Post Tagged with: "Microsoft"

Economic and market themes: 2014-07-25 Ukraine, China, Japan, technology overvaluation

Economic and market themes: 2014-07-25 Ukraine, China, Japan, technology overvaluation

Ukraine is at risk of becoming a failed state
China’s growth is due to stimulus
Japan’s macro figures worsen
Microsoft’s strategy is weak
Facebook is overvalued

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On Microsoft’s mobile strategy

On Microsoft’s mobile strategy

An investment in Microsoft has been dead money for quite a while now. The stock has traded in a pretty narrow range between $22 and $32 except in late 2007 and 2008 during the financial crisis when it spiked and then plunged. The stock does sport a dividend of 92 cents a share, which is about a 3.3% yield. If you figure that Microsoft is dead money for the next few years still, then that certainly beats Treasurys. But given the increased risk, it’s nothing to right home about. SO what about Microsoft’s strategy makes it more than dead money. Let me offer a few suggestions here.

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Excess cash on the balance sheet is wealth destruction

Excess cash on the balance sheet is wealth destruction

Many of the largest technology companies are making so much money that they are rapidly accumulating cash on their balance sheets. While on could argue that this cash should be stripped off the balance sheet for valuation purposes, I would argue that the cash is worth less than face value because having excess cash on the balance sheet is an invitation to wealth-destroying acquisitions. The excess cash should be returned to shareholders as quickly as possible in the form of dividends or share buybacks to prevent such an outcome.

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Will Nokia’s Windows Mobile Phone Deliver?

Will Nokia’s Windows Mobile Phone Deliver?

Mashable says the Nokia Lumia 800 could be the best Windows Phone yet. The Wall Street Journal is a little more sceptical of Nokia’s Windows Mobile phone launch though. Take a look.

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Cashmore on Technology’s Paradigm Shift

Cashmore on Technology’s Paradigm Shift

Here’s an interesting conversation about social media and Internet and technology companies’ adjustment to it.

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Microsoft: $8.4 Billion Down the Drain

Microsoft: $8.4 Billion Down the Drain

Though, in the eyes of Microsoft executives, virtually any outcome might seem better than letting the company fall into the hands of Google, which still has no strong foothold in social or communication software – one of the few online areas where Microsoft still maintains a market share advantage. Unfortunately for shareholders, anything less than a stellar success might just look like billions more flushed down the drain in Microsoft’s thus far failed bids at online dominance. Even if the company can quadruple the size of Skype’s business, they will still be losing money online if nothing else changes and they will have only added a few percentage points to top line growth – neither of which is likely to move to stock price in any major way.

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When will large cap tech stocks start paying dividends?

When will large cap tech stocks start paying dividends?

I would argue that this is evidence that these companies are wasting shareholder capital by plunking down for splashy acquisitions and large new capital investments that are not paying off. Cisco and Microsoft have huge cash balances waiting to be deployed. This money can go to buying back shares at inflated prices or making acquisitions of dubious value to shareholders. The right thing for these companies to do is not necessarily just restructure but change their mindset and accept that the glory days of top line growth are over. First and foremost this means increasing the dividend payout to match other sectors of the economy.

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Desperately Seeking Search

Desperately Seeking Search

Internet search is broken.

Battered by spammers, content farms and black hat optimizers, the typical Internet search is a horrible mess. Try basic search terms like "washing machine". Or try a term relevant to this site like "Finance Blog". What you get is a bunch of tricksters who have gamed the search engines to bring their clearly less relevant sites to the top of the pile. You as the user have to wade through these sites, hoping to find something remotely relevant to your search. Many give up in frustration. And while this situation is most acute at Google because their large search market share makes them a target for these shenanigans, the situation is better at Bing/Yahoo, but pretty much the same.

How do we solve this problem?

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Why Nokia and Microsoft are getting together

Why Nokia and Microsoft are getting together

If you saw the last round of data for the burgeoning mobile market, you would understand exactly why Nokia and Microsoft are banding together. These two companies are also rans in a market that has shifted away from voice communication to data and internet as the driving factors. According to Gartner, Nokia’s Symbian operating system is still the  dominant one […]

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What’s really happening with Bing ‘Cheating’ and Copying Google Search Results

What’s really happening with Bing ‘Cheating’ and Copying Google Search Results

[Updated with a view from a former Google search engineer below] Earlier this week Google disclosed that it had run a sting operation on its main search page which clearly ascertained that Bing, a competitor search engine by Microsoft, was using Google’s search results to tweak its own search results. The furore over this has been all over the web […]

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