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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (32792)	11/8/1999 12:17:00 PM
From: Robert Rose	Read Replies (1) \| Respond to of 99985

Les, I must give Favors credit for calling the intermediate bottom right on. I am paying attention. Regards as always, Rob

To: Les H who wrote (32792)	11/8/1999 3:41:00 PM
From: Les H	Respond to of 99985

ANALYSTS: MICROSOFT FINDING MORE SYMBOLIC THAN PRACTICAL --Possible Obsolescence of Operating Systems Bigger Threat By Mark Pender NEW YORK (MktNews) - Judge Thomas Penfield Jackson's finding that Microsoft engaged in apparently monopolistic practices surprised no one on Wall Street, posing little direct threat to Microsoft but possibly risking the spectacle of government intervention in the private sector. Analysts said Jackson's initial finding -- that the nation's largest software inflicted "immediate and discernible harm" against its competitors -- applies only to history and that the future outlook for the company will turn on its ability to maintain its operating system dominance amid the hyper-evolution of the Internet. "The worst that can be said is that Microsoft is guilty of building a benevolent monopoly," said Joe Battipaglia, chief strategist at Gruntal & Co, while pausing between chocolate donuts. Battipaglia said the survival and superiority of Netscape's browser reveal the relative impotence of Microsoft's monopoly, as does the unprecedented time-compression of technological innovation evident in the Internet. But much more importantly, Battipaglia said the government's inquiry is an historical exercise, as the nature of the industry has made the judge's views and possible decisions irrelevant. "The court is trying old news." Battipaglia said any ultimate decisions, settlements or divestitures will have no impact on the technology sector, on the market itself, or on the economy. Government officials indicated over the weekend they would not seek punitive damages, while Microsoft's Bill Gates opened the door to a settlement saying his company "is committed to resolving this matter in a fair and responsible manner." Analysts said the much greater challenge to Microsoft will be the launch of Windows 2000 next year amid emerging indications that future Internet technology, spearheaded most notably by Sun Microsystems, may make operating systems themselves obsolete. Further diminishing the importance of the judge's finding is the protracted nature of the litigation. If a settlement is not reached, analysts say a final ruling by Judge Jackson could take up to six more months, followed by a year-and-a-half appeals process and another year-plus for any supreme court action. Though the judge's finding may prove insignificant for Microsoft, some analysts warn that the emergence of government intervention as a principle may sour investor sentiment in general. "Face-offs with the Federal government can prove to be extraordinarily important ... Worries can emerge that the government is interfering with the private sector," warns First Albany Chief Strategist Hugh Johnson. Johnson bases his view on history, looking back at President Kennedy's March 1962 fight to prevent price increases in the U.S. steel industry and the government's divestiture of AT&T in 1984. Johnson said both cases evoked the "general worry" that government intervention, by its nature, would lower industrial efficiency and disrupt profit growth. In a four-month period following the steel battle, the Dow Industrials sank 21% while in the five months after the AT&T break-up the Dow slid 16%. But the absence of President Clinton's public involvement in the case may ease any worries of interventionism, Johnson said. "Does this decision signal a change in government policy? The suspicion is that it doesn't given Clinton's low profile." Microsoft was down 2 7/8 to 88 11/16 in extremely heavy volume midafternoon Monday.