Judge Thomas Penfield Jackson's decision to divide Microsoft into two companies will substantially alter the computing landscape for everyone - if it is ever implemented. Little is likely to happen in the short to medium term - the judge placed a stay on his own ruling until Microsoft's intended appeal is made - and it's by no means clear that the judgment will be upheld. This judge has had previous rulings against Microsoft overturned on appeal, and the composition of the Supreme Court at the moment is such that its leanings are opaque.
And, the appeals process could take two years or longer. Judge Jackson has made clear that he wants to "fast-track" the case, bypassing the appeals courts and handing the appeal directly to the US Supreme Court (antitrust legislation allows him to do this). But many legal experts feel the court will probably refuse the case and turn it back to the appeals courts.
The reason is simple: if the case goes directly to the Supreme Court, it's required to examine every piece of evidence submitted in this long-running, longwinded trial. If it goes through the appeals process first, it can instead eventually use the decisions of the lower courts and a more limited body of evidence.
But if implemented in full, what does the decision really mean for Microsoft, its competitors, its investors, and for consumers? Let's start with Microsoft and its competitors. For Gates and the company he founded, the judgment is a serious blow, the business equivalent of having the courts remove a child and refuse visiting rights.
Aside from the pain of losing half his company, Gates also loses the advantage of the close relationship between all the company programmers. A key point of separating off the Windows operating system (OS) end of the company from all other Microsoftian activities is to force a separation between the programmers who refine the OS and the programmers who design other products that work with Windows.
The court feels that Microsoft has consistently made its own products work better on Windows, even deliberately altering Windows so that competitor products work poorly or sometimes, not at all. This allows Microsoft to create de facto standards and gain an unfair advantage over competitors. Now, the company would be required to reveal the inner workings of Windows to its competitors, so that they too could design their products to work with new features as they're introduced.
In addition, Windows would likely surrender some of its market dominance (about 90 per cent of all computers run Windows). If Microsoft products no longer are bundled with the operating system (another facet of the ruling), presumably more products can compete with dominant applications such as Microsoft Office. Other products for competing operating systems may become more attractive, and other operating systems, such as Linux and the Macintosh, should benefit, according to this argument.
Taken together, these features of the ruling would force a realignment of power in the computing industry and decrease the might of Microsoft. As for investors? Let's put it this way: the markets barely reacted yesterday, shrugging off the formal announcement of what everyone had been expecting for two months. Judge Jackson made his intentions clear in early April, kicking Microsoft's share price over a precipice that stripped $150 billion (€157 billion) off the value of the company. The rest of the Nasdaq's tech and dot.com shares dove lemming-like after the software giant, contributing to the disturbed market we're witnessing today. But historically, divided companies have ended up eclipsing the once-whole parent - witness AT&T and Standard Oil.
Consumers undoubtedly will have more choice as Microsoft's dominance is flattened. But will they want it? People have a habit of settling on a de facto standard and one minor option (remember the VHS/Beta video battle). Due to many factors, Windows beat out most operating system competitors except the Mac. As Mac owners know, Apple has adjusted Macs to make them fairly comfortable in a Windows world - but that takes time. Options create compatibility limitations and headaches - and I doubt consumers will be eager to introduce more complexity to their computer desktops.
Finally, Windows is already threatened with irrelevance as the Internet itself becomes a neutral platform for running applications. Few doubt the Web will only grow in importance, as will the ways in which we access it, making computers, too, less central. Thus, time and the growth of the Net will ultimately gut many of the key findings and penalties in this trial.
And Microsoft knows it. It has already regeared the company to fold in an aggressive Internet strategy that it will reveal formally in 10 days, but the hints have been there for months in new product and policy announcements. You can bet that if the company is split, Mr Gates and Mr Ballmer won't opt for the Windows side of Microsoft, but for the multi-faceted other company with its enormous Net-based promise.
Karlin Lillington is at klillington@irish-times.ie
