Microsoft Investors Worry About `Conduct Remedies'
In Wall Street's leading corporate drama, it's not the opening act that worries investors. It's the encore.</br></br>What investors fear most these days about Microsoft's antitrust case isn't so much an AT&T-style breakup, but rather "conduct remedies" that could hobble Microsoft much as International Business Machines was legally hamstrung in the 1970s and 1980s.</br></br>Investors and analysts still expect Judge Thomas Penfield Jackson to endorse the government's proposal to break Microsoft into two: one company focusing on computer operating systems, the other on application and Internet software. Even if the ruling isn't overturned on appeal, it might not be so bad in and of itself, some investors say.</br></br>"What if, 18 months ago, Bill Gates said: `We're getting too big, we're gonna split into three companies,'" muses Charles Carlson, manager of the $145 million Strong Dow 30 Value Fund, which has a stake in Microsoft. If a breakup had been proposed in that way, Mr. Carlson says: "The stock would have gone up 50%."</br></br>Well, it didn't. And now, investors increasingly are worrying about the lessobvious conduct remedies, which have been proposed and are expected to be included in Judge Jackson's ruling. As in: new rules governing Microsoft's relations with computer makers, Windows pricing and the disclosure of computer source code. These rules are designed to restrain Microsoft from abusing its monopoly in the software business and would expire in three years if Microsoft were broken upor 10 years if it isn't.