Why Didn't Microsoft Corporation Split?

3
Why Didn't Microsoft Corporation Split?
Satya Nadella by n.bhupinder on 2014-07-10 23:09:07

In a further judgment in 2000, the judge declared that Microsoft Corporation (NASDAQ:MSFT) should be split into two halves, with the Windows business cut off from the rest of the company. If Judge Jackson declared war on what he saw as a monopoly, why is the company still in one piece today?

Microsoft’s legal wrangling

First came the remarkable twists and turns in the case. Predictably Microsoft Corporation (NASDAQ:MSFT) appealed the decision, and the D.C. Circuit Court of Appeals rejected Jackson’s ideas, as well as accusing him of unethical conduct. It was revealed that the judge had spoken informally with journalists while the trial was still ongoing.

Exclusive: Lee Ainslie Struggled During The Third Quarter As Tech Holdings Fell

activist short selling Investing investLee Ainslie's Maverick Capital had a difficult third quarter, although many hedge funds did. The quarter ended with the S&P 500's worst month since the beginning of the COVID pandemic. Q3 2021 hedge fund letters, conferences and more Maverick fund returns Maverick USA was down 11.6% for the third quarter, bringing its year-to-date return to Read More

Microsoft and the Department of Justice later settled the case in November 2001, agreeing to allow competitors easier integration with the Windows operating system. Although this was still a bitter blow, it was nowhere near as much of a disaster as a forced breakup of the company.

The situation today

Microsoft’s power has waned with the shift from PC to mobile. Of course Windows is still the dominant force in the PC operating system market, but their decrease in market share has lessened Microsoft’s control over its rivals. The company has found its grip loosening with the arrival of high-speed internet, web-based solutions and cloud computing, which do not require fidelity to one OS.

The increasing popularity of mobile devices has seen a power shift from Microsoft to Apple and Google, who are far more powerful in that sector. It is not just consumer attention that has shifted from Microsoft to its competitors, as Google now finds itself under investigation from regulators in much the same way as Microsoft was back in 2000.

Nowadays regulators are not clamoring for the breakup of Microsoft Corporation (NASDAQ:MSFT), but stockholders and analysts are. A recent spate of corporate spinoffs has increased the pressure on Microsoft to separate its consumer and corporate businesses. So far however, CEO Satya Nadella seems set on maintaining the present structure of the company.

Updated on

Sheeraz is our COO (Chief - Operations), his primary duty is curating and editing of ValueWalk. He is main reason behind the rapid growth of the business. Sheeraz previously ran a taxation firm. He is an expert in technology, he has over 5.5 years of design, development and roll-out experience for SEO and SEM. - Email: sraza(at)valuewalk.com
Previous article Kopernik: What It Sounds Like When Doves At Fed Cry
Next article A Necessary Step for Investing in Italy

No posts to display