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It was easy to miss among the talk of iLife updates and MacBook Pro debuts, but today’s Expo keynote also featured the latest development in the Microsoft-Apple saga, a relationship with more twists and turns than your average romance novel.

The short version: Apple and Microsoft are still buddies. The slightly longer version: Microsoft and Apple inked a new agreement in November 2005 that lists the following three conditions:

  • Microsoft will develop new versions of Office for both PowerPC-based Macs and those with chips built by Intel;
  • Apple will deliver “groundbreaking technologies” to Microsoft in a timely manner, so that latter can support them in Office; and, perhaps most significantly…
  • Microsoft will continue to make Office for the Mac for a minimum of five years.

Now maybe you’re like me and you’re wondering, “Or else what?” In others, just for the sake of argument, let’s say Apple has a groundbreaking technology that it doesn’t deliver to Microsoft in a timely manner—what happens then?

A whole lot of nothing, says Scott Erickson, director of product management and marketing with the Microsoft Mac Business Unit. “This [agreement] isn’t about [penalties],” he said, when my colleague, Jim Dalrymple and I, posed the indelicate question. “It’s about reassuring the public.”

In other words, this is a pact that essentially re-affirms what Microsoft and Apple have already been doing for some time now for the express purpose of spiking all those ageless “Will Microsoft abandon the Mac?” stories—at least until late 2010, anyhow.

Maybe you also noticed that the agreement seems to only mention Office while omitting another Microsoft offering. So I posed that question to Erickson, too.

Not to worry, he says. “We’re waiting for the final version of MacTel to become available” before seeing how Virtual PC fits into the order of things, he says. “But we’re very interested in continuing that product.”

Just so there’s no confusion, though, let’s see what Roz Ho, general manager of the Mac BU, has to say, in a quote lifted directly from Microsoft’s own press material:

Virtual PC 7 remains the top emulation software for Mac PowerPC users. However, applications like Virtual PC that are highly dependent on the OS will not run under Rosetta. These types of products require a dedicated team and a lot of work to rebuild them for an entirely new architecture. That said, we know that using Windows-based applications on Macs is important to our customers, and we’re working with Apple to figure out the best way to bring this technology to Intel-based Macs. We’ll have a better idea once we have the new machines and can accurately evaluate just what is required to transition the product.

And if that doesn’t reassure you, consider that the last time Microsoft and Apple announced a five-year pact during an Expo keynote, it featured the Big Brother-like visage of Bill Gates smiling down on Steve Jobs. So at least this time around, you were spared that visual.

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