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Microsoft Foes Cheer Ruling,
But Immediate Impact Unclear

By Bruce Meyerson   Associated Press
NEW YORK — While rivals felt vindicated by a ruling that Microsoft broke federal laws by using monopoly powers to crush competition, many said it will take stringent penalties to loosen the software maker's grip on the industry.

"Microsoft's power is every bit as strong — even greater — than when this case started," said Michael Morris, chief general counsel for Sun Microsystems, following Monday's ruling that Microsoft unlawfully tied its Web browser to the Windows operating system to extend its dominance to the Internet.

Morris said the courts now must come up with "significant remedies to break Microsoft's hold on the browser market."

Sun, one of Microsoft's most bitter foes, maintains that the world's largest software company has long used bullying tactics and programming tricks to keep rival products from running on Windows-based computers.

Another old foe made no attempt to hide his pleasure at a bittersweet victory.

"The judge seems to have agreed pretty conclusively with what we said for four and a half years, that these guys would stop at nothing," said Jim Barksdale, former chief executive of Netscape Communications, whose once-dominant browser was pummeled by Microsoft's tactics.

Barksdale, who left Netscape after it was acquired by America Online to run his own venture capital company, the Barksdale Group, said the ruling was "very gratifying and vindicating for the people who worked so hard at Netscape.

"But I would like to think what it might have been if not for Microsoft breaking the law. Netscape would have been Yahoo! by now. It would have been the largest company in the Internet space," he asserted.

Observers on all sides of the debate agreed that U.S. District Judge Thomas Penfield Jackson's decision still doesn't resolve the uncertainty over how Microsoft might be punished or whether its dominant Windows operating systems might lose market share any time soon.

"It's just one step in the process," said John Thompson, a spokesman for Dell Computer Corp., which has traditionally maintained a close relationship with Microsoft. "It's still several months before you get to anything more, and even longer with the appeals process."

Investors, just as they did in November when Jackson first ruled Microsoft a monopoly, immediately flocked to the shares of companies that make Linux, an increasingly popular operating system that is an alternative to Microsoft's Windows software.

Analysts said it was too early, however, to tell whether the court case would have any tangible benefit for leading Linux players such as Red Hat and Corel.

That won't stop those rivals, though, from using Monday's verdict in arguments to woo potential customers away from the software platform used in 95 percent of the world's personal computers.

"The fear that Microsoft products will become unavailable seems completely unfounded, but I wouldn't at all be surprised to hear that some vendor said, `This could make Microsoft products unavailable, so buy ours,"' said Dan Kusnetzky, an analyst at the research firm IDC

"People who have already made commitments (to Windows) will continue to go down that path," he added. "But for people who are still considering what to do, the fear may be enough to change their minds."

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