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Technology Stocks : MSFT Internet Explorer vs. NSCP Navigator
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To: Benny Baga who wrote (22552)2/3/1999 3:41:00 PM
From: Lee Martin  Read Replies (1) of 24154
 
Would somebody please take my hand and walk me through a worst case scenario for MSFT? I just don't get how the outcome of the trial could affect MSFT's revenues going forward. If the gov't says they have to unbundle IE will that cause people not to upgrade to Win2000 or SQL whatever. Are people going to stop buying Win98? In other words, MSFT makes the bulk of its $$ selling software, right? It's giving IE away so it makes nothing off it, right? So if they have to separate it from Win98 so what?

I know that MSFT blew away est. of .59 and earned .71 last Q. They made the usual cautious remarks and then said oh by the way your est. are at least .5-.6 light going forward. The reason for beating est. is that PC sales are beating est. and with the PIII comimg out in a couple of weeks and prices continuing to fall (PII's will now get much cheaper), PC sales will probably continue to beat est. So MSFT will sell more OS's than expected and revenues will continue to soar.
When all the new software now in beta tests finally gets released (any idea when?) the afterburners will come on as the enormous installed base of hardware running MSFT software gets upgraded.

So I think I've got a handle on what's driving MSFT's revenues and it ain't IE. What I need help with is assessing what impact the trial has on sentiment and what might be the downside risk to the stock price assuming a worst case scenario.
Thanks, Lee
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