Star Tribune from Minneapolis, Minnesota • Page 31

INDEX MORE OIL ON THE WAY? The new president of OPEC said another increase in crude oil output is probably the offing this year. Turn to D3 The economy: Industrial prices up D3 Executive only D2 Stock D4.D6 I Business Briefing D3 Mutual funds D7 1 Tuesday, April 4, 2000 Section 0 www.startribune.combusiness StarTribune MARKETS THE MICROSOFT DECISION CLOSE: 1122153 up3oom 1 ffDMEniis ffao1 ft bin mm CLOSE 4223.68 down 34915 VOLUME: 1.7 Mfen ANALYSIS Appeal creates limbo, but delays final fate NYSE CLOSE 659.66 tlL96 VOLUME; 1j0 bon ELECTRONIC GAMES Funco is sold to rival retailer Electronics Boutique to pay $110 million By Janet Moore Star Tribune Staff Writer Funco the Eden Prairie electronic games retailer that started in the basement of a New Hope home, was sold Monday to a competitor for $1 10 million. The purchase of Funco makes Electronics 6 CLOSE 150537 H739 would have been imposed had it agreed to settie the suit. In a widely anticipated decision, U.S. District Judge Thomas Penfield Jackson ruled that Microsoft violated the Sherman Antitrust Act and maintained its monopoly power over the market for computer operating system software by anticompetitive means.

ANALYSIS continues on D2: More private suits wait in the wings. Company is planning its next big software push. suits have the potential to go forward while Jackson's ruling is on appeal," said Rich Gray, an antitrust attorney with Outside General Counsel of Silicon Valley. Still many experts predict Microsoft will get much more sympathetic hearing from appeals courts, and in the meantime will introduce new products without restrictions that RusseD 2000 CLOSE 516j04 down 2305 tainty over its future, or helped by the fact that its final fate will be delayed. Some say Microsoft will be distracted by its appeals and besieged with consumer lawsuits, all claiming that the company stifled innovation, reducing their software choices in the marketplace.

"All of these pending law By Michael 1 Martinez Associated Press REDMOND, WASH. Microsoft faces a long and difficult legal fight as it appeals a federal judge's ruling that it broke antitrust laws. But technology and antitrust experts are divided on whether the company will be hindered by uncer Bloomberg-Star IV: TjtalOO CLOSE 10151 down 2J36 Gold CLOSE 27750 ip 0.75 ELSEWHERE: Judge rules Microsoft violated U.S. antitrust laws Al What's a technology investor to do now? Al Handy Harman Microsoft's stock dives, dragging the Nasdaq with it D4 A VP? CLOSE 26.43 down 0.47 West Texas arude Boutique Holdings Corp. of West Chester, the world's largest specialty retailer of electronic games with some i 1,028 stores and about $1 billion in sales.

Electronics Boutique will pay $17.50 in cash for each gnty rates ft JmaT-MI 619 30r.T-bant1 581 Prime rats 9)0 Twin Cities legal experts, tech leaders voice concern David Pomije, Funco CEO: more time for golf and used equipment Funco share, 47 percent more than Funco's closing price Friday. The deal means Funco's founder and CEO, David Pomije, 43, will gross about $24 million, according to documents filed with the Securities Exchange Commission. 6 FUNCO continues on No shock to analysts. In the wake of U.S. District Judge Thomas Penfield Jackson's verdict Monday that Microsoft illegally used anticompetitive practices to maintain its monopoly, several local business and technology leaders opined on the day's developments, including the speculation that Jackson will order Microsoft V' I c' I ami 1 1 iiii'inrviTrfiiTWMriinrrrTlBitiirrr''' 11 111 ri ipinMfamma.MiiiM to be broken up7 r- Russ Gullotti, chairman and CEO of National Computer Systems in Eden Prairie, said he was troubled by the ruling.

"I generally do not like to see the courts involved in the running of a business. Business and government work on two different planes, and they work at totally different speeds," Gullotti said. "4w Russ Gullotti: National Computer Systems FYI Pizza puffery battle could reshape ads A bitter legal battle being waged in a New Orleans courtroom could force some of the nation's best-known companies to tone down some of the claims made in popular advertising jingles and slogans. The food fight focuses on Pizza Hut's claim that the "Better ingredients. Better pizza.

slogan of the rival Papa John's chain crosses over into false advertising. The case has put many advertising industry executives on edge because it could prompt similar challenges against such well-known slogans as Burger King's "It just tastes better," Snap-ple's "Made from the best stuff on Earth," and, ironically, Pizza Hut's own slogan "Best pizza under one roof." "If this case is upheld, it could diminish the ability of companies to communicate their messages through advertising," said Dan Troy, a Washington lawyer who represents the American Advertising Federation, one of the nation's largest advertising trade groups. "Companies will have to be more careful how they compare their products with their competitors'." Los Angeles Times "This is far from over, and by the time the appeals are done, the marketplace is '-WW' ''W' '9 ''SSf than it does today. But find- 1 fPlr" ing Microsoft guilty of anti- a. k.

'-et, trust violations is not the I big news. The big news will be the penalty." Minneapolis attorney A AIRLINES Northwest asks for return of United gate United doesn't seem to need it, NWA says By Dan Wascoe Jr. Star Tribune Staff Writer Northwest Airlines wants Gate 43 back. Nine months ago, the Metropolitan Airports Commission switched the lease for the gate to United Airlines, hoping to boost competition at Minneapolis-St. Paul International Airport.

Now, both Northwest and MAC officials are raising questions. Gordon Wennerstrom, the MAC's director of commercial management and airline affairs, said Monday that "the commission certainly anticipated additional service by United" in return for allowing the airline to add the gate to its existing three. By Dec. 23, United had installed a new jet bridge at the gate, which Wennerstrom estimated cost $250,000. GATE 43 continues on D3: United has been thinking about cutbacks.

Vance Opperman said the Vance Opper-possible Microsoft breakup man, Minneapo-order would be an inappro- lis attorney priate action. "I don't think these kinds of remedies fit very well in the fast-paced economy we have today. What does fit is private enforcement of antitrust laws," Opperman said. REACTION continues on D2: Legal, industry ramifications. Associated Press Microsoft Chairman Bill Gates answered questions at a news conference Monday.

He said the company will appeal a ruling that It violated antitrust laws. Microsoft prevailed In one area of the suit, but the Judge sided with the government on the most crucial points. Landmark ruling may haunt corporate foes Monday that the company had violated the Sherman Antitrust Act, as the Justice Department and 19 states had claimed in their 1998 lawsuit. Netscape Communications Corp. led the parade, and Sun Microsystems, Intel, Compaq, RealNetworks, IBM, Apple Computer and others testified at the trial.

But now that Microsoft has been judged a monopolist that has harmed consumers, and the time has arrived to consider how to punish it, the companies are pulling back. Sun's Scott McNealy has urged that Microsoft not be dismembered. McNealy said he opposes such a so-called "structural remedy" only because the pieces would each continue to offend, not because the company doesn't deserve to be punished. COMPETITORS continues on D2: A return to the not-so-good old days? Seattle Post-Intelligencer SEATTLE Microsoft's antitrust trial ultimately may bite the software industry that bore and fed it, or harm the consumers whose dollars have built the industry into the powerhouse it has become. It was competitors' complaints about Microsoft's monopoly in Intel-based PC operating systems that led to U.S.

District Judge Thomas Penfield Jackson's ruling COMMENTS Apartment owners say tax cut is main remedy for rental shortage For comments about this section, call Assistant Managing Editor Business Scott Gillespie at 612-673-4516 or e-mail scottg startribune.com. For questions about stock listings, call 612-673-7926 or e-mail pkennedystartribune For inquiries or complaints about Individual stories, call our reader's representative at 612-673-4450 or e-mail readerrep gw.startribune.com. investment tax credits that spurred rental unit construction in the 1980s. Lost in the hype of the "new economy" and nearly full employment is the fact that tens of thousands of Twin Citians are working for $6 to $10 per hour in factories, restaurant kitchens, supermarkets and retail shops. The experts say it takes at least $11 an hour to afford a $600-a-month one-bed room apartment.

Many are paying half their net income in rent. Meanwhile, Minneapolis, St. Paul and other cities have been demolishing low-cost housing for 20 years to make way for commercial development (often subsidized) and for high-end housing. ST. ANTHONY continues on D5: Benson, Business Partnership haiv plans to sliape policy.

some of the state's big names in nonprofit housing as well as government officials. At the same time, the area is producing thousands of working-class jobs. It's a rental crisis, not just a bunch of carping building owners. The federal government over the past decade has cut back on rental-housing subsidies. And incentives are long gone, including the accelerated depreciation and The trade group for Minnesota's apartment building owners says it would take a significant cut in property taxes to stimulate construction in an industry that has all but dried up in the Twin Cities except for high-end rentals at a time when vacancy rates for plain-vanilla buildings approach an unheard-of 1 percent.

Building permits for multi-family construction in the seven- OH BUSINESS Neal St. Anthony county metropolitan area dropped 60 percent during the 1990s from the level of the 1970s and 1980s, notes a new report from the Minnesota Multi-Housing Association Task Force, whose members also include I mm jfc.MV fri Jh itinhAirtV AV Akjjk-Jfc i JtAji AVIV I.