THE MICROSOFT INVESTOR: More Insight Into Office Going Cloud As The Architect Walks

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MSFT Off As Market Struggles
Shares of MSFT are down marginally today as the market struggles with mixed earnings reports. 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; any adoption of Azure (cloud computing); and gamer reaction to Kinect. The stock currently trades at 9x Enterprise Value / TTM Free Cash Flow, inexpensive compared to historical trading multiples.

Microsoft’s Software Visionary Leaving (The New York Times)
Ray Ozzie, Microsoft’s Chief Software architect and big proponent of taking Office to the cloud, is leaving the company. This announcement is the latest in a string of high-level departures from the software giant. With Ozzie gone and Gates no longer involved on a daily basis, it’s not clear who there would have both the gravitas and political capital to get the entire company to change course should it have to. Again.

Microsoft Office Event Today Will Hopefully Give Us An Alternative To Google Docs (CNet)
Just as Ray Ozzie (the leader of Windows Live and proponent of taking Office into cloud) is leaving, Microsoft’s cloud computing effort is expected to get a little clearer today. The company’s Office Division is hosting an event in San Francisco where the company has a chance to undo the botched Office Web Apps launch from earlier this year, and instead introduce a real Microsoft alternative to Google Docs. Watch the webcast here, or catch the recap of the event at SAI.

Microsoft Is Helping Bailout The Advertising Industry (All Things Digital)
Advertising is slowly coming back, and Microsoft’s billion dollars of marketing money could help move it along quite nicely.  That’s what Steve Ballmer and company will spend to push two big consumer tech rollouts in the coming months: Windows Phone 7, its attempt to claw back share from Apple and Google, and Kinect, its attempt to push its Xbox 360 platform past Sony and Nintendo. Read more here.

Microsoft Announces 17 Kinect Games For Launch; Not Bad (Mashable)
Microsoft announced that 17 games will be available on the November 4 launch of Kinect for Xbox 360. Some titles include: Kinect Adventures, Kinectimals, Game Party: In Motion, Harry Potter and the Deathly Hallows — Part 1 The video game and Your Shape: Fitness Evolved. This is Microsoft’s answer to the Nintendo Wii’s motion controllers, which helped turn that console into one of this generation’s most popular gaming devices.

Who’s Affected If WP7 Actually Succeeds? (GigaOm)
Microsoft’s Windows Phone 7 won’t hit the shelves until next month, but the OS is already drawing accolades. If the new platform really does restore Microsoft’s lost relevance in mobile, who will be affected? Colin Gibbs at GigaOm believes that Microsoft could replace the Blackberry in the enterprise if successful (highly unlikely unless RIM drops Symbian / Blackberry OS for WP7). It could also be a blow to Hewlett-Packard who bailed out Palm and is banking on that platform for it’s mobile strategy. Motorola dropped Windows for Android last year and Microsoft launched a patent-infringement suit. There are actually quite a few losers.

Daily Trader: Put / Call Ratio Suggests Bullish Sentiment In MSFT (Market Intellisearch)
MSFT options saw interesting call activity yesterday. A total of 45,170 put and 148,630 call contracts were traded raising a low put / call volume alert. Yesterday’s put / call ratio is 0.30. There were 3.29 calls traded for each put contract. This ratio is often used to measure investor sentiment (low suggesting sentiment is bullish). MSFT is trading above the 50 day moving average and lower than the 200 day moving average.

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