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MSFT Up With Tech
The markets are rising in early trading as a solution for Greece looks to be contained. Shares of MSFT opened relatively flat but started rising with the positive tech tape. Upcoming catalysts include second calendar quarter results to be released in July; the company’s Analyst Day at the developer conference in September; Windows Phone 7 / Mango adoption with hardware partner Nokia; strides against current market leaders in cloud computing; entrance in the tablet market at some point; making money in the online business including integration of Skype and improving the search / display business (see below); and continued evolution of Kinect and the next generation Xbox console. The stock currently trades at 7x Enterprise Value / TTM Free Cash Flow, inexpensive compared to historical trading multiples.eMarketer Releases Display And Search Predictions: Microsoft Still Screwed (eMarketer)
Remember the days when marketers wanted nothing to do with social media? Those days are officially over. Facebook will surpass Yahoo in total display ad revenue for the U.S. market this year, according to eMarketer. Google is also predicted to open up a bigger lead in search ad revenues despite Bing’s gains among consumers. However eMarketer says that Microsoft will pass Yahoo in terms of search, with Bing controlling 8% and Yahoo 7.9% of paid-search revenues in 2011.
More Money Being Poured Into The Cloud, Good News For Microsoft (IDC)
IDC forecasts that public IT cloud spending will reach $72.9 billion in four years, up from $21.5 billion last year. That works out to 27.6% compound annual growth rate (CAGR). According to recent surveys, 80% – 90% of all companies will have some aspect of their infrastructure based in the cloud by 2016.
Smartphone Users Now Spend More Time On Apps Than Desktops (Flurry)
Microsoft better hurry up with Nokia smartphones already. Mobile app analytics firm Flurry released a report that indicates U.S. smartphone users now spend more time with mobile applications per day than people do using the desktop and mobile Web. Consumers are spending 81 minutes per day using mobile apps, compared to 74 minutes of web surfing. This growth in mobile app usage clocks in at a 91% increase year-over-year and has come primarily from more sessions per user per day as opposed to growth in average session length.
Microsoft Wants A Tax Holiday To Bring Money Home (The New York Times)
Microsoft has $29 billion in cash offshore and is looking for a “tax holiday” to bring the money home. The software giant is paying the $8.5 billion for Skype with offshore funds. Microsoft is just one of many major U.S. corporations, including Apple and Google, that have huge stockpiles of cash offshore. The companies are asking for a one-year rate reduction on international revenue from 35% to 5.25%, saying the break would inject much-needed trillions into the U.S. economy. Lovely thought. But how would use of cash get enforced?
On The Heals Of Apple, Microsoft Upgrades Its Cloud-Storage Offering (CNet)
Microsoft is updating its SkyDrive cloud-based storage service, providing a faster and cleaner user experience by using HTML5 technology (and dropping Silverlight) as well as hardware acceleration. Not surprising, this comes two weeks after Apple launched its iCloud initiative. Matt Rosoff at Business Insider says the Dropbox knock off is still insanely frustrating to use.
Skype Whacks Executives Ahead Of Deal Closure (Bloomberg and Business Insider)
On the heels of the acquisition approval, Skype is firing senior executives before the deal closes; a move that, on the surface, reduces the value of their payout. Henry Blodget at Business Insider talked to a current Skype investor, who says the theory that Skype fired the execs to avoid deal payouts is a bunch of crap. Rather, Skype’s relatively new CEO Tony Bates finally completed a thorough review of the company’s executive team and that he had made the changes to reflect the team he wanted going forward.
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