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To: Jeff Dryer who wrote (23025)	7/15/1999 8:38:00 PM
From: Jeff Dryer	Respond to of 27307

I think it's also important to point out that Microsoft has generated about $7 billion in after tax Net Income during the last 4 quarters and is projected to generate about $10 billion in after tax Net Income during the next year. Analysts like to talk about the next Microsoft, but they never like to explain how their favorite picks are going to ever generate Net Income like Microsoft does. In the last 4 quarters, Yahoo had total revenue of about $332 million and pro forma Net Income of about $95 million (1.4% of Microsoft's earnings but 8% of Microsoft's valuation).

To: Jeff Dryer who wrote (23025)	7/16/1999 2:53:00 AM
From: Shafik Habal	Read Replies (1) \| Respond to of 27307

Agree JD, AOL is being priced to perhaps "succeed" MSFT. I hate to discuss AOL on a YHOO thread, but pls allow me some levity. If one reflects back to the period when MSFT was (and perhaps still is) in its hypergrowth years, we saw the transition of the company from MS-DOS to windows platform to windows NT and subsequent applications such as the office suites. MSFT has managed to essentially destroy Corel/Lotus (neither of which are competitive among today's applications). Now, if one studies AOL, its possible to SPECULATE (and i stress this word) that AOL may morph into another "MSFTesque" company. Notice how AOL has been nibbling/gobbling up select companies to complement products and services already offered. ICQ/AOL IM, streaming media (can't recall the names), Netscape, and the list goes on.... The fact that MSFT managed to infiltrate virtually every PC is no coincidence. Whether we realize this or not, AOL is gradually managing to do the very same thing. Granted, MSFT generates a tremendous amount of revenue and income from their products, but its not too difficult to see that at some point, AOL will also be able to leverage their market position and capitalize on their vast array of services. Thanks for the summarized market cap list. One thing I would like to close with which may or may not help you and others. Prior to this tremendous bull market we have and still are enjoying, I used to be baffled at the valuations some growth companies like CSCO and MSFT were receiving (1993 time frame). The management of both CSCO and MSFT have done a tremendous job and it is to their credit that investors have enjoyed this tremendous wave of prosperity. I think the management in AOL has done exceptionally well, and market cap arguments aside, should continue to execute. The result will be a higher valuation next year and the following years. Thus, trying to judge hypergrowth stocks by market capitalizations has proven to be an exercise in futility. Best of luck. Regards, SH