June 2003 - An Update From the Digital World


Settlement of Microsoft/Netscape lawsuit led us to reflect on the evolution of the commercial Internet
In this report we tell a short story of what’s happened to date

Multiple forces appear to be driving a new stage of Internet usage growth
Global broadband adoption and improving user experiences are helping pace momentum

We continue to see Search / Find / Obtain (SFO) as the next "killer application" of the Internet
And recent data related to online music — a natural SFO business — give us the sense that music could be a game-alterer in the market.

Internet-related front- and back-end initiatives from Microsoft could bode well for the company over time
Including the next releases of Internet Explorer, MSN, and Windows (Longhorn), and ongoing developments to the company’s Web services (.NET) efforts.

Our Internet & PC Applications Software Industry View is Attractive
We continue to believe that, at the margin, online is gaining share from offline, that this will occur for some time to come, and that this should benefit the Internet leaders. For our thoughts on companies mentioned in this report, see our company-specific reports.

June 2003 - An Update From the Digital World (13 pages)