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

To: JC Jaros who wrote (50258)	9/28/2000 9:38:29 PM
From: Rusty Johnson	Read Replies (1) \| Respond to of 74651

Microsoft's Split Personality Splitting up Microsoft might not be a bad idea. How so? Carving up the company would separate its two personalities once and for all. One business could do what it does best -- protect the Windows franchise. The other would be free to innovate without worrying about stepping on the Windows monopoly. fool.com ... Microsoft's current mandate, "defend the Windows monopoly," is clearly a third-wave agenda. Sustain the status quo, hold your ground -- third wave all the way. It has no CHOICE but to pursue this third-wave agenda. Its monopoly is too profitable for any other course of action to make sense. And, inevitably, this leads to bureaucratic decisions. ... So, Microsoft is refusing to acknowledge its third-wave status, despite the fact that its central goal leaves it no other option. To Microsoft's management and culture, all bureaucracy is pure evil. It pretends to be a first-wave company by using the phrase "innovate" in every press release -- despite the fact its last attempt at innovation resulted in "Microsoft BOB" (the smiley face with sunglasses, in stores everywhere Christmas of 1995). You need commandos to innovate, and commandos are allergic to bureaucracy. All Microsoft's growth these days is via acquisition, from PowerPoint, to Hotmail, to Frontpage. This is normal for a mature third-wave company, and again there's nothing inherently wrong with it. Berkshire Hathaway (NYSE: BRK.A) has turned it into an art form. What's wrong is that Microsoft denies it. Microsoft is having a profound identity crisis bordering on a nervous breakdown. If it can't be first-wave, it won't give up the second wave. Microsoft REFUSES to relinquish its second-wave agenda of growing Windows beyond market saturation, despite 95% market penetration and rising prices -- so that Windows, in some cases, now costs more than the hardware it runs on. Microsoft is trying to install Windows in toothbrushes and toasters, well beyond where it makes any sense to be.