Shares of Microsoft rose on Monday as Wall Street painted the
government’s bid to split the software maker into two companies as both
unrealistic and maybe even beneficial for investors in the stock.
In early Nasdaq trading, Microsoft rose to $72.62 1/2 per share, a gain
of $2.88 3/4 from where the stock closed Friday afternoon, before the
Justice Department asked a federal judge to break up the company as
punishment for monopolistic practices.
Under the plan, also recommended by 17 states that filed antitrust
complaints against Microsoft, one of the companies created by the
break-up would produce Windows, the computer operating system whose
dominance was used to smother competition.
The other new company would make popular software applications such as
Microsoft Office and run Microsoft’s Internet operations including the
MSN online service and network of Web sites. Many legal and industry
experts criticized the plan as too severe, unworkable, and unlikely to
pass muster when challenged by Microsoft in appeals court.
Either way, the appeals process and final resolution of the case is
expected to take at least two years and Microsoft may represent an
attractive investment as one or two companies, Wall Street analysts
said. Meanwhile, Microsoft on Sunday launched a media campaign including
TV commercials featuring Chief Executive Steve Ballmer and full-page ads
in many major newspapers, detailing its position and warning of the
impact a break-up would have.
“The dismantling of Microsoft also would send a signal that companies in
America that are ‘too’ successful will be punished harshly — a signal
that will be welcomed by foreign competitors seeking to overtake
America’s global leadership in technology,” the letter said.
