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

To: ToySoldier who wrote (12757)	11/29/1998 9:16:00 AM
From: jim shiau	Read Replies (1) \| Respond to of 74651

Toy, >There is no comparison. IBM generates 5-6 times MSFT's revenue for a reason. Really ? Yes. IBM generates 5-6 times MSFT's revenue, but generate the same profit as MSFT. The reason is simple, IBM is in low profit margin business (7%) and MSFT is in high profit margin business (35%). If you really love to compare revenue, then you should pick GM or EXXON to compare with IBM. By the way, NOVL is a pure software and one product company, and you love it very much. To me, you just bias to MSFT. The information I got are from the following URL. techstocks.com techstocks.com

To: ToySoldier who wrote (12757)	11/29/1998 10:38:00 PM
From: Gerald Walls	Respond to of 74651

MSFt is primarily in the software business Gerald. What percentage of their revenue is in any other sub-sector other than the development of software? How much revenue percentage accounts for MSN? How much revenue percentage are they account for in the entertainment industry (non-software related)? Please elaborate? Let me go and see any perspectus or ask any industry analyst what primary business they are in. I think I know what I'll find. "Software" is not a sub-sector. "Software" is as much of a sector as "hardware" is. In a previous post I named a few sub-sectors of the software sector. There are several more. Go look for yourself if you want MSFT's financials. microsoft.com Please dont compare the diverse sub-sectors that IBM is in to that of MSFT. There is no comparison. IBM generates 5-6 times MSFT's revenue for a reason. Yes. Compared to "software" companies (MSFT included) "hardware" companies (IBM included) have lousy profit margins (36% vs 7% in this case). I notice that although the revenue is weighted heavily in favor of IBM the profit is approximately equal. What's your spin on this? Let me guess. "MSFT profit margins have much farther to fall." An optimist, on the other hand, would say that MSFT's revenues have much farther to grow. So far the optimists have been right with this company and the pessimists have been left holding the bag. Of course, MSFT has three times as much cash as IBM ($17.2B vs $5.9B), has no long term debt whereas IBM has 82% debt-to-equity, and MSFT has ROA/ROE of 27.64%/39.53% vs IBM's 7.7%/32.08%, but I guess that IBM's 0.52% dividend yield makes up for all of that.