US regulators are close to recommending that Microsoft be split
into two and a proposal is expected to be announced early this
week, according to US reports.
Under the recommendation, Microsoft would be forced to split off
the Windows operating system from the rest of the company. The
Windows business would be permitted to include functions to browse
the internet, while the second company would sell Microsoft
software applications, including Word and Excel.
But if a decision is made to split the company into three, the
third would target the internet with Explorer and MSN, the Seattle
giant's web portal and ISP that competes with America Online (AOL),
Federal officials have been working on a remedy recommendation
since Judge Thomas Penfield Jackson ruled that Microsoft had abused
its monopoly position in the software market.
While it is unclear whether the US government has signed off
any proposal, sources said Attorney General Janet Reno has already
been briefed on the Department of Justice's (DoJ's)
Microsoft said it would vigorously fight any plans to split up
the company and chief operating officer Bob Herbold, told
journalists that such a ruling would be "inappropriate."
He said Microsoft would fight any penalty through the appeals
process. "We think any discussion around remedies are completely
inappropriate. They don't match what's going on in the
marketplace," he argued.
Although the company plans to challenge a breakup, David
Readerman, an analyst at San Francisco investment bank, Thomas
Weisel Partners, said: "If it gets Joel Klein [DoJ Assistant
Attorney General] and Judge Jackson completely out of [Microsoft's]
business, it might be a fair trade."
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