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MSFT Up With The Markets
Stocks are in the black in early trading as data showed an improving labour market. Shares of MSFT are up, in line with the rest of tech. Upcoming catalysts include second calendar quarter results to be released the third week in July; the company’s Analyst Day at its new developer conference (BUILD) in September; Windows Phone 7 / Mango adoption with hardware partner Nokia; strides against current market leaders in cloud computing; entrance in the tablet market at some point; 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. The stock currently trades at 8x Enterprise Value / TTM Free Cash Flow, inexpensive compared to historical trading multiples.
How Do You Like The Skype Acquisition Now? (Seeking Alpha)
Facebook presented a new video chat feature available within the Facebook interface. The feature is powered by Skype. And no one is more excited than Steve Ballmer. When the Skype acquisition was announced by Microsoft, you were hard pressed to find an analyst or investor who praised the move. The reality is that the Skype move was brilliant for many reasons; the integration possibilities with everything from mobile phones to Xbox to desktop software. But most importantly, deepening the partnership with Facebook.
Microsoft Hedges Mobile Bet Amidst Smartphone Battlefield (Seeking Alpha)
The smart phone business resembles a war field: Research In Motion is dying, Android is taking no prisoners, Apple is holding its own with rumours of a new iPhone launch very soon. Amidst the rubble, Microsoft’s mobile prospects have been looking stronger and stronger. Although Windows Phone activations are essentially nonexistent, the company has been pursuing a dual-track strategy of leveraging its patent portfolio to create cash flow while developing an OS roadmap aimed at making Microsoft-powered handsets competitive and compelling.
Samsung Is Microsoft’s Latest Conquest With Android Royalty Payments (Reuters)
Having cornered a handful of small manufacturers into paying royalties, Wistron Corp. being the latest, Microsoft is now setting its sights on substantially bigger game: Samsung. The software giant is asking the company to fork over royalty payments of $15 per Android device to cover patented technology owned by Microsoft but is willing to lower the price to $10 if Samsung deepens its commitment to Windows Phone. The weird thing is, Samsung and Microsoft already have a broad patent cross-licensing deal which they signed way back in April 2007.
Hulu Owner Says Owners Are Committed To Selling (Bloomberg)
Disney CEO Robert Iger said that the owners of Hulu are “committed to selling.” He would know. Hulu’s owners include Disney, News Corp. and Comcast’s NBC Universal. Bankers for the video streaming site have met with Google, Yahoo and Microsoft as the company explores a sale. A sale would eliminate a conflict by setting up Hulu as an independent buyer of movies and TV shows for online viewing. The company could fetch more than $2 billion.
Microsoft Heads To The Cloud To Fight Off Office Churn (The New York Times)
Halting Office productivity defections to the likes of Google Apps is a top priority at Microsoft. The company’s response is Office 365, a cloud-based version of Microsoft’s e-mail, whiteboard collaboration software and word processing, spreadsheet and presentation programs. The subscription renewal rates to Google Apps are higher than 90% and for larger companies the rate is nearly 100%. If Microsoft can stop losing legacy clients to Google (who can clearly retain them), it could become a nice recurring revenue stream. If they can pull it off.
Ballmer Slated To Kick Off CES, But Why? (betanews)
The Consumer Electronics Association announced that Microsoft’s CEO would give the CES kick-off keynote next year. As in January 2012. This will be Steve Ballmer’s fourth CES keynote since taking the reigns from Bill Gates. That is of course, if he’s still CEO. There aren’t many companies less appropriate to kick off CES. Microsoft’s core business is not consumer electronics. They do have the fastest selling consumer electronics device of all time, however.