"BW Online has learned that Microsoft (MSFT ) did not put up the money, but did play matchmaker for SCO Group (SCOX ) and BayStar Capital, a San Francisco hedge fund which made a $50 million investment in SCO last October.

"Lawrence Goldfarb, managing partner of BayStar, says that senior executives at the software giant had telephoned him about two months before the investment. Would he be interested in investing in SCO, they asked? Goldfarb wouldn't identify the executives, but says neither Chairman William Gates nor CEO Steve Ballmer were among them. He says Microsoft didn't put any money into BayStar or the SCO investment. A Microsoft spokesman says that the company has no 'direct or indirect' financial relations with BayStar, but declined to comment when asked whether execs called BayStar to suggest investing in SCO."

So, that's that. Except there will be more digging, much more.

Here's a story on another area of competition between Microsoft and Linux:

"Microsoft and Linux are competing on more and more levels these days. A report by IHL Consulting Group released this week shows that Windows 2000/XP point-of-sale (a.k.a., POS, i.e., cash registers) systems saw an increase of 13% in 2003, and Microsoft now controls 70% of the POS market. However, shipments of Linux-based systems saw an increase of 19%, showing that Linux is starting to get a stronger foothold in that industry, too.

"IHL stated that the main reasons given by companies for not moving to Linux-based systems were lack of driver support and the seemingly interminable issues with SCO."

More on BayStar and S2 Strategic Consulting on Newsforge. And now SCO announces a stock buyback.