June launch for Windows 98

The release of Windows '98 has been dogged by legal challenges

The Microsoft Windows 98 operating system upgrade will go on sale on June 25 costing $109 (£65).

Microsoft officially announces the release date and price on Tuesday, but they have been circulating for weeks. At least one Internet-based retailer began taking orders last month at $95 (£57) a copy.

The upgrade will probably be discounted in most stores for $89 to $100 (£53 to £60), a company executive announced.

Although federal and state regulators examining Microsoft's business practices could still try to block release of the product, time is running out.

Completed software codes will be shipped to computer manufacturers by mid-May, so some new machines preloaded with Windows 98 can go on sale on June 25.

Microsoft's monopoly challenged

Microsoft executives met regulators at the US Justice Department in Washington last week to discuss the federal investigation, which in part has focused on Windows 98 and its integration with the company's Internet Explorer browser technology.

The Justice Department argues that Microsoft's effective monopoly in the operating system market to boost its share of the browser market over rival Netscape violates a 1995 agreement.

In January, Microsoft agreed to comply with a court order by giving computer manufacturers the right to install Windows 95 without the Internet Explorer browser icon on the computer desktop.

Windows 98 is likely to become the standard operating system for new personal computers. However, company executives have tried to limit expectations over how many of the 120 million Windows 95 users will invest the time and money needed to upgrade.

The system is in the final stages of testing by 100,000 end users, including 70,000 ordinary consumers who paid about $30 (£18) for a preview of the product.