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MSFT Getting Hit Hard
Stocks are under early pressure as jobless claims unexpectedly increase. The selling effort is relatively broad based, but tech stocks and financial plays hit the hardest. Shares of MSFT are nearly 2%, exponentially more than the rest of tech. Upcoming catalysts include fiscal third quarter earnings to be announced on April 28 at 5:30pm Eastern Time; any entrance in the tablet market; Windows Phone 7 adoption with hardware partner Nokia; strides against current market leaders in cloud computing; gaining search market share with Bing / Yahoo! partnership; and continued momentum of Kinect. The stock currently trades at 8x Enterprise Value / TTM Free Cash Flow, inexpensive compared to historical trading multiples.Bing Represents Only About 3% Of Microsoft Stock Value
(Trefis via Forbes)
Microsoft’s Bing is seeing declining revenues from its search business. Revenue per search (RPS) refers to the average advertising revenue generated by Microsoft for every 1,000 searches. RPS is calculated based on two metrics: click-through rate (CTR) and cost per click (CPC). Trefis research firm estimates that Bing’s RPS has declined from around $14.70 in 2008 to around $13.30 currently. Bing constitutes only around 3% of Microsoft stock so it would not likely justify any upside or downside accordingly.
PC Sales Down Which Is No Good For Microsoft (Businessweek)
Research firm IDC says that global PC shipments dropped 3.2% in the first quarter compared with last year. That’s the first annual decline since Q3 of 2009, when the economy was just picking up from the deepest recession in decades. IDC had previously expected modest growth of 1.5%. Matt Rosoff at Business Insider says that’s bad news for Microsoft, which still relies on Windows and Office for the lion’s share of its revenue and profit.
Microsoft Starts To Get It, Kinect SDK Coming This Spring (VentureBeat)
A beta of the software development toolkit is coming for people who want to use the Xbox Kinect motion sensor with Windows. The plan is to roll out a version of this SDK for academics and hobbyists some time this spring with support for two-person skeletal tracking, making two-player games or Windows applications a distinct possibility. The goal is to support a growing community of academic researchers and enthusiasts who want to take Kinect to the PC to launch creative new motion-sensing applications.
Microsoft Previewed Plans For Next-Gen Windows Phone (Microsoft Blog)
Microsoft unveiled plans for the next version of its Windows Phone platform. Multitasking, faster Web browser and improvements that could make for much better apps will be added to the next generation of its mobile operating system. Though consumers have been slow to latch on to Windows Phone, analysts believe it will continue to grow; last week, Gartner Research predicted Windows Phone will surpass Apple’s iPhone and Research in Motion’s BlackBerry platforms by 2015.
Gartner Is Out Of It’s Mind To Think Microsoft Will Have No Tablet Presence By 2015 (BetaNews)
There is Apple’s iOS, there is Google’s Android, there is Nokia’s and Intel’s MeeGo, there is HP’s WebOS, there is Research in Motion’s QNX. Windows would go in the “other operating systems” category, which Gartner expects to have 0.2% of the market in 2015. The research firm’s recent media tablet forecast shows the analyst firm doesn’t see Microsoft releasing a tablet/tablet OS anytime soon and certainly not by 2015. Gartner is crazy.
Internet Ad Revenues Reached $26 Billion In 2010, Search Half Of That (TechCrunch)
IAB released U.S. Internet advertising revenue figures and sales jumped 15% to $26 billion in 2010, setting a record high. Search still made up 46% of that total, followed by display ads at 38%. But display advertising grew twice as fast as search (24% growth versus 12%). Video advertising (part of display) now makes up 5% of the total and jumped 40% to $1.4 billion. This was also the first year that the IAB is estimating mobile display advertising revenue between $550 million and $650 million. Internet advertising surpassed newspaper ads in the U.S. last year ($22.8 billion) and is now second only to TV ($28.6 billion).