[Gene Randall, Cnn Anchor:] The federal judge in the Microsoft antitrust case has set a hearing for May 24th. The company wants a six-month delay to prepare its case against a breakup. More from CNN's Greg LeFevre in Redmond, Washington.
[Greg Lefevre, Cnn Correspondent:] Microsoft's first response was to ask the court throw out the Justice Department's demands to break up the software giant. Microsoft does offer to separate its Internet Explorer browser from the Windows operating system. At trial it said that could not be done. It would let PC makers customize the screen instead of adhering to strict Windows look, and it would reveal some of the operating system code so competitors could write software to run more smoothly on Windows machines.
[Mark Murray, Microsoft:] We are operating in good faith, and we're putting forward our best recommendation to the court on how to address the specific violations that the court raised, even though we disagree with those.
[Lefevre:] In a statement, the Justice Department scoffed at Microsoft's proposal, calling it "ineffective" and "full of loopholes." For example, Justice says Microsoft would still be able to retaliate against PC manufacturers and software developers who support non-Microsoft technologies. The case has clearly distracted Microsoft, but it's also cast a pall of uncertainty over an industry that, like it or not, depends on Microsoft to set its direction.
[Tom Boeder, Antitrust Attorney:] It makes it difficult not only for Microsoft but for Microsoft's competitors to settle down, to know where they're going.
[Lefevre:] But the rush to palm units and wireless Internet devices may make the desktop computer less relevant.
[Charles Hill, University Of Washington School Of Business:] The center of gravity in the computer industry is moving rapidly off the desktop, where Microsoft dominates, and on to the Web, where Microsoft does not have a dominant position.
[Lefevre:] Some contrarians quietly say a breakup might be good for Microsoft. [on camera]: Being forced to compete in the palm market, the database or the server markets all of which are dominated by their competitors might cause this company to recharge its competitive spirit. And Microsoft might emerge better off for it. Greg LeFevre, CNN, Redmond, Washington.
[Randall:] How might the Microsoft case affect both consumers and the overall economy? For some answers, we turn to Richard Wolffe, correspondent for the "Financial Times" of London. He has covered this case from the very beginning. Are you getting tired of it yet?
[Richard Wolffe, "financial Times":] No, but I'm looking forward to the end of it.
[Randall:] What do you think it will take to convince this federal court judge that the company should not be broken up?
[Wolffe:] Well, Microsoft is trying to say that a breakup will mess up the economy Microsoft has been a driving force behind the new economy and that a breakup will lead to untold damage. Now the judge the judge has got to make a really fine decision about what the impact will be.
[Randall:] Well, given, the judge's findings of antitrust violations against the company and given what the government has asked for, won't it take a very compelling case? And is the company capable of waging that kind of case?
[Wolffe:] So far, no. I mean, to be honest, its case in court has been pretty awful. In spite of all the lawyers it's got, it just hasn't met the standard that the Justice Department has set it. I think really what its best hope is is that on appeal and in possibly the Supreme Court it will find a better judge, a better a more favorable set of judges.
[Randall:] And what do you make of this public relations campaign by Microsoft, ads in newspapers and on TV? Who is that campaigning aimed at?
[Wolffe:] Well, Microsoft is talking to a bigger audience, an audience outside the court and really an audience that might affect the politicians who could ultimately have a say in this case.
[Randall:] Now, does Microsoft have a good point, that this would be detrimental to the interests of the U.S. economy? A breakup?
[Wolffe:] You know, nobody really knows. This case started in 1995, when Microsoft was late seeing the development of the Internet. We don't know what's going to happen to technology in 10, 20 years' time. And, frankly, if you look at the history of breakups, it takes that long to get them through. So the truth is we don't know.
[Randall:] And here is something we touched upon when you were here last, and that is the potential that Microsoft could be broken up and that some point along the way you have two huge monopolies.
[Wolffe:] That's absolutely true. You know, the truth is the breakup will totally disrupt this industry. It will open up new possibilities and new risks.
[Randall:] And what do consumers have to look forward to at this point, or is it all a state of uncertainty for all parties involved?
[Wolffe:] It's a state of uncertainty, that's true. But one of the interest things about this case is that Microsoft is already changing its behavior. One of its concession this week was that when you buy a computer you'll be able to see a different thing, whether it's an IBM, a Dell or a Compaq. At the moment, they all look the same. Maybe in the future we're going to see computers that actually look different.
[Randall:] And finally, Richard, do you see a brain drain from Redmond, Washington, given the state of uncertainty surrounding the company?
[Wolffe:] You know, that's quite possible. But Microsoft is already seeing some of that, because people are getting tempted by these great new dot.coms that are starting up. So, that's already happening to some extent.
[Randall:] Richard Wolffe, thanks very much. Thanks for coming in.
[Wolffe:] Thank you.