The case for breaking up Microsoft

John Battelle, author of the book, "The Search", yesterday wrote a rant begging "Please, Give me LiveSoft (Or...Please Split Up Microsoft!)". His observation: Microsoft's potential for success is being weighed down by "so many stories of brilliant mediocrity." And he has a solution:

Now, I know it's Gates' job to make the world of tech seem approachable and understandable to the typical MS Office user - the same person who apparently has a dinosaur for a head and stopped paying attention to technology somewhere back in 1997. But g'damn, we've been hearing this speech for more than ten years now, and if Microsoft ever wants to get back out in front of the pack in technology, if it really wants to lead again, as it did in the mid 1990s, it needs to do one simple thing: Split the company up.

I recommended a similar solution seven years ago, and claimed that breakup was literally the only way the company would unlock the value inside it. Instead, the firm has fought a long and protracted war against many major governments to leave things the way they are. But as Mini-microsoft is wont to point out, Microsoft's current size and employment practices are a barrier to innovation, not an asset. And does anyone really believe that XBox game sales get any benefit from synergies with Microsoft Office? Or Hotmail (apologies, Live Mail) gets any benefit from Windows integration since it has to work with all platforms. Give it up guys.

I predict that if Microsoft ever announced that it is breaking itself up, the broken up pieces would be worth 50 percent more than the original Microsoft within a year (heck it might happen in a space of a week!). And this is for a stock that has not moved in more than five years. The only question is why they don't have the corporate will to do it.

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