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Microsoft - thrive, strive or dive?

Guy Kewney AnchorDesk

Published: 05 Apr 2000 14:34 BST

It is the week when the world's financial markets finally stopped kidding each other about the "value" of the "new economy", when the Nasdaq dropped sharply, and the TechMARK dropped heavily. And it is the week when Microsoft stocks actually fell substantially, too; but I'm not sure that the world's investors have spotted that Microsoft is not just a solid, reliable investment which is under a bit of a legal cloud.

The fact is that first and foremost, this week's events will have absolutely no effect whatsoever on the software you and I will buy over the next two years. Microsoft's plans for Windows and Windows 2000 and Office are all laid for that period, and it really doesn't matter a bit whether the corporation thrives or strives or dives; those products will grind on. They simply have to.

If Microsoft appeals, as it says it will, then it will drag on even longer; but the product plans won't be affected. We know where Windows is going, and it's just a question of getting the software to work. We know what to do with Word and Excel. We know how Active Directory must move. If the company is split up then different bits of Microsoft will work on the parts of these products. If it isn't, then the different divisions inside Microsoft will be as far apart from each other as they would if they were different companies.

But what will change, is the financial community's perception of Microsoft stock.

For the first time, I'm hearing analysts asking, not whether the stock is going to rise or fall, but whether Microsoft earnings can be expected to rise to a level that justifies the share price. Nobody has ever asked that before. Why would you?

Read on....