Judge Orders that Microsoft be Broken in Two
by John B. Virata

WASHINGTON --(June 7, 2000)-- U.S. District Court Judge Thomas Penfield Jackson today ordered that Microsoft Corp., the company that turned a $50,000 investment in the MS-DOS operating system into one of the most important and valuable companies in the world, be split into two companies.

Judge Jackson said in his 23-page ruling that "Microsoft, as it is presently organized and led, is unwilling to accept the notion that it broke the law or accede to an order amending its conduct." Jackson also will ask the U.S. Supreme Court to immediately hear the case. Microsoft will remain a single company until all of the Redmond, WA based company's appeals are exhausted.

Under Judge Jackson's ruling, Microsoft will also face restrictions on the manner in which it conducts business, and will also be forced to give software developers greater access to the source code of Windows.

"Today's ruling represents an unwarranted and unjustifed intrusion in the software marketplace," said Bill Gates, former chairman and CEO and current Chief Software Architect of Microsoft, in an interview with CNN. "We will be appealing this decision and we believe we have a very strong case on appeal."

Jackson's order ran parallel to the government's proposals that the company be split into two companies, one which will develop and sell the Windows operating system and one that will focus on applications such as Microsoft Office, Internet Explorer, and Microsoft's services such as MSN and WebTV.

"I think this (Judge Jackson's ruling) is fine as long as they have behavioral restictions because they really are abusive to the innovation process regardless of what their protestations say today, " said Jim Barksdale, former CEO of Netscape Communications Corp. in an interview with CNN.

Under the order, Microsoft would also face restrictions on its business conduct, including giving outside software developers greater access to the Windows source code.

While the company will appeal, it has been ordered to submit a plan on how it will break itself apart within four months.

For more information on the case against Microsoft, click here.