Microsoft-Google Settle Kai-fu Lee Case

Google Dr. Kai-fu Lee.

The two software giants have "settled their pending litigation" with a private agreement that resolves all issues to their mutual satisfaction," according to a statement released by Microsoft Thursday night.

No terms were disclosed but the move apparently ends a months-long tug of war between the superpowers.

Lee, an expert in speech recognition, joined Microsoft five years ago and worked on its MSN search technology. In July, he left to head Google's China operations.

Microsoft sued Lee and Google in Washington state court, contending that Lee's job at Google violated terms of a non-compete agreement he had made with Microsoft.

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Google, Mountain View, Calif., responded with its own suit in San Jose. In September, the Washington judge said Lee could work for Google, but restricted the type of projects he could work on, affectively prohibiting him from working on search, until the trial. Lee was, however, able to start recruiting and working in China for Google on other things.

It is unclear from the statement whether Lee's work will be restricted in any way.

The public litigation highlighted the harsh rivalry between the companies. Google leads the world in Internet search, an area of keen interest to Microsoft.

Google is starting to dabble in applications that could challenge Microsoft's ownsuch as gMail, which competes with Microsof'ts Hotmail and MSN mail offerings.

One set of court documents from a former Microsoft employee, asserted that Microsoft CEO Steve Ballmer promised "to kill" Googlea characterization Microsoft has called overblown.

On the flip side, other documents showed that that a Google executive recommended that the company pursue some Microsoft execs "like wolves."