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Technology Stocks : The Learning Company (TLC)
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To: Thomas C. Donald who wrote (5313)8/15/1998 2:47:00 AM
From: Obewon  Read Replies (1) of 6318
 
Thomas: You may be right about the split of Cendant software into its component games and education software components. I would give the chance as about 30% with the remaining chances being IPO (20%) and sale of the entire business (50%).

As for your question about which product would sell better, the obvious answer would be the educational and games software that Cendant currently owns. Please imagine the increase in volume that certain games have seen when they are bundled with new PCs. Yes, the products carry lower margins but they normally make better money in the long run due to volume.

The main way I see a Microsoft - Cendant Software deal as profitable is in the decreased overhead and distribution costs that Microsoft can achieve.

Additionally, it allows Microsoft access to a major database
of consumers they currently don't have. Remember the rebate programs that still are prevailent in the industry? A major advantage of the rebate model is that the company gets to gather ALOT of information on its consumers which it can then use to market and position its products (or even sell to outside marketing firms who pay by the name). Microsoft has never been aggressive with any rebate programs in the past. Cendant Software most likely has millions of names in its database (since it was part of Cendant). I'm sure Bill could find some way to use it to increase Microsoft's sales.

OB
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