When Microsoft's Canadian lawyers discovered Rowe's Web site, they told him that he was infringing on Microsoft's trademark and demanded that he transfer the domain in exchange for $10, the cost of his registration fee. Rowe refused, because he liked the domain name and had spent money starting his Web design business, so he asked for $10,000 to "cover his costs" and contacted the press. Last week, Rowe's story was published all over the world, and Microsoft's press relations machine eventually said it had taken the matter too seriously.

In the end, Microsoft and Mike Rowe came to an agreement. In exchange for transferring control of his domain name, the software maker has promised to help Rowe set up a new Web site; pay for a Microsoft certification course and subscription to the Microsoft Developer Network Web site; and pay for his family to visit Microsoft Research Tech Fest in Redmond, Wash., in March. To top it all off, he will get an Xbox with some games.

"We believe he's a bright young man with great potential," Microsoft spokesman Jim Desler said, reading from a prepared statement on Friday. "We have agreed to help redirect any traffic to his new Web site to ensure that he does not lose any business."

Rowe's new Web site, which is called MikeRoweForums.com, already has more than 700 members and carries advertising banners for file-sharing service Warez P2P. In a posting to a forum discussion on the site, Rowe said he had decided to settle, because he didn't have a fraction of Microsoft's resources and couldn't face spending the next few years in a courtroom.

"I have a budget of about $1,000 to spend on lawyers, while Microsoft has a billion. If I happened to lose, after everything, I would have to pay the lawyers myself, which would make the rest of my life horrible," he said.

Rowe has offered to return any money donated to his defense fund. "As Microsoft has kindly offered to pay my out-of-pocket expenses, these donations will no longer be necessary. As I have said from the beginning, I was not into this to make money," he added.

Munir Kodatia of ZDNet UK reported from London. Reuters contributed to this report.