Saturday, November 6, 1999 Published at 01:47 GMT
Business: The Company File
How much will it hurt Microsoft?
Consumers may benefit from added competition and innovation
The news that Microsoft has been ruled a monopoly has sent tremors through the US computer industry.
Microsoft is by far the largest computer company in the world, with a market capitalisation of $470bn, and sales of $20bn a year.
Many of its competitors are also suppliers or users of its products.
But after the dust has settled, how much of an effect will the judge's preliminary ruling have on its business?
Surprisingly little, if Microsoft and the US Government reach an out-of -court settlement, still the most likely outcome, according to many analysts.
The judgement may also take years be finalised, with an appeal process of at least two years.
Microsoft will continue to maintain its dominance in personal computer operating systems, rolling out the new Windows 2000 system in the next few months.
The judge deliberately timed his ruling to minimise the impact on the stock market, making his announcement after most US markets had closed for the weekend.
Nevertheless shares in Microsoft fell by nearly $3 a share to $88 5/16, wiping more than $15bn off the value of the company.
He pointed out that Microsoft, the largest company on the Nasdaq index of high-tech companies, had not benefited from the recent rally that has led to six straight record highs.
Shares in Microsoft competitors like Sun Microsystems and Oracle are likely to be the main beneficiaries of the ruling.
Other companies were guardedly optimistic that by taming the industry giant, more space for innovation would be created.
In the longer term, the most important result of the case may not be the damage it does to Microsoft.
Rather, it may be the boost to competition and development in the rest of the software industry.
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