Re: Microsoft Internet Investments.

Dan Kohn (
Wed, 30 Jul 1997 13:09:46 -0700

On Tuesday, July 29, I Find Karma <> wrote:

>Not so much overwhelming an observation as it is underwhelmming: for me
>to start a company that could possibly begin to compete with Microsoft,
>I would need tantamount resources (and then some). Not gonna happen,
>not in my lifetime. Billg, you win. I can't win. In fact, at this
>point, I can't break even. Sad part is, I can't even quit the game...

Not only is it hard to imagine direct competition, but many venture
startups today (according to Upside or Red Herring) are evaluated solely
on their potential for eventual sale to MSFT.

On the positive side, Billg is not a bad guy to have financing half your

Also, remember what Schumpeter wrote about creative destruction. Today,
MSFT and INTC seem unassailable (which is why I own lots of both). But,
in the 60's, no one doubted IBM's total dominance, and in the 80's
everyone was sure the Japanese would put American heavy industry out of
business. MSFT's and INTC's profit margins are just too high today not
to create huge forces for market entry. In some garage out there are
the ideas that will eventually bring down (or at least lessen the
dominance of) both of them (and no, Java and the NC ain't it).

For instance, if Billg had gotten Internet religion today instead of
Pearl Harbor Day (12/22/95), would MSFT really seem so impressive? It
might have been too late to beat back Netscape's and Sun's Internet
dominance. (The concept of positive feedback loops and tipping factors
are absolutely fascinating.)

But just as Joe Barrera points out that all revolutions are corrupted,
so all dynasties and empires must fail... (eventually; in the meantime,
I'm still buying).

- dan

Daniel Kohn <>
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