``Nothing like a monopoly to get investors to cheer you on''

[Charles Behney <charlesaugust@theriver.com>]

http://nytsyn.com/IMDS%7CCND7%7Cread%7C/home/content/users/imds/feeds/nytsyn/1998/11/06/cndin/8046-0874-pat_nytimes%7C%7C/home/content/users/imds/feeds/nytsyn/1998/11/06/cndin/8041-0869-pat_nytimes%7C%7C

Wall Street loves a Sure Thing. How can you make Linux a darling of stock
analysts? Will MS sue Caldera and Red Hat, a la the Halloween document?  This
play would work for the Street, and retard some IT decisions. But in the long
run, it will work against them, if only because the adverse publicity
outweighing any market share gains.

CAB


Microsoft's a `Beast,' Gates a `Bully;' Market Shrugs

                 ANNE MARIE SQUEO
                 c.1998 Bloomberg News

                          WASHINGTON -- As the nation's antitrust cops tell it,
Microsoft
                 Corp. Chairman Bill Gates is a thug scheming to dominate the
world's
                 computer systems. The response from investors, though, is a
collective ``So
                 what?''

                          Though the outcome of the antitrust case against the
world's largest
                 software maker could completely alter the company's business --
its very
                 structure if a break-up is ordered -- Microsoft shares continue
to outperform
                 the stock market. Since mid-May when antitrust enforcers sued
the software
                 giant, shares have outrun every major U.S. index, including the
Dow Jones
                 Industrial Average and S&P 500.

                          ``Nothing like a monopoly to get investors to cheer
you on,'' said Bob
                 Djurdjevic, president of Annex Research, a Phoenix-based
high-tech
                 consulting firm. ``On the basis of pure financial logic, the
fundamentals are
                 sound. Monopoly pays.''

                          Investors rattle off a string of reasons, including
the lack of surprises so
                 far in the trial and a grinding legal process that could take
years to yield a
                 resolution. In the meantime, investors are happy to reap the
lucrative rewards
                 from Microsoft's allegedly cutthroat business practices and
industry-dominant
                 Windows computer system.

                          A case in point: investors cheered when the company
reported
                 better-than-expected fiscal first quarter earnings Oct. 20, the
day after the
                 antitrust trial began in a Washington courtroom. Gates'
videotaped denial he
                 knew about the software giant's hard-ball tactics was
contradicted, the
                 government said, by evidence from the company's own electronic
mail.
                 Microsoft's stock jumped about 10 percent.

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