THE MICROSOFT INVESTOR: Kinect Not Necessarily In Demand But More Likely In Shortage

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MSFT Off As Cisco Sinks Market
Cisco‘s abysmal outlook is tanking the market in early trading with shares of MSFT off nearly 2%. Upcoming catalysts include continued upgrade cycles of Office 2010 and Windows 7; any entrance into the tablet market (even just as an operating system); Windows Phone 7 adoption; strides against current market leaders in cloud computing; and holiday sales of Kinect. The stock currently trades at 8x Enterprise Value / TTM Free Cash Flow, inexpensive compared to historical trading multiples.

Microsoft Sells Just 40K Phones On Opening Day (The Street)
Microsoft sold just 40,000 Windows Phone 7 phones on Monday’s launch according to sources at The Street. This could be the fact that nobody wants a Windows Phone 7 phone. We’ll see in the next few months and how holiday sales are for the company. Jay Yarow at Business Insider puts this into context: Apple had 600,000 pre-orders for iPhone 4 on its first day and it sold 110,000 per day on average last year.

Facebook Crushing Competition On Display Ads (eWeek)
Facebook led Yahoo, Microsoft, Google and others in display ads, capturing nearly one-quarter of all impressions in the U.S during the third quarter, according to comScore. Facebook‘s increased its market share for display ads to 24%, up from 9% last year, easily swiping the mantle from long-time leader Yahoo. Yahoo Sites took the distance second spot with 11%, ahead of Microsoft Sites at 5% and Google with 3% display ad share.

Kinect Not Necessarily In Demand But More Likely In Shortage (PC World)
Is Microsoft’s new motion-sensor Xbox 360 companion Kinect really selling out? In the UK, where Kinect launched earlier this week, the product will likely sell out in 24 hours due to stock shortages. Note the distinction drawn between “stock shortages” and “consumer demand.” But most are expecting new shipments between now and the holidays. Local Best Buys have sold out of standalone units but had Xbox 360s bundled with Kinect to spare. The local GameStop by contrast had plenty of both.

BlackRock Trims Microsoft Holdings To Under 5% (Reuters)
Investment management giant BlackRock has cut its Microsoft stake by almost 10%, joining several other large investors (Fidelity, T. Rowe) who took a machete to their holdings of the software giant this year as its share price significantly underperformed the market. BlackRock reduced its Microsoft holdings to 425 million shares, or a 4.97% stake, down from 470 million shares, or roughly a 5.5% stake, at the end of the quarter.

Motorola Sues Microsoft Adding To The Rash Of IP Suits (The Wall Street Journal)
Motorola‘s Motorola Mobility is suing Microsoft for alleged patent infringement, just one day after Microsoft filed its second lawsuit against Motorola. Motorola is alleging infringement of 16 patents by a variety of Microsoft products, including its PC and server software, Windows mobile software and its Xbox game-console products. The suits come amid a rash of intellectual-property legal battles involving many high-tech giants.

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