Report: Prosecutors Propose Microsoft Breakup Plan

Prosecutors attempting to decide the fate of Microsoft Corp. (Nasdaq:MSFT) following a court finding that the software giant constitutes a monopoly, reportedly have suggested a break-up of the company into at least two separate components.

According to a report in USA Today this morning, government lawyers, who have so-far been divided on how to punish Microsoft for alleged anti-competitive behavior, appear to have reached a consensus that would propose a splitting of the software titan into two separate companies, one for the Windows operating system, which runs 90 percent of the world’s PCs, and another for software such as word processing.

The report added that it was unclear whether the government would propose that Microsoft’s Internet sites form a third company, or be folded into one of the other two.

Microsoft, which has said it is open to a settlement, probably would resist any break-up, the report stated, and quoted Microsoft spokesman Mark Murray as saying a break-up of the company “would do great harm to the industry.”

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