce an update for Office v.X in May or June, which will repair bugs, improve performance, and support anti-aliased text and ODBC (Open Database Connectivity) databases. It will also let Office talk to FileMaker servers. Internet Explorer is also being updated to deliver better performance, security and implementations of HTML and XML.

A Palm conduit for Entourage is promised, as is a re-vamped MSN Messenger application for Mac. This will include the voice over IP support and file-transfer capabilities already built-into the Windows XP version of the app.

The company also hopes to tighten integration with other devices (such as PDAs) into its Mac products. Microsoft expects to ship the next version of Office for Mac in mid-2003, reports PCWorld.

As Mac OS X becomes the dominant Mac operating system, Microsoft will be able to devote more of its engineering resources to OS X development. Browne described himself as “happy” with the products the 150-strong unit is producing, but aims to take them to a higher level. New applications are also “being looked at” he said.

Mac .Net strategy As expected, Microsoft discussed the Macs place within its .Net strategy. Macs will be able to access .Net as clients using XML and Office.

Browne said: “The way we look at the Mac is that it's a great client platform to connect to .Net,” MacCentral reports. There are no plans to support the Mac as a server for .Net services.

Such .Net services for Mac will include the capacity to access Entourage calendars and contacts from any computer. Tellingly, he also promised the application of .Net will “help simplify” integrating Macs into corporate networks.

To mark the relationship, Microsoft has uploaded an ad called "Happy Together" onto its site. Viewable using Windows Media Player, it’s a zany look at the relationship between the companies.