Microsoft lost on every hard question; they won on every easy question. The court has found them liable for monopoly maintenance. That's the essence of the government's case. The court has also found that it did not decide in 1998 that tying software would be decided under a different standard. That was the essence of Microsoft's defense. The court has crafted a smart and innovative rule about the special problem of tying software. But even if Microsoft won in the application of that rule on remand, the core of the case is that Microsoft has lost. They violated the antitrust laws, and the real issue is now remedy.

Richard McKenzie, author of "Trust on Trial: How the Microsoft Case is Reframing the Rules of Competition":

On the one hand, Microsoft might be able to celebrate because the court's eliminated the threat of a breakup, at least immediately. But there are a lot of things in there that look like bad news. I'm keeping list of points for Microsoft and against, and right now -- I'm only on Page 60 -- the list against is far longer than the list for.

The main problem, it seems, is that the court has affirmed that Microsoft is a monopoly and has stood ready to use its monopoly power to squash its competitors. This represents a threat to Microsoft because of the private lawsuits. They'll come looking for damages, and Microsoft will spend all of its time in court.

The best part for Microsoft is [Judge Jackson's] comments. That seems to be the main reason that they set aside the remedy. They don't seem to have set it aside because they believe it was undeserved. Rather, it was the comments of the judge and because he failed to give them a hearing.

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Stephen Margolis, author (with Stanley J. Liebowitz) of "Winners, Losers & Microsoft: Competition and Antitrust in High Technology" and professor of economics at North Carolina State University:

The court reaffirms its previous position that if the tying [between the operating system and the browser] offers a plausible benefit to consumers of combining the two goods that can't be achieved by offering them separately, then the technical tie does not violate the law.

I think that the liability finding that is being maintained by this court is not sufficient to justify a breakup.

This new administration has a more laissez-faire attitude [and will likely] be more amenable to negotiation. The Microsoft case didn't separate cleanly on Republican/Democrat lines, and there's no reason to think that the current administration is uniformly pro-Microsoft. It's less of an interventionist administration.

I think that at least some part of the Jackson findings would be changed and that would give the government the opportunity to pursue something more moderate. I'm fairly confident they'll avoid the breakup.

What I have read is very well reasoned. It's also very nicely written. Non-lawyers can read this and understand.

The court leans on Netscape's usage share, saying that Microsoft's actions to reduce Netscape's usage share would protect Microsoft's monopoly. In fact, all that's required for Netscape's ability to succeed as middleware is its ability to distribute itself. Netscape was widely distributed. In short, I think relying on usage share is incorrect.

You could quibble here and there, but the monopoly maintenance was the government's strongest part of the case. The tying issue (of the browser to the operating system) is, for an economist, the most interesting. The weakest part was the monopolization of the browser, which they've thrown out.

Bob Levy, senior fellow in constitutional studies at the Cato Institute in Washington:

It's certainly good for Microsoft to get Judge Jackson off the case. His reputation is now tarnished. His career was done anyway just because of his seniority status, although this certainly is no way to go out. He deserves what he got. The court seemed to focus on his behavior from the remedy hearings on, that he engaged in improper contacts with the media, criticizing Bill Gates and Microsoft attorneys, and making statements the court found impolitic and not displaying proper legal temperament.

Legally, one of Jackson's problems was he didn't give one minute's worth of hearings on remedy. He didn't allow Microsoft one minute in the courtroom to argue his solution was Draconian. Legally, his remedy wouldn't have survived in any event.

Bill Gates' reputation is still in limbo. This entire case hasn't helped him. This is a victory for Microsoft but certainly a partial one at best. The appellate court did reverse part of the District Court's handling of the case, which helps Bill Gates' image. But on the gut matter, whether Microsoft is violating antitrust laws, there's not much change. So it depends on your baseline.

Eben Moglen, professor at Columbia Law School and counsel to the Free Software Foundation:

It's not very nice news for Judge Jackson, who is treated very roughly in this decision. But if it's bad news for Jackson, it's much worse for Microsoft. This is now the case that never ends. They have to go to the Supreme Court. They cannot accept this remand and accept the finding that they had a monopoly and illegally maintained it. That turns the findings of fact into collateral for anyone who wants to sue. They have to seek review.

And unless they succeed in convincing the Supreme Court that the appeals court misread antitrust law -- and again that won't be easy; this is a court that's favored Microsoft in the past -- they're back in the district court arguing about remedies. And while the remedy may not include breakup, which is possible because it may look quite worse in two years, breakup will still be on the table.

The real point of course is that while Microsoft is fighting the ruling, time is going by. And what are they working on? .Net, which is an attempt to use the operating system to lock up even more features. That's a hard business strategy to be pursuing when an appeals court has already ruled that you've illegally held onto your monopoly.

Then there's the war on free software, which looks a lot like anticompetitive practices. So the gist is that Microsoft doesn't have the freedom of action, and they need that. They need .Net to work and they'll have a hard time doing it now. This decision changes the way Microsoft works.

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