What Really Matters in the Microsoft Case by Steve Ballmer

Since Federal District Judge Thomas Penfield Jackson issued his ruling in the Microsoft antitrust case on Monday, a lot of people have asked me about the decision and what it means for Microsoft's future.

I tell them three things. First, that I couldn't be more proud of what Microsoft has done for consumers over the last 25 years. Second, that I remain incredibly enthusiastic about Microsoft's people, values, vision and technology as we look to the future. And third, that this week's ruling is one step in a continuing legal process.

For more than two decades, Microsoft has worked ceaselessly, and successfully, to bring the benefits of the personal computer and the Internet to hundreds of millions of consumers and businesses around the world. Our commitment and dedication to creating a standardized Windows computer operating system, with innovative features like a user-friendly graphical interface and Internet support, has quite literally spawned the creation of tens of thousands of other technology companies, which in turn has created millions of new jobs, ignited the American economy and made the United States the global leader in high-technology.

Microsoft recognizes that industry leadership brings both opportunities and responsibilities. That's why we did absolutely everything possible over the past four months to try and resolve this case without the need for further litigation. We have always believed that a fair and reasonable settlement is in the best interests of consumers, our shareholders, our employees and the American economy. But in the end, extreme government demands which went far beyond the issues raised in the lawsuit, and deep divisions between the Department of Justice and the 19 plaintiff states, made settlement impossible.

While we remain open to any possibilities to resolve this case without further litigation, we also believe we have a strong case on appeal. A 1998 U.S. Court of Appeals ruling affirmed Microsoft's right to build Internet capabilities into Windows to benefit consumers; a decision that flatly rejected an earlier ruling by Judge Jackson. In Monday's ruling, Judge Jackson noted the higher court's decision, but declined to follow that guidance.

It is also important to note that in his decision, Judge Jackson ruled that Microsoft did not interfere with the ability of Netscape -- our competitor in the Internet browser market -- to distribute its Navigator browser. As the judge said in his ruling, Microsoft did nothing to deprive Netscape of the ability "to have access to every PC user worldwide to offer an opportunity to install Navigator. Netscape was able to distribute 160 million copies of Navigator, contributing to an increase in its installed base from 15 million in 1996 to 33 million in December 1998."

As we look ahead to the appeals process, innovation will continue to be the top priority at Microsoft, as it has been for the last quarter century. I say this because I know that our future success depends on our ability to stay at the cutting edge in a high-tech industry that continues to change dramatically, with amazing new technologies and record-breaking mergers reshaping the competitive landscape all the time.

Despite the dramatic newspaper headlines of recent days, my optimism about the future of Microsoft is undiminished. Microsoft has worked hard to create incredibly powerful and popular software technology that has positively impacted people's lives. I couldn't be more proud of the 33,000 people I work with at Microsoft; people who are, at once, independent-minded and entrepreneurial in character, yet who share a set of core values -- integrity, innovation, customer focus and partnership -- that define the essence of what Microsoft is and how it conducts its business every single day.

As this industry continues to evolve, we will stay 100 percent focused on the challenges ahead: creating compelling new products and services which benefit consumers in the Internet era.

Ballmer is president and chief executive officer of the Microsoft Corporation.