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MSFT Down As Market Wanes
The markets are under pressure in early trading as jobless benefit claims rose. Shares of MSFT are trading down marginally. Upcoming catalysts include third quarter earnings release on Thursday, October 28 at 5:30pm ET; upgrade cycles of Office 2010 and Windows 7; any entrance into the tablet market (even just as an operating system); the launch of Windows 7 mobile yesterday; any adoption of Azure (cloud computing); and gamer reaction to Kinect. The stock currently trades at 8x Enterprise Value / TTM Free Cash Flow, inexpensive compared to historical trading multiples. Remember The Gaming Market? Microsoft Just Might Have A Chance In Mobile (VentureBeat)
Microsoft stands a chance in the mobile market. Remember in the late 1990s, there was a huge race to the living room with Microsoft deciding to enter the gaming console business that was dominated by the Sony Playstation. Pundits laughed and claimed failure. 10 years later, Xbox 360 is outselling the Playstation 3 and Microsoft sells more games per console than Nintendo. Xbox is profitable when including Microsoft’s game sales, and it is one of the three top consoles in the world.
Microsoft May Come Roaring Back With WP7 (eWeek)
Given the early positive buzz on Windows Phone 7, Microsoft may come roaring back in 2011, possibly ascending to 15% market share or more (Windows Mobile has 11% share according to comScore). Windows Phone 7 may nibble at share from Android and iPhone the way Android nibbled at share from iPhone and RIM. The phones have to hit the market and Microsoft and its partners must execute. But it’s a start.
Microsoft And Facebook Team Up In Search (CNet)
Microsoft’s Qi Lu, president of Microsoft Online Services, and Facebook founder and CEO Mark Zuckerberg announced an extension of a long-running partnership to feature Facebook profiles and a “liked by your friends” section. This takes advantage of the way publishers have implemented Facebook’s “like” button on their sites. Microsoft’s Facebook stake maybe not so crazy after all.
Power Shifting From Search To Social (Business Insider)
Today’s deal between Facebook and Microsoft, which allows Microsoft’s Bing search engine to incorporate your Facebook “like” data into its relevance rankings. Matt Rosoff at Business Insider believes this illustrates how the balance of power on the Internet is shifting from search to social networking. Microsoft got interested in search in 2003 for a lot of reasons, not least because it saw how Google was shaping the behaviour of Internet users. Google’s algorithm will continue to be great when searching for pure information with no particular agenda. But what about figuring out what movie to see this weekend, Matt got that answer from his Facebook friends.
Microsoft And Alibaba Team Up In China (The Wall Street Journal)
Microsoft and Alibaba (Chinese e-commerce company) are testing a new search service that could offer Chinese users an alternative to major player Baidu and to Google. A beta of the new Etao search site came online this past weekend teaming up Alibaba’s e-commerce search engine with a Chinese-language edition of Microsoft’s Bing search engine. The new site joins the search engines on Alibaba’s current e-commerce sites Taobao.com and Alibaba.com and drives people to the Alibaba.com online retail store.
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