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

To: abbigail who wrote (36399)	1/13/2000 11:47:00 AM
From: Charles T. Russell	Read Replies (2) \| Respond to of 74651

I'll try to be more specific: On an OS Company: A separate corporation running on it's own Balance Sheet will not comprimise standards. They will continue to crank out WIN2K, WinCE and support the Win9X platforms. These products (save CE) will continue to be the pc market leader. Working on their own though, they'll be forced to embrace the emerging Palm/OS, LINUX/open source revolution. A leaner and meaner (perhaps more agile) corporation will be better prepared to do this. The single purpose appliance is another computing paradigm that must be dealt with. I would also anticipate the emergence of a stronger, more geographically distributed MS OS services/support division that focuses on enterprise networking etc., A lot of newer, more exciting partnerships could be derived here. I think the shareholder is ahead here because clearly the OS division is a cash cow that can be valued and evaluated separately. I think innovation (or the incentive to innovate) will increase because application products revenue will no longer be bound to os revenue. The OS division must continue to hold market share on its own. The consumer would benefits here as well. A separate Software Division: By separatint the Software Company from the OS Company, there is a potential loss here. No longer would the Software division have a first peak at new Win32/Win64 features. A more level playing field is established here, which benefits competition and is good for the consumer However, I am convinced that MS employs some of the best software developers in the world. They would clearly rise to the occassion and we would not see a significant loss in market share in the short run. Software tools switching costs will prevent this. Market forces would probably keep the prices of MS software near the price points we see today. Over time, a larger group of competitors will more easily enter this market and as a result we may see lower prices, new software buying options (renting...) and new software delivery paradigms emerge. An Internet Company: What a potential powerhouse. I'm not sure that I need to say much here. This company's currency would be valued very, very high. Free from many restrictions placed on a conglomerate I would expect the Inet Company to go on a buying spree. It would more like become acquirer, not the acquired. A merger with the likes of an ATHM or T would not be out of the question either. A merger with a content provider/producer a la AOL/TWX would be a certainty. Again, good for the consumer because now there would be more choice. Not just an AOL/TWX but another giant. More choice is good. Shareholders should be licking their chops on this one.