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To: Perry Ganz who wrote (120399)	4/24/1999 8:26:00 AM
From: Chuzzlewit	Respond to of 176387

Perry, some general comments re: MSFT 1. You will find that the balance sheet contains a liability item labeled "unearned revenue" totaling $809MM in June 1998 which increased to $992MM in March 1999. This is the account where the $400MM is booked. The account is also sometimes called "deferred revenues". This kind of accounting is routine in companies that collect cash for services they have not yet completed, so you cannot simply add $400MM to last quarter's sales without subtracting the portion of deferred revenues that were recognized as income items last quarter. If you didn't do that you would find deferred revenues dropping to $592MM which would be a huge red flag! 4. Trial expenses may indeed be the cause of this increase. If that is the case it would not worry me because I would characterize as a one time issue. And I thank you for your comments about my breeding. TTFN, CTC