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

To: David Howe who wrote (53765)	12/4/2000 1:37:09 AM
From: Dave	Read Replies (1) \| Respond to of 74651

One more area of terrific future growth that I haven't mentioned yet... UltimateTV... I wouldn't bet hard-earned money on terrific future growth of UltimateTV's business model for several reasons: 1. Microsoft loses money on every WebTV/UltimateTV customer. They have to pay the hardware licensees to build the box, and they lose money on each month that each customer subscribes. WebTV has never come up with a business model that would ever become profitable. If the number of customers were to approach infinity, so would their losses. 2. On top of that, in the case of JVC's WebTV (and presumably RCA's UltimateTV, although figures aren't available yet), more than 50% of the people who buy the box don't ever subscribe to the service (despite the damnable SUBSCRIBE NOW! ad that Microsoft displays every time you turn on your TV), so the money that they pay the licensee often never turns into a subscriber. 3. In the case of AT&T, Microsoft had to invest $5 BILLION dollars in AT&T to get those 7.5 million boxes made. That's $667 per box. And last time I checked, that was money down the drain because (a) AT&T stock is down about 68% from its highs, and (b) AT&T is using LiberateTV as its software because Microsoft is late with the goods. If you think UltimateTV is a good reason to buy a piece of a $300 billion company, you should buy LBRT, which is a $1 billion company that does only interactive TV, and its product actually exists. 4. There is strong competition in the interactive market. Besides MSFT and LBRT, there are Replay and TiVO, who have a big lead on MSFT, and still haven't been able to make a profit in this market. And then there are OpenTV and that pesky AOL/Time Warner. 5. Nobody cares. The public is yawning so loud it's annoying. Dave