Just a couple of years ago, the sprint for market-cap supremacy was a three-horse race. General Electric (NYSE:GE) represented the old guard, while Microsoft (NASDAQ:MSFT) and Cisco (NASDAQ:CSCO) championed the software and hardware sectors. It was a tight contest with all three taking the pole position at one time or another.

But times have changed. Microsoft got held back in antitrust hassles. Cisco suffered from a dramatic drop in corporate spending. GE, denied from getting even bigger when it failed to acquire Honeywell (NYSE:HON) two years ago, simply succumbed to more mortal valuations.

The girth game is over. That's why Microsoft had no problem shoveling into its substantial cash hoard to send dividend payouts to its investors, and it's also probably why GE has no problem spinning off its mortgage and life insurance business.

It will do just that next year. GE ads proclaim that it brings good things to life, but now it's looking to bring good things to life insurance. Freer to roam and with IPO proceeds to help grow its business, the new Genworth Financial will be a sound move. With $10 billion in book value, this may be the most anticipated market debut in 2004 this side of Google's rumored offering.

While GE was once arguably valued greater than the sum of its parts, the stock has surrendered nearly half of its value over the past three years. If there is a sound argument to be made that GE is actually now valued less than the sum of its parts, this spin-off will be a good way to help unlock that value.

Well done, GE. Bragging rights as biggest standalone are as useless as they are ultimately fleeting. Last November, our own Bill Mann suggested that GE trim its financial services business so it could focus on growing again. That sound advice may have taken a year to land on the appropriate ears at GE, but investors who could use some good news might finally get it after this smart move.

Farewell market cap, hello thinking cap!

Will GE really bring good things to life insurance by spinning it off? New money is always welcome, but what will the company do with the proceeds from next year's IPO? Is GE going to spin off other businesses once this deal is complete? All this and more -- in the General Electric Discussion Board. Only on Fool.com.