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To: Dennis R. Duke who wrote (7402)	11/17/1998 10:54:00 AM
From: pat mudge	Respond to of 18016

Preview of upcoming issue of Wired includes interesting article on Gates: <<< What's Next for Microsoft: 83 Reasons Why Bill Gates's Reign is Over -- in the December Issue of Wired Magazine Business Wire - November 17, 1998 09:46 SAN FRANCISCO--(BUSINESS WIRE)--Nov. 17, 1998--If you thought the antitrust trial in Washington was Microsoft's biggest problem, think again. According to the December issue of Wired, there are a huge number of reasons why Bill Gates's reign is over -- 83 of them to be exact. A Different Road Ahead Wired's Editor-in-Chief Katrina Heron and her staff canvassed leading high-tech experts to research the list which is epic in scope, historic in its implications. It explains, simply and persuasively, why all of the things that made Microsoft the high-tech industry's dominant player up until this moment will work against it from now on. "While the world press is focusing on the Department of Justice antitrust suit, in reality this is but one of the many threats to Microsoft's industry hegemony," says Heron. "Gates faces a complex web of interlocking challenges -- economic, technological and cultural -- which, taken together, foretell a very different road ahead." Wired defines the post-PC, Internet-dominant era as a time of vicious, Darwinian competition. Speed has become as important a weapon as size. Microsoft is nowhere near as nimble as the small start-ups that are attacking it from all sides. The End of Monopolies Other challenges follow from simple economics: no company can sustain such a dramatic growth rate forever. In Reason 33, "Earnings Slope," Wired predicts that investors will make life difficult for Gates when growth in earnings, which has been soaring at around 40 percent lately, drops to a forecast 23 percent in the next five years. "Our expectations of the future -- can they be equal to past performance? No way," COO Bob Herbold concedes. The expansion of the last two decades was based on a near-monopoly in operating systems. In the emerging high-tech markets, monopolies will be hard to come by. "Nobody is going to be a high percentage of all that anybody does on the Internet," says Microsoft president Steve Ballmer in Reason 2, "Monopoly Killer." "No level of investment by us would do that." A New Consensus Wired also sought opinions on Microsoft's problems from some of the industry's most prominent observers. Their tone reflects a new consensus that Microsoft is not invincible. "Component software will do in Microsoft, just as surely as smaller hardware -- the PC -- brought down DEC and IBM," George Gilder of the Gilder Technology Group tells Wired. Another insider, W. Brian Arthur of the Santa Fe Institute, notes that Microsoft is hobbled by the need to make its new products compatible with aging systems like DOS and Windows. "It's like Napoleon trying to take Moscow: the further you go, the longer your supply lines get. A fast-moving start-up with a new technology doesn't have to worry. For Microsoft the problem gets worse every day." Why Bill Gates Stepped Down In a related article, "Why Bill Gates Quit His Job," Wired reports that Gates's de facto retirement from day-to-day business and the elevation of Steve Ballmer to president in July "was a clear acknowledgement of the problems Microsoft faces." James Wallace writes that the quality control has become a problem, with analysts saying that "customer satisfaction has never been as low." In his new role, Gates will pay more attention to product development and to the company's long-term strategy. The December issue of Wired is on sale at newsstands Monday, November 23rd. >>>>

To: Dennis R. Duke who wrote (7402)	11/17/1998 11:41:00 AM
From: Serge Collins	Read Replies (2) \| Respond to of 18016

My take on the Fed and interest rates is this: If the Fed cuts, the markets will pop but soon selloff on profit-taking. The rally will be sustained for a few more weeks after this initial selloff. If the Fed doesn't cut, we will get a sharp selloff followed by a rebound and then trade sideways for a while. There is no doubt that the Fed would like to cut rates to further stabilize things, but Greenspan must be getting worried again about "irrational exuberance". I think this will way on the Fed's decision but if my scenario plays itself out, it won't matter one way or the other. Therefore, the Fed should cut rates to help Asia and other parts of the world, as well as domestic financials, to further dig themselves out of their mess. Just my opinion.