Microsoft must remain in one piece to innovate: Gates<\/p>\n
SEATTLE (AP): Microsoft Corp. chairman Bill Gates said on
\nTuesday that consumers would be hurt if his company were broken
\nup by the federal government because the synergy between the
\nvarious divisions and products are the key to his company's
\nsuccess.<\/p>\n
In an interview with The Associated Press, Gates said new
\nversions of the Windows operating system, the software that
\npowers the vast majority of the world's personal computers, would
\nbe stunted if the Windows or Office software divisions were split
\nfrom the rest of the company.<\/p>\n
"We wouldn't have Windows today if it hadn't been for the
\nOffice group and the Windows group working together," Gates said,
\nspeaking by telephone from a computer hardware developers'
\nconference in New Orleans. "It was the thinking that was done,
\nbeing in one company, going after a new user interface, taking a
\nhuge risk, that we were able to create Windows."<\/p>\n
Gates' comments came as the U.S. Justice Department briefed
\nWhite House officials on what remedies the government would seek
\nin its antitrust action against the company.<\/p>\n
Gene Sperling, head of the president's National Economics
\nCouncil, said it was strictly an informational briefing and that
\nPresident Clinton was not expected to take part.<\/p>\n
Sperling refused to say whether Clinton's advisers would make
\nrecommendations on how Justice should proceed in the case. "We
\nare not going to answer hypothetical questions," he said.<\/p>\n
Treasury Secretary Lawrence Summers said it was appropriate to
\nhave a briefing on issues that have important economic
\nramifications.<\/p>\n
Attorneys for the Justice Department and the 19 states that
\nsuccessfully sued Microsoft for antitrust violations are
\nconsidering breaking up the company as a way to curb
\nanticompetitive practices.<\/p>\n
One reported option would be to split the company into two or
\nthree parts, each selling separate products, such as the Windows
\noperating system or Internet content. Another alternative would
\nbe for Microsoft to divest its dominant Office software suite,
\nwhich includes word processing (Word), database (Access),
\npresentation (PowerPoint) and spreadsheet (Excel) programs and
\ncontrols more than 90 percent of the market.<\/p>\n
Microsoft has said it would fight any move to break up the 25-
\nyear-old company. Gates said the next generation of Windows,
\nwhich will help power various consumer electronics devices as
\nwell as personal computers, depends on the interaction between
\nhis company's divisions.<\/p>\n
"We need to have our research people, our Office people, our
\nWindows people all in one group taking breathtaking risks on this
\nbreakthrough user interface that is delivered in this next phase
\nof the internet," Gates said.<\/p>\n
He added that any breakup of his company would be "anti-
\nconsumer," and that it would be "a very inappropriate thing, even
\ngiven the government's unfortunate theory that innovation should
\nbe regulated."<\/p>\n
The government's proposed remedies are due to be filed in
\ncourt by Friday. Microsoft is then due to respond by May 10, but
\ncompany officials have said they may ask for more time,
\nespecially if the government's proposal includes a breakup plan.<\/p>\n
News of a possible breakup contributed to a 16 percent plunge
\nin Microsoft shares on Monday. Investors also were disheartened
\nby a mediocre earnings report last Thursday and resulting stock
\ndowngrades by analysts at SG Cowen Securities Corp. and the
\nGoldman Sachs Group.<\/p>\n
Microsoft shares were up US$1.75, or 3 percent, at $68.37 1\/2
\nin late trading on the Nasdaq Stock Market.<\/p>\n
In response to the recent dive in Microsoft's share price, the
\ncompany told its employees on Tuesday that they would receive
\nadditional stock options to help compensate for the market's
\nactivity.<\/p>",
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