Unnamed Sources Battle in Microsoft Breakup Story

Everyone in the media agrees: The Department of Justice will "demand," or at least "propose" a Microsoft Corp. breakup. But while the story was all over the press, the details were strangely hazy, based almost exclusively on unnamed sources and on the unnamed sources of other news organizations.

Speculation began with a USA Today story Wednesday entitled "Prosecutors favor Microsoft breakup." In it, reporter Paul Davidson wrote, "Government lawyers, long divided on how to punish Microsoft for anticompetitive behavior, appear to have reached a consensus approach that would propose a breakup of the software colossus. Under the proposal favored by prosecutors, Microsoft would be split into separate companies: one for its Windows operating system, which runs 90 percent of PCs, and another for software such as word processing, people familiar with the matter said Tuesday." It was unclear, the story said, whether the government would ask that Microsoft's Internet properties form a third company or be included in one of the other two.

However, even USA Today's Web site ran a statement from the Department of Justice, saying that the article was "inaccurate in several respects" and "does not accurately reflect our views." In other stories, "people close to the case" cast doubt on USA Today's story - but since no one was named, it was nearly impossible to figure out which reports to believe. AP took USA Today to task for its math. The wire service claimed that government lawyers want to see Gates & Co. split into three, not two, businesses. But AP offered no details on how the breakup would play out. Neither did MSNBC, whose "sources" backed the three-way breakup. MSNBC's Brock Meeks reported that sources told him that USA Today's plan "isn't given much credence" because it would leave Microsoft in control of its monopoly product, the Windows operating system. The story said that a "Baby Bills" approach to a breakup, splitting the company into several "separate-but-equal entities," was most likely. This scenario, too, came courtesy of unnamed sources.

Yet a third approach to a breakup was suggested by the Washington Post's page-one play - one that would combine the plans reported in USA Today and MSNBC. That plan, which the Post's David Segal and Rajiv Chandrasekaran reported that "several antitrust experts believe Justice favors," would split the applications and operating-system sides of Microsoft and then divide the operating-system unit itself into two competing companies. Interesting - and all the more credible because the Post doesn't claim it's anything more than speculation.

As for who knows what, the Wall Street Journal's entry in the sources-say derby gives a clue as to why the details remain murky. "Sources" told the paper that as the talks enter their fifth round, the sides not only haven't come to the table together in Chicago, they haven't even both been in the Windy City on the same day.

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