How verdict will affect Stewart Inc.

"We just have a tiny section that's not [the Martha Stewart brand], but that's what they'd want to see. They'd say, 'Do you have anything besides Martha Stewart?' "

Some observers argue that Stewart has lost the public's trust, and that this could translate into lost advertising sales for her magazine and canceled television contracts. "I think the brand is dead as we know it," says Morris Reid, a managing partner in Westin Rinehart, a consulting firm in Washington. "She's in the trust businesses, the trust of her judgment ... and today that trust went out the door."

Jail time could be particularly devastating. The New York tabloids, for example, are already running doctored photos showing her behind bars. "People would be saying, 'Here's a convicted criminal who has gone to jail, and we don't want anything to do with her magazine.... We don't want anything to do with her," says Professor Miller.

Others, however, argue that the public will forgive her, and that her talent and extraordinary capacity to work hard will get her through the crisis. "I think she'll definitely be able to come back," says Sig Rogich of the Rogich Communications Group in Las Vegas. "Time is a healer."

Her company, nevertheless, may have to undergo major changes once Stewart starts serving her sentence. Mr. Reid thinks Stewart's daughter, Alexis, would be a great candidate to take over the company. A tall brunette, Miss Stewart was at her mother's trial almost every day.

"She's got Martha's magic because she's Martha's daughter," says Reid. "There will be a lot of sympathy out there for Martha. People will embrace her daughter."

Lawyers believe it's very likely the elder Stewart will face jail time when she is sentenced. Congress rewrote the federal sentencing guidelines to ensure that white-collar criminals would not be able to avoid prison time. The maximum sentence for the four counts she was convicted of is 20 years in prison and a $1 million fine. Lawyers say she is more likely to receive anywhere from 10 to 16 months.

"She'll have to serve some time, although not that much," says Kirby Behre, a former federal prosecutor who is now a partner at Paul, Hastings, Janofsky & Walker in Washington. "I guess we better get ready for all the decorating jail cell jokes."

Lawyers for both Stewart and broker Peter Bacanovic said they will appeal the verdict. But the appeal will have to be based on mistakes by the trial judge, Miriam Goldman Cedarbaum. Last week, Judge Cedarbaum threw out a charge that Stewart had deceived investors in her company, Martha Stewart Living Omnimedia, when she issued statements that she had done nothing wrong. That count had been considered "novel" by many lawyers, and without that charge, the case became relatively simple.

"The government ran a straight case, and the judge ran a fair case," says Steve Thel, a law professor at Fordham University School of Law in New York. "The appeal road is a rough road."

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