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

To: John F. Dowd who wrote (38629)	2/26/2000 5:40:00 PM
From: Paul K	Respond to of 74651

MSFT's hot little new XBOX "The new goal could give the giant a large part of the approximately $7 billion that the interactive entertainment industry pulled in last year and a heavy portion of the $300 million generated by DVD player sales in 1999." zdnet.com

To: John F. Dowd who wrote (38629)	2/27/2000 12:49:00 AM
From: rudedog	Read Replies (1) \| Respond to of 74651

John - re: OEM coop advertising funds always bear strict covenants. No OEM is going to let their funds be spent on another products advertising even tangentially. That was pretty much true up until the last few years, but Intel in particular has gone WAY over to the other side - they currently have a number of programs which provide marketing money which has NO restrictions except that it be used in marketing - there is no requirement to even mention Intel or refer to them in the ads, let alone avoid talking about competitive products. This is kind of a "frequent flyer" program - and OEMs have used this money to advertise competitor's products, or their own competing products in the case of IBM, HP and CPQ. I have only anecdotal evidence on a few of the places where those programs have been used, and in those cases the OEMs seem to feel some obligation to at least mention Intel somewhere, but discussion of other products (such as AMD in the case of IBM and HP) is hardly tangential. Restrictions on the "Intel Inside" program have also been relaxed to the point that Intel will co-fund based on the percentage of ad content that refers to Intel, regardless of the other content. MSFT also has relaxed restrictions on the use of "MDF" (Market Development Funds) but still retains a lot more control over content. I think Intel's way is smarter... after all, these companies are not exactly short of cash, and the "frequent flyer" approach provides a subtle but compelling reason for OEMs to remain on the Intel camp at least to some extent. It was a big change from the hardball tactics Intel used earlier, and along with other programs Intel has developed for joint engineering, and their investment strategy, has left them much less vulnerable to government meddling.