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MSFT Moves With The Market
Stocks rose on better than anticipated economic data this morning but tanked midday. Shares of MSFT are trading sideways. Upcoming catalysts include upgrade cycles of Office 2010 and Windows 7; any entrance into the tablet market; the launch of Windows 7 mobile; 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.
Microsoft / Yahoo! Search Partnership Could Mean Upside (Forbes)
The search alliance between Yahoo and Microsoft could boost average search ad rates by 78% measured on a cost-per-click basis, according to a recent study by digital media services company GroupM with CPC rates will stabilizing at 13% – 23% above current levels as the partnership gives advertisers a bigger search platform to reach consumers. Microsoft receives 12% of search revenues generated through Yahoo! during the first five years. That could mean negligible upside for Microsoft, but upside none the less.
Microsoft Pulling Projects That Don’t Work Is A Step In The Right Direction (ZDNet)
Microsoft realises that it doesn’t have to do it all. The recent decision to transition Windows Live Spaces (blogging platform) customers to WordPress is a sign that Microsoft is working to kill projects that don’t necessarily make sense in the bigger picture. Toss in the Kin (which may not have been Microsoft’s decision) and there’s a willingness to pare back on projects in Redmond. Now once can argue that Microsoft shouldn’t be sweating things like Zune and even search to some degree. But showing that it doesn’t have to reinvent the wheel every time is a positive development overall. Now if it could just invent the proverbial wheel, they’d be all set.
LG And Microsoft Team-Up In Cloud Computing (Reuters)
South Korea’s LG Electronics signed a partnership deal with Microsoft on cloud computing and virtualization. Under the pact, LG will introduce monitors integrated with Microsoft software. The monitors will function as virtual computers, allowing multiple users to run programs off one standard PC. Virtualization refers to technology that allows one computer to perform the work of many machines. The alliance will primarily target the market for educational institutions. It’s going to be a long, rough road Microsoft if these are the initiatives you’re installing.
Microsoft Still A Top 10 Place Graduates Want To Work (Business Week)
Google being the number one in the latest Universum ranking of the most popular employers rated by young people. “Google is a place where you can tackle big problems,” said a Google talent manager. “For all employees, there’s a real sense that people are working on things that could change the world.” Rounding out the top five are the Big Four accounting firms followed by Procter & Gamble, Microsoft, Coca-Cola, J.P. Morgan and Goldman Sachs. Apple was new to the list breaking into the top 30.