SCO had admitted that a leaked e-mail apparently showing Microsoft that helped it raise tens of millions of dollars is genuine, but denies the document demonstrates the software giant was involved in raising venture capital for it.
The e-mail from an outside consultant involved in brokering deals for the company to two top SCO executives has been posted to the Open Source Initiative website. In it, the consultant suggests that Microsoft "brought in $86 million" (£47m) for SCO and that between $16 million and $20 million more is underway.
It directly links Microsoft to the $50 million invested in SCO by a group led by BayStar Capital, announced last year - a connection that has always been denied. BayStar was "a Microsoft referral", according to the e-mail.
If true, the document shows a close financial link between Microsoft and SCO - something that critics have long suspected but been unable to prove. With SCO embarking on a legal crusade against open-source operating system Linux - a main rival to Microsoft's Windows OS - it is clearly in Microsoft's interests to provide SCO with funds but such a link has always been refuted.
So it was again yesterday.
SCO confirmed the authenticity of the 12 October 2003 e-mail, but claimed the contents were wrong and based on a misunderstanding. "We believe the e-mail was simply a misunderstanding of the facts by an outside consultant who was working on a specific, unrelated project to the BayStar transaction. He was told at the time of his misunderstanding," a SCO spokesman said.
The e-mail was sent by Michael Anderer of S2 Strategic Consulting to Chris Sontag, SCO senior vice president and general manager of the company's SCO source division, and Robert Bench, SCO's chief financial officer. The SCO source division oversees licensing of the Unix vendor's intellectual property.
Open source advocate Eric Raymond claims the email represents a "smoking gun." It confirms that Microsoft, which has identified Linux and open source as one of its main competitive threats, is doing much more than buying a license on Unix technology from SCO, Raymond comments on the Open Source Initiative's Web site.
An SCO spokesman denied such an interpretation however: "Contrary to the speculation of Eric Raymond, Microsoft did not orchestrate or participate in the BayStar transaction," he said.
Microsoft and Sun signed Unix licensing deals with SCO in 2003, earning the company $13.5 million, but the leaked memo appears to suggest that SCO has made far more money off of Microsoft than previously thought.