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White House gets peek of proposed Microsoft breakup plan

Justice Department antitrust officials present the White House with their proposed plan to divide the software giant into two entities in hopes of sparking competition in the industry.

Justice Department officials today briefed members of the White House economic team and counsel's office on their proposed plan to divide Microsoft into two companies in hopes of sparking competition in the software industry.

Assistant Attorney General Joel Klein and other Justice staff were present at the briefing.

"The meeting was essentially an opportunity for the White House to hear from the Department of Justice on the status of the case (and) proposed remedy and the reasoning behind the remedy proposal," said White House spokesman Jake Sievert. "It was strictly informational."

The briefing lasted less than two hours. Neither President Bill Clinton nor Vice President Al Gore attended the briefing, the spokesman said.

The Justice Department is seeking to break Microsoft into two separate companies, according to reports published yesterday. One company would develop, market and sell the Windows operating system, while the other would control Microsoft's hugely popular Office software, including its Word, Excel and Outlook applications.

see special coverage: The verdict is in Despite word of possible breakup plans and a recent slide in its shares, Microsoft says it can face the challenges ahead. In a letter sent to employees today putting the company's outlook within the industry in perspective, chief executive Steve Ballmer restated his confidence in keeping Microsoft whole, according to a Microsoft representative.

"This company, which has done so many great things for consumers and the American economy over the last 25 years, will not be broken up," Ballmer wrote. "No matter what the newspaper headlines say, absolutely nothing in the current case justifies breaking us up."

Ballmer added that he and Microsoft chairman Bill Gates remain confident about their legal position in the ongoing case.

"Even if the judge were to agree to such an extreme and unprecedented action, the legal process has many more steps remaining, including the appeals court (and) the U.S. supreme court if necessary," Ballmer wrote.

The federal government and the 19 states that were part of the suit against Microsoft will be presenting proposed remedies later this week to U.S. District Judge Thomas Penfield Jackson. Jackson ruled in early April that Microsoft abused its monopoly with its dominant Windows operating system.