The name “Baby Bills” derives from the name of Microsoft’s Bill Gates.
Baby Bills is a fanciful nickname given to the businesses that would possibly result if a large corporation were broken up into several smaller entities. The origin of the name has to do with the founder of Microsoft Corporation, Bill Gates. There has been speculation from time to time about what hypothetical companies would emerge if the US Department of Justice ruled that Microsoft needed to be spun off, similar to what happened with AT&T in the 1980s. it is a takeoff from the nickname given to the number of Bell companies that resulted from the dissolution of AT&T at the time, as these entities were known as “Baby Bells”.
Along with its use as a term to collectively identify companies that would likely emerge from a similar Microsoft split, Baby Bills is increasingly being used when referring to the potential breakup of a large corporation that has assumed some of the attributes of a monopoly. While there are some negative connotations associated with the moniker, such as the underlying assumption that the large company in question may be approaching existing antitrust laws, there is often no intent to convey a suggestion of wrongdoing on the part of the company when this term is used. Instead, Baby Bills is a rather colorful way of describing what could happen if a large company decided to break up into a number of smaller business entities.
The idea of referring to companies that emerge from a major company restructuring as babies has long been part of corporate nomenclature. In most cases, the original corporation, usually known as mom or dad’s company, is said to give birth to the new smaller entities. These babies are then free to do their own business, set their own goals, and generally function as a separate entity from the original corporation. There may still be some contractual ties, allowing all entities involved to still benefit from a working relationship with each other.
Today, the use of the term Baby Bills is no longer used only in reference to Microsoft start-ups. Increasingly, any business or series of businesses that are owned by a larger company and exist as separate and independent business entities from that larger company may be referred to as baby accounts. As long as Microsoft remains one of the most recognizable companies in the world, the term is likely to continue to be used with some regularity, at least until another fanciful moniker for the same type of phenomenon takes hold in the financial and business communities.