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MSFT Down Post-Earnings
The market is up on favourable economic data: home sales blew past expectations as did the Richmond Fed. Shares of MSFT are off as investors take recent profits. Catalysts for the stock include Windows 8, Windows Server 8, Office 15 and Windows Phone 8; expansion in the smartphone market with primary hardware partner Nokia; strides in cloud computing; profitability in the online business, including integration of Skype; and continued evolution of Kinect and next generation Xbox. The stock currently trades at 8.2x Enterprise Value / TTM Free Cash Flow. Check out the Business Insider’s updated Microsoft model.Verizon Putting Marketing Dollars Behind Microsoft To Fight Off Apple And Google (Bloomberg)
Verizon plans to put its marketing weight behind Microsoft next mobile phone software, according to the Verizon CFO Fran Shammo. The company wants a third strong software competitor in the mobile market where operators pay hefty subsidies for smartphones like the iPhone. “We’re really looking at the Windows Phone 8.0 platform because that’s a differentiator. We’re working with Microsoft on it,” Shammo said in an interview following Verizon’s earnings conference call last week.
Make No Mistake, Microsoft Is An Enterprise Company (Business Insider)
Last week’s earnings showed what we all should know: Microsoft is an enterprise company. Its enterprise business units are now bigger than Windows. And that’s not even fair because enterprise customers are the biggest buyers of Windows anyway. Xbox sales are a tiny fraction and Bing is a joke. The company’s consumer online losses are huge (the company burned another half a billion online), but it’s a drop in the bucket compared with its real business. As long as the enterprise loves Microsoft, the company has a bright future.
Microsoft Axe Makes The Case For Facebook To Buy Bing (Barron’s)
Rick Sherlund with Nomura Equity Research says the Facebook IPO could be a good thing for Microsoft. He muses that a swap of Bing could, at the very least, remove a problem for Redmond. “Microsoft loses $2.5 billion a year with Bing, and that’s a 7-percentage-point hit to operating margin. Investors have not been a fan of that line of business for a long time. They just don’t see the rewards,” he says. Why does Microsoft even need to be in search? If Microsoft unloaded Bing on Facebook, it would still be able to monetise its services and without all the headaches. It’s a rumour that just won’t die.
This Is How Microsoft Will Keep The iPad Out Of Big Business (Business Insider)
Microsoft is raising prices for big companies who want to use iPads to access Windowsapps. This comes right at the time when its own competing tablets are coming out. This is a perfect example of why Microsoft will be so hard to displace from big enterprises. Big customers sign multi-year Microsoft licence agreements. Once locked in, Microsoft can tweak the rules with each new version of its software, stalling competitors, pushing new products, and gradually raising prices. So that’s exactly what they are doing.
Microsoft Flips The AOL Patents To Facebook (Bloomberg)
Facebook is once again beefing up its intellectual property arsenal by paying $550 million for some of the patents Microsoft recently agreed to buy from AOL. Facebook will obtain about 650 AOL patents and applications, as well as a licence to AOL patents and applications that Microsoft will purchase and own. Facebook, will presumably use those patents to sue the pants off Yahoo.
Motorola Won Ruling That Could Ban Xbox In The U.S. (Bloomberg)
Motorola won a U.S. International Trade Commission judge’s ruling that bolsters its chances of blocking imports of Microsoft’s Xbox from entering the U.S. ITC Judge David Shaw said yesterday that Microsoft was violating four of five Motorola patents. The judge’s findings are subject to review by the six-member commission. The ruling gives Motorola leverage in its patent fights with Microsoft that may force settlement talks to avoid an Xbox import ban. Motorola filed in retaliation for Microsoft lodging patent-infringement claims against Motorola phones that run Android.
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