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To: Glenn D. Rudolph who wrote (102410)	4/29/2000 1:14:00 PM
From: H James Morris	Read Replies (3) \| Respond to of 164684

Glenn, Off topic. As you probably saw my earlier posts...I mentioned I hedged my Msft shares and so far I'm glad I did. But I see a great opportunity in owning two great companies now. Its too bad that only the current shareholders and not Gates or Ballmer will get that gift. If you where one of those guys which of the two would you take? >Under the government plan, Mr. Gates and his board of directors would have to create a proposal for implementing the split. Mr. Gates and other officials would receive stock in only one of the new companies, while ordinary shareholders would get stock in both. Microsoft has until May 10 to respond to the government's proposal, but Bill Neukom, the company's general counsel, said Microsoft will ask for a major extension of its deadline. "A proper response to this ruling will require months and months of discovery and evidentiary hearings," he said. Judge Jackson had set a hearing for May 24, with a ruling expected by summer or fall. Experts Ask for More Extreme Measure In a separate document filed with the court Thursday, a group of prominent antitrust experts urged Judge Jackson to order a more extreme measure -- to "clone the operating systems into three companies." The government's proposal "is a move in the right direction, but doesn't go far enough," said the brief's chief author, Robert Litan, a former Justice Department official who negotiated with Microsoft in a related 1994 case and now works for the Brookings Institution. Other authors of the report, which wasn't commissioned by either side, are Roger Noll, an economist at Stanford University; William D. Nordhaus, a Yale University economist; and Frederic Scherer, an economist at Harvard University's John F. Kennedy School of Government. In addition to the government's lawsuit, Microsoft faces more than 100 private antitrust lawsuits. On Tuesday, a panel of federal judges consolidated 27 of them in a single court in Baltimore. U.S. District Judge J. Frederick Motz will coordinate pretrial activities for the 27 claims, which were filed in 17 federal jurisdictions. The private claims echo the antitrust charges detailed in the federal antitrust lawsuit but carry the potential for triple damages against Microsoft. Would Shareholders Be Winners? While the government's bid would break up one of the most powerful engines of profit in economic history, some government officials and analysts believe that under the proposal, Microsoft's shareholders could end up big winners as the changes reverberate across the new economy. Microsoft investors own one of the world's most widely held stocks, but it has lost more than a third of its value in four months. After a spin-off of the Office-based applications company from the core Windows company, Microsoft shareholders would end up with shares of two rich and powerful companies instead of one. Microsoft officials believe that better is yet to come in the antitrust case, which was filed in U.S. District Court in Washington, D.C., two years ago. After remedy proceedings, Microsoft will ask for a review by a federal appeals court, where it already prevailed against Judge Jackson earlier in the case. But the judge also has said he may seek immediate Supreme Court review, which is highly unusual but permitted in antitrust cases of broad public importance.