The notion of a corporate breakup shakes the very foundations of Microsoft Corp., the company that values integration over all things. Microsoft and anti-regulatory stalwarts are horrified at the idea of separating and regulating the way that Microsoft is allowed to conduct its business.
But who will really gain from it all? I would argue that consumers and corporate customers are footing the bill for a procedure that may not affect them for years.
The court case focused largely on Microsoft's competitors, Netscape Communications and Sun Microsystems, and the way Microsoft misused its power to set up barriers to competition. Imagine the glee at Oracle, Sun, and other competitors' headquarters last Friday night as they listened and read the government-recommended dismantling, and potential enfeebling, of Microsoft.
Apart from a blow to the corporate psyche, will a breakup hurt Microsoft financially? Splitting up Standard Oil enriched the stockholders of the various new companies. Some financial analysts are already speculating that the two new companies, one for operating systems and one for applications, will eventually be worth more individually than apart.
A breakup certainly serves the antitrust interests of the Department of Justice and the states involved in the suit. Much as they did with IBM Corp. and AT&T Corp. in the past, antitrust enforcers have tried to control companies that had too much market power. And setting a stake in the ground in the crucial technology arena gives the entire high-tech industry more regulatory structure, even if Microsoft wins the case on appeal.
Microsoft, meanwhile, has played its cards wrong to this point. With not much sympathy from the public or corporate consumers, the company remains defiantly defensive on every issue, from its OEM contracts to its policy on releasing APIs to the industry. With the distractions of implementing a breakup, it looks as if Redmond and its customers will pay the price.