A vertical split would entail splitting up Microsoft along product lines.
Not to speak for Microsoft but I see several major categories of products:
Operating systems (NT, 95/98 and CE)
Internet Applications (Browsers and services)
Server Applications (MSSQL, SII)
Development Systems (Compilers and Tools)
Business Applications (Office Applications and Suites )
Consumer Applications (Games, Entertainment, etc)
According to the above list, Microsoft could be split at least 6 ways. However, within some of these more than one company should result. The most obvious example is the Operating Systems Group. NT and the consumer systems (98/CE) should be in their own company. Why? Well Microsoft has already announced that the 98 code base is going away and all customers will only have the choice of a version of NT. That might actually make sense. But, all it does is transfer the monopoly power present in the consumer OS market into the enterprise market. This itself may violate the antitrust laws. So, they may have to be split up and maintained over time.
Internet Applications and Business Applications may also be difficult to define. Microsoft right now would like to leverage its "to be gained" territory in the browsers to help out its Money product. Again, this type of activity is very unfair to other companies in the market that may not offer a separate browser. And, it is clearly unfair to companies that offer only a browser and do not have an interest in going into personal finance software. There is no reason to force Netscape and Intuit to merge just to be able to compete.
The real question is do we really need 6 or 12 new little Microsoft's?
The answer is simply yes if all companies are expected to have a fair playing field. Microsoft has proven it will not play fair given a choice. Given a choice it will do everything it can to preclude competitors from having a fair and open market to compete in. So. The only solution is eliminate the ability to "cheat" or conduct illegal activities.
Anyone of these products or categories can compete on their own merits. Other companies in the computer industry are doing it now. There is no reason why a little Microsoft could not do the same.
All they loose is the "unfair advantage" of being connected with the monopoly.
Lewis A. Mettler, Esq