The New York Times Microsoft Management Tells Workers There Will Be No Breakup
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"As some industry executives declared that a government move to break up Microsoft could inject new competition into the software business, Microsoft's top management confidently assured its 34,000 employees on Tuesday that there is no chance the company will be split up."

"And to further calm any anxious workers, Microsoft told them they would all receive new stock options to shield them financially from the recent slide in the company's stock price."

""This company, which has done so many great things for consumers and for the American economy over the last 25 years, will not be broken up," Ballmer said."

Dan Gillmor Microsoft's Ballmer won't consider possibility of breakup
"IT had been a long couple of days for Steve Ballmer, chief executive of Microsoft Corp., when we met for dinner Tuesday evening. The company's stock price was down more than 12 percent in the wake of a disappointing sales outlook and weekend news reports that government antitrust enforcers want to break up the company.

Ballmer had been up late Monday night working on company business, including a rally-the-troops memorandum to the company's employees. On Tuesday, he and his management team handed out several billion dollars worth of new options to the employees.

At a small Italian restaurant a few miles from the Microsoft campus, I pulled a newspaper from my travel bag and pointed to the front page. A chart showed how much revenue comes from Microsoft's operating systems business as opposed to applications software and other units.

So, I asked Ballmer with a smile, which one of those companies do you want to run after the breakup?"

"Along with the standard-issue defense of Microsoft's ethics and business practices, topics on which we have long agreed to disagree, Ballmer offered what he plainly believed was a compelling reason not to do anything so drastic as a breakup. Simply put, the technology users of the world need Microsoft, because it takes a company of this size, talent, direction, patience and deep pockets to solve some kinds of problems and invent some kinds of products.

"Big, complicated innovation is very hard to do,'' he said. In developing Windows over the years, Microsoft has needed its multifaceted perspectives -- from the view of users, developers and others -- and its deep talent pool. The PC industry coalesced and grew around Microsoft's Windows standard, he said, and people need to remember that."

Wired Breakup Good for MS?
"But while Microsoft laments, a number of antitrust experts and business analysts are arguing that a breakup could well be a good thing for Microsoft, its shareholders, and consumers. Or, at least, a better thing than a consent decree in which Microsoft agrees to curb its suspect behavior, generally considered a lighter punishment.

The thinking goes like this: If Microsoft and the government enter into a consent decree, the DOJ will have to scrutinize Microsoft's every move for years to come, micro-managing the company's business strategy at every turn. The government will essentially be in the software business -- the greatest fear of Microsoft's supporters.

If the company is broken up, however, the new units can forge ahead on their own, relatively free from federal handlers.

"Essentially, Judge Jackson would be in the shorts of Microsoft for as long as the consent decree exists," said Glenn Manishin, an antitrust attorney at Patton Boggs in Washington, and a vocal proponent of a Microsoft breakup. "If they break up the company, however, the court rules, then walks away.""