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MSFT Sideways With Volatile Market
Stocks were mixed as the European Central Bank said it would buy bonds to prop up the region’s struggling banks while new applications for unemployment benefits rose slightly last week, below expectations. The market is also processing the loss of icon Steve Jobs (see below). Shares of MSFT are currently climbing up with the market after Obama’s speech on raising taxes on the rich. Upcoming catalysts include first fiscal quarter earnings announcement on Thursday, October 20 at 5:30pm ET; Windows 8 and entrance into the tablet market; Windows Phone 7 / Mango rollout (see below) and adoption with hardware partner Nokia; strides against current market leaders in cloud computing; making money in the online business, including integration of Skype and improving the search / display business; and continued evolution of Kinect and next generation Xbox console (see below). The stock currently trades at 7.4x Enterprise Value / TTM Free Cash Flow.
Microsoft Going Round Two With Yahoo (Reuters)
Microsoft is considering a bid for Yahoo, resurfacing as a potential buyer after a bitter and unsuccessful fight to take over the Internet company in 2008. Seems over the past few weeks a number of companies have shown interest in buying some or all of Yahoo including large technology and media companies, private equity and international companies. Let’s see if the Goldman Sachs bankers can get it right this time around. If anything, the combined company wold have the most unique visitors on the web.
You Never Get A Second Chance To Make A First Impression, Unless You’re Microsoft (BusinessWeek)
Windows Phone 7, Microsoft’s attempt to claw its way back into the lucrative smartphone arena, was released a year ago to respectful but hardly adulatory reviews. And not good enough to go head-to-head with Apple and Google. But perhaps now it is. Mango is more polished and potent contender. The new Windows Phone software began going out to existing users as a free upgrade last week; new handsets from manufacturers including HTC and Samsung will begin showing up shortly. And then there’s Nokia.
Xbox Is Now A TV Box (The New York Times)
Microsoft has signed deals with Comcast, Verizon and a bunch of other TV and video providers to bring more video to Xbox Live. It allows people to watch programming they are paying for separately through Comcast or Verizon or another TV service providers. Essentially same programming and cost, but different interface. The key selling point being that people will not have to deal with multiple set-top boxes or remote controls. It also means much harder going for newer interactive TV providers Google TV and Apple TV, who are nowhere close to the Xbox installed base of 50+ million worldwide.
Bill Gates Mourns The Loss Of Steve Jobs (Business Insider)
Microsoft co-founder Bill Gates has released a statement on Steve Jobs: “I’m truly saddened to learn of Steve Jobs’ death. Melinda and I extend our sincere condolences to his family and friends, and to everyone Steve has touched through his work. Steve and I first met nearly 30 years ago, and have been colleagues, competitors and friends over the course of more than half our lives. The world rarely sees someone who has had the profound impact Steve has had, the effects of which will be felt for many generations to come. For those of us lucky enough to get to work with him, it’s been an insanely great honour. I will miss Steve immensely.”