According to reports from the Microsoft Corp., its chairman Bill Gates said on Wednesday that the software giant was willing to go "a long way" to address the government's concerns over its business practices but can not accept limitations on its ability to develop software,

Speaking to more than 2,000 shareholders at the company's annual meeting, Gates acknowledged that the company was disappointed with US District Judge Thomas Penfield Jackson's 207-page "findings of fact" issued Friday, which concluded that Microsoft used its monopoly power to squelch competition.

While Gates reiterated the company would prefer to settle the case out of court if possible, he and other executives repeatedly said the preliminary ruling was only one step in a long legal process that appears headed for appeals.

"I still believe that the American legal system at the end of the day will recognize that Microsoft's innovations and behavior were completely fair and brought tremendous benefits to millions of consumers," Gates said, "We're willing to go a long way to address the government's concerns, but if we can't add Internet support, we can't add any new features."

He said, "If we can't define the user experience of Windows so that all Windows machines operate the same way, then the Windows brand is meaningless."

As for the more radical solution of breaking the company into pieces, Chief Operating Officer Bob Herbold said executives had seen nothing in Jackson's findings to justify such as drastic remedy.

He declined to comment on settlement talks with the government that are expected to resume as early as this week in Jackson's chambers.