How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 483.88

+1.6%

3:59 PM EST

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To: RTev who wrote (22353)	5/7/1999 7:39:00 PM
From: John Carpenter	Read Replies (1) of 74651

Dominance of the ISP market would accelerate MSFT's E.P.S. growth rate with the combination of subscriber fees and corporate advertising. The market affords higher P/E multiples to ISPs than to software companies, even dominant software companies. Personally speaking, I find myself spending increasingly more time on line and increasingly less time using MSFT software. The gap in market capitalization between AOL and MSFT has narrowed markedly in the last year. ISP dominance is critical because the market says its critical. The market determines the relative merit of any business. The ISP market is growing faster than MSFT's underlying businesses and the market rewards higher E.P.S. growth with a higher PE ratio and greater stock price appreciation. AOL is expected to grow EPS 49% per year over the next five years, with MSFT expected to grow at about half that rate.

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