Report: U.S. government seeks to break up Microsoft!

According to a report Wednesday in USA Today, the United States government and 19 U.S. states will seek to break up Microsoft Corporation into two smaller companies should it win its antitrust case against the software giant. And such a victory is virtually guaranteed unless Microsoft reaches a settlement, given the harsh language of the findings of fact, which were issued last November. Judge Thomas Penfield Jackson, who is overseeing the case, will deliver his conclusions of law in February.

The U.S. government and various states had been at odds regarding the eventual punishment of Microsoft ever since they combined forces to bring the monopolist to justice. However, according to the USA Today report, a consensus has finally been reached and the current plan is to split Microsoft into two companies, one that sells its Windows operating system and one that would sell applications software. Windows is installed on well over 90% of all personal computers sold and in operation today.

Though Microsoft says it is open to a settlement, the company isn't interested in being split up.

"\[A breakup\] would do great harm to the industry," said Microsoft spokesperson Mike Murray.

Late Wednesday, the U.S. Department of Justice (DOJ) publicly commented on the USA Today story, which it described as "inaccurate in several respects." USA Today then announced that it stands by the story, however. Microsoft shares fell almost 4 to 105 13/16 as rumors swirled about breakups and settlement talks; Microsoft lawyers also met today in Chicago with the mediator in its antitrust case.

Oddly enough, AOL's purchase of Time Warner this week makes Microsoft's position in its antitrust trial more positive: Microsoft argued that its domination of the computer industry was under constant attack and that it could fall by the wayside at any time should its competitors come together in a convincing way. With the AOL/Time Warner deal, that may have just happened

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