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Interesting story for sure, but I don't see anything wrong with it on several levels (seems implied, but I may be wrong).

1) It was an acquisition. Didn't Google also have C# when they acquired Writely? Don't think it was advertised much either.

2) Python is a language. Eventually that get's compiled down to probably native C instructions at that time, right? Probably not like it was an open-source module distributed in violation of a license?

What I like though was how the author and Microsoft did to "get it shipped."

*.pyc generally implies that the interpreter was still in place, rather than generating a native executable file.
I don't think the article was implying there was anything wrong with it. Just a curious tidbit that one of the first big companies to use production code in Python was Microsoft.

Also, programs written in Python are not subject to Python's licensing terms so there's no violation there. That would only happen if they modified the interpreter itself.

I think the point was that this was in 1996, long before Python entered mainstream use.
> With a mad sprint starting in July, we shipped Microsoft Merchant Server 1.0 in October, 1996.

Sounds like it was a direct competitor to Viaweb.