In an email delivered to all of Microsoft's 33,000 employees, president and CEO Steve Ballmer explained that the company would make further "substantial" settlement offers and that its lawyers were working hard to end the trial without compromising the company's ability to innovate. Ballmer cited inaccurate and unreliable press reports about the settlement talks, though he declined to provide specifics, as the talks are private and confidential.

"Over the past few days there has been a great deal of press coverage concerning the settlement discussions between Microsoft and the Department of Justice and the States," Ballmer's email begins. "I am sure many of you have been reading these news stories. Many of these stories have been largely inaccurate, sometimes reporting that the case has been settled, other times reporting that Microsoft's settlement proposals are "inadequate." Neither of these extremes are true. Given the nature of this situation, most of the press coverage reporting on the supposed details of what is being discussed is also unreliable."

Though the company at one time appeared belligerent in its defense of its business practices, Ballmer's note suggests that a more pragmatic, realistic approach to the case had finally settled in.

"What is true is that we are still in talks with the government in an effort to resolve the case," he continues. "\[Bill Gates\], with lots of help from \[his executive staff\], is focused on these efforts and we are working closely with our legal team. We have made, and will continue to make, substantial proposals to settle this case. While we're very sure of our legal position and we're prepared to take it all the way on appeal, we've learned that discretion is the better part of valor, so we are working very hard to resolve the case through settlement. We believe we've put more on the table than the judicial process would ultimately provide, even if we lost the case. Any settlement must preserve our ability to innovate and improve our products. We do not know if these efforts will result in a settlement or not, but you can be sure that we are working hard and creatively, and will continue to do so."

And finally, a cautionary note: As the Microsoft antitrust case heads to its to-the-wire conclusion, the rumor mill is going to start churning at a furious pace. Ballmer cautions his employees to remain calm while the settlement talks progress.

"In the days ahead, we will see even more rumors and speculation about the settlement process," his note concludes. "The federal Judge mediating this process has ordered all parties to maintain absolute confidentiality about the substance and process of the mediation effort, and we will continue to honor this obligation. But rest assured that we are working to try to reach a fair settlement so we can put this case behind us and focus all our energy on building great software. As soon as there is anything concrete to report, I will send you another email to let you know. Until then, you should take every rumor or report about the mediation process with a big grain of salt.