Microsoft competitors delight at verdict

At least two of Microsoft's toughest competitors are praising Monday's federal court ruling which found that the software giant violated US antitrust laws by unlawfully tying its web browser to its operating system.

"The decision confirms what almost everybody in the world knows: Microsoft is a monopoly that has acted illegally," said Scott McNealy, chief executive of Sun Microsystems. "The Department of Justice and the US states [that brought lawsuits against the company] deserve immense credit for putting together a case that clearly showed Microsoft's true colours."

McNealy, who testified against Microsoft at a US congressional hearing on competition in the software industry, said the harshest of penalties should be applied.

Jim Barksdale, former chief executive of Netscape, the manufacturer of the web browser at the heart of the antitrust case, expressed delight at Judge Thomas Penfield Jackson's ruling.

Barksdale said Microsoft should be broken up to release the company's "stranglehold" and restore competition. "Consumers will benefit through lower prices and better products," he said.

Linux companies were generally happy about the verdict. Matthew Szulik, chief executive of Red Hat, said the verdict will sow seeds of doubt among software companies and ISPs which believe that Windows is the only operating system they need to or could support. However, Ransom Love, chief executive of Caldera Systems, said he would not like to see more direct involvement in the industry by the US government.

Often critical of Microsoft, Oracle was more guarded. "We hope that the remedies ultimately imposed or agreed upon will be commensurate with the seriousness of the violation of antitrust laws which have now been determined by the court," said Dan Cooperman, senior vice president and general counsel for Oracle.

Apple, IBM and Dell declined to comment.

Microsoft, whose shares fell by 17 per cent yesterday, is retaining support from analysts who say that the company's stock will not be crippled by the ruling.

Analysts PaineWebber and Credit Suisse First Boston both recommend buying Microsoft shares. The shares, which have dropped 24 per cent so far this year, fell by 2 15/16 to 88 9/16 in Nasdaq trading on Tuesday. The two-day drop slashed Microsoft's market value by more than $70bn and erased $9.3bn from chairman Bill Gates' personal fortune.