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

To: Bald Man from Mars who wrote (6474)	5/4/1998 7:10:00 PM
From: Maverick	Read Replies (1) \| Respond to of 74651

Sen. Judiciary Committee Chairman Orrin Hatch attacked MICROSOFT CORP on Friday and was in turn attacked by a senator from the company's home state, Slade Gorton, in an escalating battle between the two senior Republicans. Gorton called remarks about Microsoft by Hatch "nonsensical" and said he was "completely outraged" by them. Hatch was not immediately available to respond. The barbs on Capitol Hill again reflected an increasingly tense atmosphere surrounding Microsoft as state attorneys general -- and possibly the Justice Department -- are on the the cusp of filing new legal action against the software giant. (Reuters 10:11 PM ET 05/01/98) For the full text story, see infobeat.com

To: Bald Man from Mars who wrote (6474)	5/4/1998 7:37:00 PM
From: Maverick	Respond to of 74651

new method to valuate high flier: cash flow margin, MSFT's is 15 % Dell Computer Corp. (Nasdaq, DELL) also sees a way to call itself undervalued. Dell after all, is an ''Internet'' company, especially as Chief Financial Officer Tom Meredith reported that sales over the Internet have jumped from $1 million a day a year ago to $4 million a day in February. Meredith's argument for Dell's stock being cheap is based on cash-flow margin, a measurement of operating earnings as a percentage of sales. Top-tier cash-flow-margin companies like Microsoft or Gillette Co. (NYSE, G), with margins of nearly 15 percent, trade for about two times their earnings growth rate, Meredith said. This means, for example, if their growth rates were 30 percent, then their stock would be worth about 60 times its earnings per share. Companies with a 10 percent cash-flow margin trade for more like 1 1/2 times their growth rate. Dell, said Meredith, has an 11 percent cash-flow margin but trades for a discount to its growth rate. Meredith wouldn't comment on Dell's quarter, which ends Sunday. But his body language, in this

To: Bald Man from Mars who wrote (6474)	5/4/1998 7:38:00 PM
From: Maverick	Read Replies (1) \| Respond to of 74651

MSFT cash-flow margin is 15%, part II case his rapid and peppy retort that PC ''demand is good -- actually robust'' -- suggests Dell once again will meet or beat analysts expectations. Finally, there's Onsale Inc. (Nasdaq, ONSL), the online auction house. CEO S. Jerrold Kaplan explains away the company's planned losses by saying it is ''in an investment mode right now. We're involved in a land grab. So we're out there acquiring customers while the acquiring is cheap.'' And Onsale's cost of customer acquisition -- new-customer-related marketing expenses divided by customers added during the quarter -- is a low $18. By comparison, H&Q analyst Genni C. Combes estimates that online bookseller Amazon.com Inc. (Nasdaq, AMZN) pays $20 for new customers and Web-based brokerage E*Trade Group Inc. (Nasdaq, EGRP) forks over $70. Kaplan also boasts that Onsale customers are beginning to buy in large volumes. In the last four quarters, 3,700 customers spent more than $5,000, 45 spent more than $50,000 and one exceeded $1 million. ''Nobody buys $1 million worth of books online,'' quips Kaplan, engaging in his own thinly veiled valuation argument that Onsale should be as richly valued as Amazon, which it isn't.

To: Bald Man from Mars who wrote (6474)	5/4/1998 7:43:00 PM
From: Maverick	Respond to of 74651

MSFT at H&Q Conf. synopsis, part II By Adam L. of San Jose Mercury News. Well, this is a company that consistently cautions analysts to expect worse earnings than it delivers and even talks down its own stock. And in case you hadn't heard, Microsoft is having a small spat with governments across the land and in the nation's capital. As such, the company headquartered in the other Washington doesn't like to draw attention to its market dominance if can at all help it. Asked if Justice Department intervention could delay the launch of Windows 98, which will incorporate the Internet Explorer browser software at the heart of the government's investigation, Herbold replied: ''We have no information on that.'' Whether he has information on Microsoft's expectations of success for Windows 98, we may never know.

To: Bald Man from Mars who wrote (6474)	5/4/1998 7:53:00 PM
From: Maverick	Respond to of 74651

Government is dependent on MSFT products, part III Once a technology laggard, the government ''is leading the charge on NT in some ways, pushing it into more advanced uses that you see in most corporations,'' said Mathew Mahoney, an analyst for IDC Government, a research service in Falls Church, Va. The Air Force is an example of that. In a pilot program, it is beginning to experiment with moving some of its vital command-and-control operations -- which range from mapping battlefields to spotting enemy fighter jets -- away from bigger, more costly computers onto personal computers running Windows NT. ''People in the industry say that Windows NT can take over these applications at far less cost,'' said Col. Richard Picanso, director of the command-and-control computer systems at Hanscom Air Force Base in Bedford, Mass. ''We want to see how much of that is marketing hype and how much of that is real.''

To: Bald Man from Mars who wrote (6474)	5/4/1998 8:04:00 PM
From: Maverick	Respond to of 74651

Microsoft moves soften its aggressive tactics They may help defuse antitrust problems BY RORY J. O'CONNOR AND JODI MARDESICH Mercury News Staff Writers Three times in six weeks, on the eve of a crucial interaction with the federal government, Microsoft Corp. has seemed to flinch. In each case the software giant -- embroiled in an antitrust battle that could redefine the company -- made hasty, technical changes to its licensing practices. Microsoft officials say each change was a business decision, unmotivated by the company's legal troubles. Yet taken together, the moves softened some of the company's most aggressive tactics in its competition with rival Web browsers and content providers. For example, Microsoft says it will no longer insist that content partners promote only the Internet Explorer browser on some parts of their Web sites. Observers agree that the changes leave Microsoft in a stronger position as it battles -- in federal court and the court of public opinion -- the charge that it competes unfairly. By eliminating practices that were hard to explain away, the company can focus attention on what it considers its strongest argument: that Microsoft's competitiveness is good for consumers, because it ensures them the most innovative products. ''Each one of those was a smart move to defuse potential problems on the antitrust front,'' said Rich Gray, a partner specializing in antitrust and intellectual property at Bergeson, Eliopoulos, Grady & Gray, a San Jose law firm. It remains to be seen how well this new posture will work. One of the most important players in the chess match, the Justice Department, has nothing to say about the changes or their potential impact on the pending case regarding Microsoft's promotion of Internet Explorer. Nor do the concessions appear to have sidetracked federal or state antitrust enforcers, who continue pursuing a broader antitrust case against the company. Officials of several states said Thursday they may file a joint case within a couple of weeks -- a time frame dictated by the upcoming release of Windows 98. The Justice Department said its investigation into the company remains open.