Analysis OF THE EQUALY SLALETMETAL, HIDDEN LOSSES, and Vil- Balance_ STEEL LIADMIL Microsoft has undoubtedly been the most successful software firm ever . Betwen firm's revenues increased from $ 2 . 8 billion to $ 23 .0 billion , and its earnings from billion . Over the two year period from 1998 to 2000 , its stock price increased for almost $ 120 , giving it a trailing P / E ratio of 66 and a market capitalization at the market bubble of over half a trillion dollars . By 2005 , Microsoft was trading at $ split basis ) with a market capitalization of $ 275 billion and a trailing P / E ratio of Microsoft's success has been due to a strong product , market positioning , and marketing . In terms of the buzzwords of the time , Microsoft has significant " kn combined with dominant market positioning and network externalities . These* on its balance sheet , and accordingly the price- to - book ratio was over 12 in 200 maintain the knowledge base , Microsoft had to attract leading technical expert option packages , with consequent costs to shareholders . Unfortunately , GAAP