Wall Street looks past Microsoft's European defeat

SEATTLE (Reuters) - Wall Street on Monday mostly shrugged off Microsoft Corp’s defeat in a European Union court, which upheld a landmark antitrust ruling against the world’s largest software maker.

Analysts and investors said the decision by the second-highest EU court to dismiss Microsoft’s appeal on all key points was not a surprise, and the lack of additional punitive damages was somewhat positive for the company.

Shares of Microsoft were down 36 cents, or 1.24 percent, to $28.68 in afternoon Nasdaq trade, while the Nasdaq Composite Index was down 0.7 percent.

“They didn’t hoist anything more on Microsoft,” said Kim Caughey, a senior analyst at Fort Pitt Capital Group, which oversees more than $1 billion, including Microsoft shares, for clients.

“Although this is probably a setback for Microsoft’s strategy going forward, it’s not that big of a deal for investors. The fines have already been accounted for, so none of the stuff announced today had bottom-line impact,” said Caughey.

Earlier on Monday, the Luxembourg-based EU court dismissed Microsoft’s appeal on all key points against a 2004 European Commission ruling and upheld a record 497 million euro ($689.9 million) fine.

Redmond, Washington-based Microsoft said it has not yet decided whether to appeal to the European Court of Justice, the EU’s top court. In the past, the company has taken its antitrust battles as far as it can go.

“The EU hasn’t been favorable to Microsoft or any other company with a near-monopoly position, so it wasn’t expected that Microsoft would get anything too favorable,” said Andy Miedler, senior technology analyst at Edward Jones.

In the 2004 ruling, the European Commission ordered Microsoft to sell a version of its Windows operating system without the Windows Media Player application used for watching video and listening to music.

It was also ordered to share information to help rivals’ computer servers work smoothly with Windows.

“A few years ago, Microsoft may have put some resources into coming out with a version of Windows without the Media Player, but those costs are largely behind it,” said Miedler.

Reporting by Daisuke Wakabayashi