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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: larry who wrote (27931)	8/5/1999 3:39:00 PM
From: johnd	Respond to of 74651

Now I think I know why MSFT said margins won't improve this coming year and that revenue growth will slow down. I think a big factor is this free ISP thing to compete with AOL. I figure $240/year (~20 per month) times 2million MSN customer implies about 480 million of ISP revenues that MSFT will likely loose by offering free ISP. I feel eventually it will be compensated with greater AD rev. But most likely there will be material reduction in revenues of about 1/2 billion in FY2000. The whole MSN thing will result in a significant -ve margin business for the near term, reducing both revenue growth rates and not allowing net margins to grow.