Gates: MS won't be broken

Microsoft Corp. chairman Bill Gates said in an interview aired on Friday he does not expect the government's landmark antitrust suit against his company to lead to its breakup.

"It's not something that would make sense, it's not anything that we expect to have happen and we think it's reckless that that's being discussed by the government," Gates told NBC's "Today Show."

The interview was taped on Thursday just after Gates had handed over the company's reins to his No. 2, Steve Ballmer, who will become chief executive officer. Gates will remain chairman of the world's largest software maker, which he co-founded in 1975.

He said the management change was unrelated to ongoing negotiations with the government over the antitrust case. The government favours breaking up Microsoft, people familiar with the talks in Chicago have said. "There are settlement talks going on and we would love to settle the case," Gates said. "But it's not related to the management change we have made."

"We feel confident that either through settlement or through the legal process Microsoft will be allowed to continue to help consumers the way we have been."

At a news conference in Washington late Thursday where Gates introduced Ballmer as the new CEO, Ballmer said, "I think it would be absolutely reckless and irresponsible for anyone to try to break up this company."

Asked about the recent mega-merger between Internet and media giants America Online and Time Warner, Gates said it had come as a surprise. "Well, I didn't predict it," he said. "I can understand why they did it. It's an absolutely gigantic company, it's a fierce competitor of Microsoft in many, many areas."

Some industry observers have suggested that the creation of a powerful rival to Microsoft may weaken the arguments for reining in the dominant software maker, which a federal judge late last year found to be a monopoly.

Gates noted Microsoft was pursuing a different strategy in the new media landscape, focused on software rather than content. "We're not sitting around thinking 'Jeez, can we buy an entertainment company?' We'd rather partner up with all the creative entertainment companies and they can have our software and use that for the ideas they are creating."