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Motley Fool: Unanswered Questions at Microsoft re Quarterly Report

Oct 23, 2000, 16:21 (5 Talkback[s])
(Other stories by Richard McCaffery)

"Operating income decreased, which is disappointing, but fell as the result of higher operating expenses, mainly in research and development and sales and marketing. Microsoft's operating margins fell to 47.9% from 51.8% a year ago, and margins may very well shrink as the company faces tougher competition from Linux and the Internet."

"Analysts are focused on PC demand in the coming quarters, since it's a useful gauge of short-term expectations. We're not. Over the long term, the number of PCs in use will grow. We're interested in following up on these issues:

  • What the heck is Microsoft's "bet the company" initiative, .Net? I vaguely understand it's a software platform that would allow Microsoft's applications to function on any device, but I have no idea whether there is an actual product that can do this or what incentive customers truly have to implement it. At this point, I wouldn't pay a dime for a piece of those future cash flows, yet it's an important part of the company's strategy.
  • What kind of threat does the Windows server platform face from Linux? With Linux growing hand-over-fist in the corporate server environment, it's clearly a threat, but how should the long-term investor assess it? ... Is Linux a long-term threat on the desktop as well?"

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