Microsoft's reputation will be the first casualty

The advice follows US District Court Judge Thomas Penfield Jackson's ruling today that Microsoft violated federal antitrust laws.

Microsoft's effort "succeeded in preventing, for several years, and perhaps permanently, Navigator and Java from fulfilling their potential to open the market for Intel-compatible PC operating systems to competition on the merits", Jackson found.

Microsoft issued a statement immediately, saying the company will appeal the court's ruling.

McCabe said that the ruling against Microsoft would mean "not a lot for consumers and business buyers at the moment". He said it was unlikely any changes at all would occur in Microsoft's product line in the short term. However, McCabe expects the ruling will stifle Microsoft's ongoing development of its products -- an effect that may not be noticed by the developer's customers for up to a year.

If Microsoft were split into three "separate" companies, it would still enjoy the financial muscle of the combined companies, McCabe hypothesised. However, he proposed that the software giant would be less able to utilise the monopoly of its existing products to boost its market share of other, unrelated developments, as a result of the ruling.

Additionally, McCabe said a noticeable consequence of the ruling would be a "relaxation" in the behemoth's pricing of its products, which he said had become more and more "restrictive".

He expects Microsoft will use its seemingly unlimited wealth to "drag this thing on" for some time to come. In the mean time, the company will not be obliged to alter its business practices, he said.

The most pronounced effect of the court's ruling on Microsoft will be on the company's reputation. "It's done nothing for Microsoft's reputation," he said, dismissing the company's courtroom tactics as "arrogant" and "dishonest". For example, he cited one incident late last year, when a Microsoft official delivered a presentation to the courtroom designed to highlight the incompetencies of competitors' software products. The presentation was later found to be fake.

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Byron Kaye

PC World
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