``The growth rate of the company will not be as high in the future as it has been in the past,'' Microsoft chairman Bill Gates declared near the end of an annual day of presentations that has become known as a forum for gloomy financial scenarios. But despite the somewhat perfunctory warnings Gates said Microsoft was ``in the best position of any technology company,'' and other top executives were equally upbeat about prospects for the coming year with revenues driven by its core business of Windows computer operating systems and office applications.

Chief financial officer Greg Maffei was the main bearer of bad tidings, warning of a host of ``scary'' trends that could derail what has become the world's most valuable company. For example Maffeisaid the Japanese market, which accounts for 10 per cent of Microsoft's $14.5 billion in annual revenue, is ``very, very depressing'' and getting worse.

Microsoft's ability to reduce its fixed costs further is limited, he said, and new generations of ever-cheaper personal computers generate less software revenue per unit. The year 2000 bug adds more uncertainty to the picture, he said, with many companies likely to divert resources that otherwise might be spent on new Microsoft software.

Maffei even gave alternative presentations of the company's earnings to more fully factor in outstanding stock options in an effort to show the company's growth has been overstated and its shares are overvalued.

``You look at the great stuff we do, and you look at the great year we had, but you do get drawn back to this reality: Fiscal '99 will be a hell of a lot tougher,'' he said. ``You don't look anywhere out in the market place and see anything where it looks easier in fiscal '99 than in fiscal '98.'' But analystswere unconvinced. ``We have heard this all before,'' said Rick Sherlund of Goldman Sachs. ``They have been giving these warnings for 10 years, and I'm not sure that even they believe it.''

Analysts saw little reason to adjust expectations the company's earnings will grow by a little over 20 per cent in the coming year ending July 1, 1999, compared with 35 per cent excluding a onetime charge in the year just ended.

Executives made little mention of the landmark antitrust lawsuit against the company scheduled for a trial beginning September 8.

A company lawyer expressed confidence that a recent appeals court decision had undermined much of the government's case, and chief operating officer Bob Herbold said the massive publicity had done little to hurt Microsoft's generally positive image.

Executives said the just-launched Windows 98 upgrade was exceeding expectations and was likely to match sales of Windows 95 from three years ago, at least over the first three months.