Eric S. Raymond has published a leaked SCO memo describing a recent investment in SCO as hidden Microsoft funding of the Linux IP rights lawsuit. The memo has been confirmed as authentic according to ESR's website - but obviously SCO's people are nuw busy disputing the accuracy of the information despite acknowledging the memo. It seems entrely implausible that a discussion as given in the letter - a consultant argues over what fee he should earn for bringing in the Microsoft money - would go on at all if nobody at SCO thinks this is the service the consultant has provided.

This is just appalling if true. A 100 mio$ exercise in abusing the legal system with bogus lawsuits against the opposition. In fact this is so bad that I'm surprised SCO and MS is not controlling this in a different way through the argument along the lines of "We at MS share the belief held by SCO that open source is a threat to the American way of life so we're offering our economic assistance to beleaguered SCO so they can fight the unamerican, property invading behemoth that is IBM". We've certainly heard a lot about those teenage commie Chinese renegade, open source slackers/hackers you're entrusting your vital business information to when you use open source software.

(Coverage of the whole story in Wired)

[UPDATE (The Register also comments wrapping up some dissenting commentary indicating that the plot involving Microsoft simply does not add up]

[UPDATE II: MS actively denies these rumours]