The Great Debate

The United States is plagued by large corporations with outsized political power. They are “too big to fail.” So if they are about to fail, they get rescued. Many are so big that they can block the laws needed to stop them from destroying the economy or the environment.

We need to replace them with smaller companies, but U.S. antitrust law is inadequate. It exists, but has been weakened over the past decades. Consider the proposed “Volcker Rule,” which would make many banks split into two companies, one for risky investments and one for loans based on savings, as the old Glass-Steagall law required.  This would address some problems, but would not make banks small enough.  Eliminating “too big to fail” banks means making sure that each is small enough that regulators, prosecutors and elected officials won’t hesitate to let it suffer the consequences of its own decisions.

Using anti-trust law now to split up a company requires a lawsuit, and many large companies can make that costly – as Microsoft did each time it was convicted. Corporations can also use their political influence to avoid being split, as Microsoft did when last convicted.

It is clear that the larger companies get, the harder it is to enforce antitrust laws against them. Yet, a business-friendly government can vitiate the law simply by launching no antitrust cases – as the Bush administration did.

When the government wins such a suit, the court splits up the company to remedy the specific anti-competitive behavior proved. It can’t split the company into 50 parts just to ensure they are all small enough. We can’t fix the problem of too-big-to-fail companies this way.

If you thought the era of better living through financial engineering died with Lehman Brothers, have a look at Microsoft.

The ubiquitous computer software company has decided to borrow as much as $6 billion at the same time as it is increasing its dividend by 23 percent, despite sitting on a $36.8 billion cash hoard and generating more every day.

It reminds me of the old Saturday Night Live skit about the “Bank of Change,” which existed only to turn dollars into quarters and pennies into dimes. “How do we do it?” their pitchman said, “Volume.”

– Robert X. Cringely has been writing about technology since 1987 and blogging since 1997. His work has appeared, well, everywhere, but can mainly be read at http://www.cringely.com. The views expressed are his own. –

Winning by a technical knock-out (TKO) over Microsoft, Apple this week became, according to Standard & Poors, the second most valuable NASDAQ firm by market cap after Exxon-Mobil (click here for more on S&P’s ranking).  What a difference 13 years makes!  Apple is on a roll and while Microsoft is far from down and out it is clear that the competitive momentum lies these days with Cupertino more than Redmond.

When Steve Jobs assumed the CEO position at Apple on July 9, 1997 Apple shares cost $3.42 and the company had a market cap of around $3 billion. This week Apple shares hit $266 with a market cap of $241 billion — 80 times larger than it was 13 years ago.  Microsoft shares, in contrast, went from $17.67 to $31 in the same time frame — not even a doubling despite more than $80 billion in share buy-backs by the company.

-Matthew Bath is technology editor at Which? The opinions expressed are his own.-

Microsoft’s Windows operating system has been frustrating and delighting computer users in almost equal measure since it was first debuted by the software giant first in 1985. Fast forward through nearly a quarter of a century of powering the majority of the world’s personal computers, and Windows is about to hit another milestone.

Windows 7 launches on October 22, worldwide, and it’s safe to say that, as a firm, Microsoft will be collectively crossing fingers and toes that shoppers flock to the new version.

– Eric Auchard is a Reuters columnist. The opinions expressed are his own –

The fate of Yahoo Inc has become intertwined in the public’s imagination with the success or failure of its dealings with Microsoft Corp in recent years.

That’s despite the fact that as much as 70 percent of the value investors put on Yahoo’s depressed shares are tied up in its international assets or cash holdings — factors that have nothing to do with Microsoft.

LONDON, Aug 3 (Reuters) - The resignation of Google CEO Eric Schmidt from Apple's board should come as no surprise to anyone with an inkling of what corporate governance means.

But then Silicon Valley's idea of corporate boards has long consisted of cozy, interlocking directorships which would be considered collusion in most other industries.

Google's CEO is not leaving Apple's board voluntarily. He is only stepping down in response to the increased government scrutiny of obvious potential conflicts of interest between the two companies.

-Tom Dunmore is Brand Director & Editor-in-Chief at Stuff magazine - Stuff has over 1 million readers worldwide. The opinions expressed are his own.-

Google announced on Wednesday that it was developing its own computer operating system. It will be secure, fast, lightweight and - most of all - free. And it presents the biggest challenge yet to the long-standing dominance of Windows.

The idea behind Google ChromeOS is nothing new - it's built on a Linux foundation and will no doubt share many of the features of other open-source operating systems. But Google is the only computing brand with more might than Microsoft: it's trusted, and has a proven track record of building brilliant, free services, from search to instant messaging.

– Eric Auchard is a Reuters columnist. The opinions expressed are his own –

Microsoft Corp’s new Web search service Bing is a far cry from the general-purpose tool the company must build or buy to compete effectively with rival Google Inc.

Microsoft would do far better helping users find the emails, documents and Web pages that users of Outlook, Office and Internet Explorer rely on every day.

– Leslie Harris is the president and CEO of the Center for Democracy and Technology in Washington, DC. The views expressed are her own. —

In the wake of troubling reports as recently as last year that Western companies were assisting China with Internet censorship and the unmasking of cyber-dissidents, governments around the world seemed poised to regulate the conduct of Internet companies. Lawmakers appear to have stepped back from those efforts, but the challenges of advancing global Internet freedom remain.

The Global Online Freedom Act, drafted in the U.S. Congress, would have made it a crime for Internet companies to turn over personal information to governments in cases where that information could be used to punish dissent. The bill produced a firestorm of controversy. Human rights groups campaigned for swift passage, while the tech industry scrambled to stop the bill, which they viewed as a global eviction order from many difficult but emerging markets. At the same time, several members of the European Parliament proposed a European version of the measure, taking the accompanying controversy global.

– Eric Auchard is a Reuters columnist. The opinions expressed are his own –

Jerry Yang’s elevation to chief executive at Yahoo Inc after a long period of decline at the Web pioneer had the air of a fairy tale where the noble prince grows up and restores his kingdom’s faded glory.

But Yang has worn his leadership like an ill-fitting coat since coming to power last year, appearing reluctant to make the dramatic restructuring moves analysts and investors have long considered vital to get Yahoo to reaccelerate its growth.