Today's statement by a federal judge is the latest legal blow against Microsoft, and if history is a guide, shareholders are likely to put pressure on the stock on Monday. On the other hand, investors have learned that Microsoft is quite resilient, whether it's in battle with a competitor or a team of Justice Department attorneys.
Microsoft's fate is not a trivial consideration: The company has produced several billionaires and countless millionaires, it has the largest market capitalization of any other U.S. company, and it is considered a bellwether for the entire industry.
Analyst Mark Specker of SoundView Technology said two things can happen to Microsoft's stock on Monday.
"Investors will either find it a relief that a decision has been made and then focus on the company's fundamentals, or they will find the news bad enough where there will be no rebound," he said. "I find the new [findings] incrementally bad enough to where I'm concerned."
He added, "It looks like the very bad thing that could happen in the case did, and there may be some risk where Microsoft won't be able to run its business like it wants to."
Specker noted, however, that Microsoft shares are broadly held, and he doesn't foresee a lot of institutional investors dumping their shares, meaning the damage will be limited.
Microsoft chief financial officer Greg Maffei downplayed the potential impact on Microsoft earnings today.
"We've been in a situation for several years where the dealings with the DOJ and the lawsuit have been going on. I don't think there's anything new about this information--all of it's public, and our disclosures have acknowledged the litigation. We don't consider it a radical change."
Shares of the software giant fell slightly in May of last year when the Justice Department and 20 state attorneys general filed their historic antitrust suit against the software giant.
And when the federal trial began a year ago October 19, the shares again retreated slightly.
The pattern held true today. Microsoft shares closed at 91.56 on the Nasdaq during regular trading. The court decision was issued after the markets had closed. In after-hours trading the shares fell to 87.06, according to Instinet.
Meanwhile, on the day the trial began, Morgan Stanley Dean Witter analyst Mary Meeker stated in a report that she did not believe the trial would have "a material impact on Microsoft's ongoing earnings potential."
Although it's impossible to say exactly how Microsoft shareholders will fare in the short or long term, it's clear that until now there have been few better places to invest. For example, $10,000 invested in Microsoft stock in December 1986 would be worth some $2.7 million today.
Some of the other numbers associated with Microsoft's success are just as staggering.
The company went public in March 1986, selling 2.8 million shares for $21. Accounting for numerous stock splits, those shares sold for the equivalent of about 15 cents.
In the 13 years since then, the company's market capitalization has soared to $472 billion, making it the most valuable company in the country.
The most visible beneficiary of Microsoft's rise has been chairman and cofounder Bill Gates. According to a recent ranking by Forbes, Gates is worth $85 billion. As the magazine put it: Gates's fortune increased by $25 billion in the past year--or about $3 million per hour.
Gates is not alone in enjoying the fruits of the company's success. No. 2 on the Forbes list at $40 billion was Microsoft cofounder Paul Allen. Steve Ballmer, the company's president, was ranked No. 4 with $23 billion.
And those are just the big names--Microsoft has created several other billionaires and countless millionaires.
Some observers warned today that Jackson's decision could have a chain reaction. Among them was the U.S. Chamber of Commerce, which cautioned: "No high-tech company should cheer these findings because they could easily become the target of government's mad rush to regulate our most promising industry."
News.com's Lara Wright contributed to this report.