Microsoft co-founders Bill Gates and Paul Allen are preparing to sell what is estimated to be over $1 billion in Microsoft common shares.

In a series of filings with the US Securities and Exchange Commission made this month, the two men who started what is now the world's most powerful software company announced their intentions to part with more than 9.5 million shares of Microsoft stock.

But there is no reason for Microsoft shareholders to worry. Both men, who have been made rich by their role in launching the company, are merely selling the shares in order to diversify their financial holdings, sources said.

Mr Allen has reported to the SEC that he intends to sell more than 6 million shares which today have an estimated market value close to $650 million (£910 million).

On Monday, Mr Allen told the SEC that he would be adding over 3 million shares worth roughly $315 million to the 3 million shares he announced he would sell at the beginning of August.

For his part, Mr Gates has reported to the SEC his intention to sell 3.5 million shares of the company's stock worth over $385 million. Microsoft's acting head filed a series of documents during the first week of August detailing this plan.

Spokesmen for both men have confirmed publicly that the sales are nothing more than expected diversification measures made to protect their overall financial standing.

Both have sold a number of shares already this year. This month's filings indicated that Mr Gates and his associated foundations had sold roughly 7 million shares since May of 1998. Mr Allen's filings show that he has parted with more than 10 million shares since May.

In filings made with the SEC in September of last year, Microsoft indicated that Mr Gates held in excess of 540 million shares in the company, or about 22 per cent of the company, while Mr Allen laid claim to around 185 million shares, about 7 per cent overall.

There are roughly 2.5 billion common shares outstanding of Microsoft stock today, according to previous SEC filings.