Heading off potential litigation after Google accused it of violating a 2002 antitrust agreement reached with the Justice Department, Microsoft has agreed to alter the desktop search functionality it includes in Windows Vista.

Google had complained to the Justice Department that Windows Vista's desktop search is anti-competitive because it is difficult to disable and, when Vista's search runs in tandem with Google's desktop search product, Google's product slows to a crawl. Just last week, Microsoft CEO Steve Ballmer told the Detroit Economic Club that claims that Microsoft was violating the Justice Department agreement were "baseless."

However, in a Justice Department status report issued Tuesday night detailing Microsoft's compliance with the 2002 agreement, Microsoft says it will change the way Vista's search product behaves when it releases the first service pack for the operating system, a beta of which the document says is due out before the end of 2007. Microsoft has recently been cagey about any details relating to Vista SP1. Interestingly, the status report says Microsoft still believes Google's complaint is "without merit," but it is nevertheless, "in a spirit of cooperation," changing the way Vista's search works.

The company will allow users to select a default search program, just as they can with Web browsers, media players, and security programs, while maintaining the general ability of Microsoft's Vista search to search from within the Start Menu. Queries from within the Control Panel and certain windows will default to Microsoft's search product, but will include a link to search using third-party products. Microsoft also will make information available to developers to optimize the performance third-party search products.

"We're pleased we were able to reach an agreement with all the states and the Justice Department that addresses their concerns so that everyone can move forward," Microsoft general counsel Brad Smith said in an e-mailed statement Tuesday night. The New York Times had reported earlier this month that the Justice Department had written a letter to states urging them to reject Google's charges, but several states sought to pursue them further.

The report shows evidence of that disagreement. Plaintiffs -- the Justice Department and the states -- are said to have disagreed whether language in the 2002 agreement applies to search technology included with Windows Vista, since earlier versions of Windows not covered under the agreement also included some search technology.

"This agreement -- while not perfect -- is a positive step towards greater competition in the software industry," California Attorney General Edmund G. Brown Jr. said in a statement. "It will enhance the ability of consumers to select the desktop search tool of their choice."