Reactions on Microsoft Decision Vary Greatly

"I think they should impeach Judge Jackson," said John Puricelli, an analyst at A.G. Edwards & Sons.
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The reactions of software industry players and Wall Street analysts varied greatly late Monday after Judge Thomas Penfield Jackson

ruled that

Microsoft

(MSFT) - Get Report

had violated U.S. antitrust law.

"I think they should impeach Judge Jackson," said John Puricelli, an analyst at

A.G. Edwards & Sons

. "He was way off base. It also says to me that his remedy will be very draconian."

He added: "If Microsoft really monopolized the market, how was

Netscape

capable of getting out 165 million copies (of its software)? If that's a monopoly, I'd hate to see what his idea of competition is." A.G. Edwards & Sons rates Microsoft an accumulate, the equivalent of a buy, and has not done any underwriting for the company.

But Ken Wasch, president of the industry trade group

Software and Information Industry Association

, said the decision represented a victory for consumers as well as for the industry.

"It's a slam dunk for the

Department of Justice

, the states and ultimately for consumers of computer products," Wasch said. "Clearly, this paves the way for strong conduct or structural remedies."

Oracle

(ORCL) - Get Report

, a software competitor, also applauded the judge's decision.

"We hope that the remedies ultimately imposed or agreed upon will be commensurate with the seriousness of the violation of antitrust law which have now been determined by the court," said Dan Cooperman, senior vice president, general counsel and secretary of Oracle.

Yet some analysts said that they now expected the judge to impose archaic structural remedies based on his harsh judgment. They also noted that Microsoft is now likely to be the target of a host of civil lawsuits from competitors and consumers.

"The Department of Justice and Microsoft came close to a solution," said James Lucier, a legal and regulatory issues analyst for

Prudential Securities

. "But there are more than 100 lawsuits in about two dozen states. It came down to a decision by the state attorneys general to avoid a settlement if possible.

"The big question for investors is how significant are the state lawsuits," he said. "Are they a low-level nuisance or major distraction, are they costly or do they involve much risk? We don't know yet; we need to watch this carefully." Lucier's firm rates Microsoft a strong buy and has not done any underwriting for the company.

A downloaded copy of the conclusions of law in

U.S. v. Microsoft

is available at the

Government Printing Office

Web site at

http://usvms.gpo.gov. The report is available in Adobe PDF and HTML formats only.

See our

index page for a full roundup of Microsoft antitrust coverage.

Check out the Microsoft saga in the

Microsoft Trial Timeline.

Tim Buckley, chief operating officer of

Red Hat

(RHAT)

, which produces a competing "open source code" operating system in

Linux

, said that the judge's decision will likely have minimal impact on the Durham, N.C.-based company.

"Fundamentally, it doesn't really have an impact on our business," he said. "We think the market is already saying 'we want a choice.'" Buckley added that Linux has captured 25% of the marketplace sooner than it expected.