Another day, another dollar.
Unfortunately for Microsoft, the company lost about 25 billion in market value before the bell this morning after reporting that it's next quarter's expectations missed analyst's targets for Q3.
Now every company has it's problems, but with a 20% drop over the past 5 years, while the S&P 500 gained about 12%, Mr. Softy has been scrambling to keep up with the likes of Apple and Google, where innovation and user experience are proving to be more lucrative than dominating the desktop which Microsoft had done all through the 90's. The world is shifting towards the Internet and open source, while in the past, Microsoft focused on squeezing profits from it's Windows OS by forcing users to use it's products and driving out competitors such as Netscape and RealPlayer through monopolistic practices.
As online music and search continue to grow at mind-boggling rates, it's hard to understand how tech guru Bill Gates underestimated the importance of these trends. Even with his renewed focus and urgency on MSN, Mr. Softy has quite a bit of ground to cover to take a bite out of the 70% US search engine market share pie that Google and Yahoo collectively enjoy.
However, with a cash hoard of about 35 billion (and consistently generating over 1 billion every month), MSFT is still a threat and has the ability to get back into the game by using that capital for growth, either organic or through acquisition. But with more and more shareholders losing patience, Microsoft better figure out something quick, as the days of being a Wall Street darling might just be a search that cannot be found.
Now every company has it's problems, but with a 20% drop over the past 5 years, while the S&P 500 gained about 12%, Mr. Softy has been scrambling to keep up with the likes of Apple and Google, where innovation and user experience are proving to be more lucrative than dominating the desktop which Microsoft had done all through the 90's. The world is shifting towards the Internet and open source, while in the past, Microsoft focused on squeezing profits from it's Windows OS by forcing users to use it's products and driving out competitors such as Netscape and RealPlayer through monopolistic practices.
As online music and search continue to grow at mind-boggling rates, it's hard to understand how tech guru Bill Gates underestimated the importance of these trends. Even with his renewed focus and urgency on MSN, Mr. Softy has quite a bit of ground to cover to take a bite out of the 70% US search engine market share pie that Google and Yahoo collectively enjoy.
However, with a cash hoard of about 35 billion (and consistently generating over 1 billion every month), MSFT is still a threat and has the ability to get back into the game by using that capital for growth, either organic or through acquisition. But with more and more shareholders losing patience, Microsoft better figure out something quick, as the days of being a Wall Street darling might just be a search that cannot be found.
posted by nitty at 12:08 PM
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