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Technology Stocks : Intel Corporation (INTC)
INTC 40.33-2.6%3:59 PM EST

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To: Len Roselli who wrote (56750)6/3/1998 12:22:00 PM
From: Larry Loeb  Read Replies (1) of 186894
 
Len,

Re: Standard Oil and AT&T breakup analogy:

SO and AT&T were combinations of geographically diverse companies. AT&T was a regulated utility which was unable to pursue many businesses due to regulation.

Once these two were broken up, their pieces were able to aggressively compete in both new and old markets. This resulted in overall gains for the combination of the new entities.

Neither Microsoft nor Intel are regulated or forced to only operate in one region. They aggressively compete in new and existing markets and respond to competition by absorbing productive utility and improving manufacturing efficiencies.

There is no reason to believe that the components of Intel or Microsoft would be able to be any more successful than the companies are at present.

Intel, in particular, would be negatively effected. They presently compete in the chip set business to insure that their new, higher margin, processors are quickly adopted by manufacturers. If Intel had to abandon that business, their margins, and the pace of technological improvement in the form of faster processors, would be severely damaged.

Larry
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