Monday, January 18, 2010

Microsoft: Better Off Split Up?

Nearly 10 years ago, on April 3, 2000, U.S. District Court Judge Thomas Penfield Jackson ordered that Microsoft be broken up into two companies -- one to develop and sell operating systems, and the other to develop and sell other types of software.

Ten years on, Microsoft is struggling to maintain its dominance in a world in which Google thrives, Apple is resurgent, and the Internet has arguably become more important than operating systems. Where would Microsoft be today if it had been split in two a decade ago? There's no way to know, of course, but I think there's a reasonable chance that the two resulting companies would have thrived and been better able to fend off Google, Apple and other competitors.

Why would two Microsofts be better off today than one? The primary reason is that a split might have altered the corporate culture and led to different business and investment decisions. In 2000, Microsoft had no serious competition, either in operating systems or productivity suites. Both Windows and Microsoft Office were virtual monopolies. The company was a money machine with no serious challengers in sight [read more]

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