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

To: David Howe who wrote (59710)	7/12/2001 8:07:51 AM
From: Bill Fischofer	Read Replies (2) \| Respond to of 74651

Re: Revenue Growth The net of yesterday's announcement (and what is causing renewed enthusiasm for MSFT today) is that it looks like MSFT will do $100-200 million more in revenue this quarter than previous guidance. We probably won't get an answer until they report earnings, but this is what I'm looking for to explain the revenue bump: 1. The "no big deal" Office XP upgrade is being accepted by customers at a rate much higher than originally projected. Why? Software is all about marketing (as well as technology) and marketing is something MSFT is very good at. This is why MSFT has no competition in the consumer space (and why, incidentally, Windows XP will blow away all previous records). MSFT marketing is simply world-class, on the order of a PG or KO. That's something that its critics ignore but that makes a huge difference in the real world. 2. As the economy slows and forces everyone to become more cost-conscious the MSFT value proposition is making real inroads in corporations. The only reason I can think of why ORCL keeps revamping its pricing formulas is because corporations are finally starting to look closely at pricetags and discovering that SQL Server really is able to do the job in a great many areas. Similarly, the Windows 2000 upgrade cycle is being accelerated by a renewed focus on ROI and productivity. Ironically, it is only when times are easy that companies can afford gold-plated solutions. When times are tough the lush margins that SUNW, ORCL, etc. enjoyed for the past several years are the first to feel the heat. With INTC and the PC vendors slashing prices left and right the cost-competitiveness of the Wintel alternative simply gets more and more compelling.

To: David Howe who wrote (59710)	7/12/2001 10:31:40 AM
From: David W. Taylor	Read Replies (3) \| Respond to of 74651

>> For the umpteenth time, the market knew about the investment loss. >> For the umpteenth time. A loss is a loss. The market may have factored in the upcoming loss, so the share price may have been lower than otherwise. That's not the point. Although MSFT's quarter was a great one from the software point of view, the corporation only made a single cent per share. When you buy a share of MSFT you buy the whole bag including Billions in losses. This new fad about reporting Pro Forma earnings and deducting all kinds of special "one off" charges is DISHONEST and the investors who go along with it are basically being fooled.