How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 485.49

+1.8%

Nov 26 3:59 PM EST

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To: taxman who wrote (22063)	5/4/1999 8:48:00 PM
From: RTev	Read Replies (2) of 74651

I'm delighted to hear ever-more solid reports that Microsoft is thinking of at least creating a tracking stock for the internet properties. I hope that the Bloomberg take on it is correct -- that they will actually spin it off into a separate company. There could be obvious advantages in stock price. Microsoft would no longer have to carry the hefty losses from the internet operations on its books. That would reflect well on MSFT's more profit-sensitive price. For its part, the internet operations would get the focus they deserve and would probably compete well in the profit-oblivious net stock sphere -- even after the current bubble-bursting has run its course. And there's that other advantage having to do with the dreaded "M" word. The internet properties have been whipped around for years as Microsoft executives make them hew the company path to promote the Windows franchise. That hasn't always been in the best interests of the properties. A couple of examples: Is it best to use an ActiveX control on a web page instead of a Java applet? There are times when the answer to that is "Yes", but not always. It seems that designers of Microsoft web products are rarely given the freedom to decide the question based on market factors. Unfortunately, it seems that they are often forced to make decisions that are best for the Windows franchise even when they aren't good choices for the particular web property. What's the best platform to use to serve the web page to users? For too long, the reflexive answer at all MSN properties was: "NT, of course". As what some reports say was a disastrous experience when trying to switch Hotmail over to NT probably demonstrated, that isn't always the right answer. A separate company would still probably be tightly controlled by Microsoft, but the separate reporting criteria would give the new company more independence than a Microsoft division can have. Their choices will have to be those that are best for the long-term health of their own company. It would still tend toward using Microsoft "solutions", but would have more freedom to look elsewhere when other choices make sense.

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