How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 433.48

-10.0%

Jan 29 3:59 PM EST

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To: Joe Sabatini who wrote (4023)	11/13/1997 5:36:00 PM
From: Larry Sullivan	Read Replies (2) of 74651

I think that you are on target. One additional item. This is a paragraph from the NetAction piece Columbo wanted us to read. Well I did and I thought that this particular paragraph pretty much let me know that NetAction was a bit over the top. And as Microsoft acquires both technology and key individuals, it can add them to a research and development department that has grown to a size that threatens to overwhelm any potential competitor. During fiscal year 1997, Microsoft spent $1.93 billion on product research and development activities. That amounts to 16.9% of revenue, an admirable percentage commitment to innovation but a raw amount that tilts the whole competitive nature of the industry towards Microsoft's control. So that means that accoding to NetAction the fact that Microsoft pours its profits back into the companys R&D (probably a good explanation why shareholders do not get dividends) to drive their future. This seems broken - NetAction is complaining because an American company is spending money on its long term future. How horrible, that might just keep them successful, damn. :) Sorry just never thought capital reinvestment (especially within the high-tech sector) was a bad thing. Sorry if others cannot pour the same amount into R&D but I also do not believe it because I bet the IBM's etc. spend the same percentage or more. Larry...

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