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Technology Stocks : The Learning Company (TLC)
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To: Thomas C. Donald who wrote (5301)8/14/1998 11:51:00 AM
From: Obewon  Read Replies (3) of 6318
 
Thomas,

Please don't get cocky about this. If you read the article you will notice that the computers are in VERY LIMITED supply. Additionally, Micro Center is doing it as a loss leader so the stores will not be able to ramp up supply of these machines as it would swamp any benefit the company gets from increased store traffic.

Please also note that the industry is currently sitting on a possible powderkeg which could explode at any moment. While is has not been seriously brought up, the company faces a new and potentially dangerous competitor - Microsoft.

Yes, I know that Microsoft has been mentioned several times as having competing software products and specifically, its new publishing titles soon to be released has received some attention. BUT...

WHAT HAPPENS IF MICROSOFT BUYS CENDANT SOFTWARE???

1) Microsoft can negotiate better bundle deals with OEMs. (They currently offer bundles for most everything except learning software.)

2) Microsoft has a distribution system that exceeds TLC's. (Who DOESN'T carry Microsoft?)

3) Lots of synergy, cost savings, and leverage.

4) Immediate international brand identity

There are other advantages (including the current depressed price that Cendant is willing to sell it for) which would definitely make sense for the company.

Additionally, Cendant Software and Microsoft's combined market share in the segments affected would not be so great as to cause the FTC to block the purchase even in today's environment.

Anyone else want to comment?

OB
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