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Which competitors worry Bill Gates

Bill Gates made a list for financial analysts this week.

If Bill Gates were to keep an enemies list, Netscape Communications' would top the list. Lotus Development and Japan's Just Systems would also make the cut. But surprisingly Oracle and Sun wouldn't show up for a year or so.

Microsoft Chairman Bill Gates told Wall Street analysts this week that he figures it will take Microsoft at least a year to catch up to Netscape. In the meantime, he says he's not concerned with database powerhouse Oracle, nor with Sun Microsystems, despite its immensely popular Java programming language.

"Sun is not a competitor of ours," Gates said. "Netscape is a competitor of ours. Lotus Notes is a competitor of ours."

And Oracle's dominance in database software isn't on Gates' worry list for at least a year. "The Internet and Lotus Notes are 100 times more important [than Microsoft's efforts to market its SQL Server database software] in the next 12 to 18 months," Gates said. SQL Server competes with Oracle's flagship database. He did say he admires Oracle's ability to maintain high revenue growth.

Gates' musings came in a leisurely conversation after dinner last week with leading financial analysts who follow Microsoft at an annual event hosted to massage Wall Street's expectations about Microsoft's earnings.

While Gates praised management at number one competitor Netscape, he said the company's failure to pursue a browser bundling deal with America Online perplexed him.

"I decided to get the AOL business. I never understood why Netscape didn't go for it," Gates said. "We're sort of confused about what Netscape is thinking. Until six months ago, we knew what they were thinking."

The AOL deal is important because the online service will use Microsoft's ActiveX controls for any content that it creates for the Internet. By creating a larger audience for ActiveX, it helps boost Gates' goal of winning support for ActiveX among multimedia tools vendors such as industry leaders Adobe Systems and Macromedia.

As for Lotus, its Notes is still an annoyance to Gates. He wants to promote interest instead among corporate customers in Exchange, Microsoft's newly released messaging and collaboration software. But that doesn't mean that Gates has gained any respect for IBM, which acquired Lotus Development last year. Gates hasn't cared much for Big Blue since the two companies went their separate ways over operating systems in a break-up that left Microsoft with Windows NT and IBM with OS/2.

As for applications, Microsoft sales mavens are worried about Corel's recent price-chopping promotions of its WordPerfect Suite, but Gates says Microsoft technologists pay no attention to Corel. Instead he named Just Systems, the company that holds the lead in Japan over Microsoft's Word, as Microsoft's biggest competitor in word processing.

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