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  Bill Gates


Are two Microsofts better than one?
Microsoft's competitors argue that a breakup could get the bully off their backs.

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By Janelle Brown, Damien Cave and Katharine Mieszkowski

June 8, 2000 | As expected, Federal District Court Judge Thomas Penfield Jackson ordered the breakup of Microsoft into two separate companies on Wednesday -- one responsible for the Windows operating system and the other for software applications. Microsoft has four months to present a plan to the court indicating how it will proceed. Microsoft is expected to appeal, but during the appellate process, Jackson also enjoined Microsoft to abide by a series of conduct restrictions limiting its ability to leverage its market power in anti-competitive ways.

In advance of the judge's decision, we interviewed a group of prominent software executives to learn how they think a breakup would affect the industry.




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Ransom Love, CEO of Caldera Systems, a distributor of Linux-based operating systems which reached an out-of-court settlement with Microsoft earlier this year in its own antitrust suit against the software colossus. Caldera had charged Microsoft with using its dominant position in P.C. operating systems in the early 1990s to crush competition

Let me tell you, [the very idea that the company could be broken up] is already having a tremendous effect. For the first time in years, there's hope. I don't know how to describe it any other way, but as I go around the world, I see companies looking to do the right things, to make the right kind of investments in innovative technologies. It's all because they have the hope that they're going to be able to be competitive in the market.

I think the suit's ramifications are going to be very significant -- and I think they're already having the effect of stimulating innovation, creativity and opportunity back into the industry. In talking to major business leaders, analysts and others almost every single conversation includes someone saying, "If this break-up goes through, we can do this, this and this."

In regard to Linux, and our business in particular, it opens up the doors to partners and relationships. We've been very vocal about some of our concerns with Microsoft, and we have had companies not willing to do business with us for fear of retaliation, now come and form stronger strategic relationships with us.

Microsoft has a tremendous opportunity here to become a true leader instead of a dictator, if they would just voluntarily break up the company and move forward on their individual merits rather than the practices that they've held to for so long.

Jon Stephenson von Tetzchner, CEO and co-founder of Opera Software, an Oslo, Norway, company that makes the Opera browser, which competes with Microsoft's Internet Explorer

A breakup will open new possibilities for us. If you look at what's come out of the case, the findings of fact and of law, it's obvious that their practices have been hindering us from doing work on the Windows platform. Our market share now is between one-half of a percent and 1 percent; we could have had many more users if it had been possible to bundle the browser with machines. But Microsoft forced Compaq to drop Netscape, so I doubt Compaq would have taken much of a chance on us.

With a breakup, we expect to get Opera on many more machines. We can't say how many, but we expect our market share to grow. And I don't know how long it will take for the split-up to take place. It could take years, which is why we have been planning more on the status quo in the market, with Microsoft being there. But if the split-up happens, we see that opening doors. It's opening the possibility for us to do deals where the choice of the browser is based on the customer's decision, not on what operating system they're using.

We also think the trend away from PCs is a very important trend for us. In a way, that's because the Windows market has been very difficult for us. We'd be very happy to sell Windows browsers, but we'd be happy to sell browsers in Internet-only devices as well, which is why we've focused not just on Windows but also on EPOC, BeOS, Linux and Mac platforms.

Of course, everyone obviously likes the challenge of competing with Microsoft, but ... even if the company gets divided, there will be an Internet Explorer browser with a huge market share. We'll have a more even playing field, but we'll still be competing. Even if the browser or the company has a different name, to us it will still be Microsoft.

. Next page | "Bill Gates running one company and Steve Ballmer running the other -- well, whoopdeedoo"
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Photograph by AP/Wide-World


 



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