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

To: BillHoo who wrote (43382)	4/27/2000 8:56:00 PM
From: rudedog	Read Replies (2) \| Respond to of 74651

Bill - good post, but you forgot the most important Ballmer deal of all. When IBM came calling for an OS for the PC, Gates wanted to do a "quick flip" of the Seattle Software DOS product - the $500,000 IBM had on the table was about equal to MSFT's annual revenue at that point, and they could have made 10X in 3 days. Ballmer talked him into a per-copy license. Although this was less money up front, when combined with the other key Ballmer provision - MSFT would also have the ability to sell the same or a derivative product under their own license with no obligation to IBM - they still owned the product. Ballmer's reasoning was that although IBM would initially be the only customer, and the MSFT rights to the product would therefore be worth nothing beyond the 50 cents per box they got from IBM, eventually others would make similar machines, and MSFT would have an independent revenue stream. In an address to a group of industry executives in 1992, Ballmer described the 3 days when that deal was framed, and admitted that he had no idea what the impact would be - he said that he used "maybe a couple of million machines" as the "wild upside" potential for the non-IBM PC market. But he had the dynamics right. He has managed to create and sustain a kind of "aw shucks" image which hides one of the sharper minds in the business.