Microsoft has got no more than it deserves. Its arrogance in refusing to admit any of the serious charges against it has goaded Judge Thomas Penfield Jackson, a conservative Reaganite appointment, into inflicting a more severe penalty than would have happened had the software company shown any serious sign of regret or even of willingness to meet half way. Now, unless an appeal court or the supreme court overturns the judgment, Microsoft will be split into two separate companies. One company will house the Windows operating system and the other, much the more attractive option, when the dominance of personal computers is under attack from the internet and other platforms, will take over the applications. Both will still be monopolies. Windows resides in over 90% of the world's PCs and Excel and Word have an even bigger share of of the spreadsheet and word processing markets.
What will happen? No one really knows. It will depend on human behaviour. It is possible that the two new companies will act like Siamese twins or parallel monopolies, each feeding off the other's monopoly position: new versions of the applications could boost demand for a more advanced version of Windows, and vice versa. If both are run by Microsoft's existing top brass, imbued with its culture, that could easily happen.
The more exciting scenario is that, once freed from umbilical linkage to Windows, the applications company would start to sell its products (and lots of new ones) much more aggressively for other operating systems - like the freely available Linux. It could also unleash more of the huge creative and entrepreneurial talent concentrated at the company's campus, where there is more intellectual fire power per square yard than at almost any other big corporation.
None of this may ever happen. Microsoft may convince higher courts that the justice department got it all wrong. It has a vested interest in stringing the suit out because it will be able to hang on to its monopoly profits for the duration. It knows it will take ages to engineer the break-up when the supreme court has finally ruled. If Microsoft eventually wins, then the US authorities will be saying that old economy rules do not apply in the new age. That would have very serious consequences. Meanwhile, it is reassuring to know that the world's biggest companies are still subject to the rule of law. Even in the globalised economy.
