Gates welcomes 'victorious' Microsoft verdict

Microsoft boss Bill Gates has hailed a court ruling that the software giant should not be broken up as a victory for his company.

But he warned the case against the US company which produces Windows and whose operating system is used on 80% of computers worldwide was not yet over.

Microsoft won an appeal against an original ruling by a US court that it should be broken up because it abused its power as a monopoly to bully computer manufacturers into using its products.

But the court ruled it had abused its power by forcing other computer companies into using its Internet Explorer to access the web and to put its operating system in their PCs.

Microsoft is scheduled to release its new XP version of Windows later this year, take on video games giants Sony and Nintendo with the X-box, and produce a so-called tablet computer to compete with Psion and Palm computers.

"Today's decision is critical to our ability to go forward with these new products," said Mr Gates.

"I am incredibly optimistic about the future. These advances are only possibly because companies have the freedom to keep innovating."

But there was a note of caution from Mr Gates, who said the ruling was being studied in its entirety and was not the end of the issue.

Microsoft lawyers and the US Department of Justice, which had taken the case to the courts, may try to negotiate an end to the case, or there may be further appeals. Some of the technical issues in the case were sent back to a lower court to be dealt with.

US attorney-general John Ashcroft, who will have to make the ultimate decision as to whether or not to negotiate a settlement, refused to be drawn on what future action was likely.