Technology StocksMicrosoft Corp. - Moderated (MSFT)

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To: zax who wrote (17833)11/23/2011 6:13:04 PM
From: Cautious_Optimist
2 Recommendations   of 19198
OMG there are so many other business reasons besides acquisition, for an NDA.

One would think an NDA for potential M&A would, ironically, not be disclosed. Disclose the non-disclosure??? say what???

If it were this easy to get information, Yahoo! would have gone through the roof before the NYT reported it.

We of the street, are unfortunately LAST to know. So I would proceed carefully with an eye to value, sans takeout.

Its fun to watch the market psychology and rumor process though.

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From: zax11/30/2011 11:31:37 AM
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Xbox sales nearly hit 1 million in biggest Xbox week in history
By Tom Warren

Microsoft announced on Tuesday that it has sold over 900,000 Xbox consoles in just one week.
The software maker shifted more than 960,000 consoles in the U.S. alone during the week of Black Friday. More than 800,000 were sold in just 24 hours. “Xbox 360 should deliver its eleventh straight month as the number one console in the US,” said Microsoft’s Jeff Meisner in a blog post on Tuesday. “Microsoft expects holiday momentum to continue, driving Xbox 360 to finish the year as the number one console in the U.S.” Highlights include:

  • Xbox 360 sold more than 960,000 consoles in the U.S. alone, with more than 800,000 sold within a period of 24 hours.
  • More than 750,000 Kinect for Xbox 360 sensors were sold in the U.S. – standalone and bundled.
Microsoft is currently preparing an update to its Xbox 360 console, due next month. The dashboard update will also bring Microsoft’s Metro style interface to the Xbox. Microsoft is also preparing to include YouTube and Bing on the Xbox. Bing users will be able to use Kinect’s voice recognition feature to search for movies, music and other content on their consoles. The new dashboard will also enable Microsoft’s upcoming Windows Phone integration with Xbox, see a video demonstration here. Microsoft plans to make its dashboard update available on December 6 for all Xbox 360 customers.

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To: Cautious_Optimist who wrote (17834)11/30/2011 6:38:29 PM
From: zax
1 Recommendation   of 19198
Microsoft reportedly bidding $16.60 per Yahoo share for minority stake
By Tom Warren

Microsoft is reportedly bidding with a consortium of investors, led by Silver Lake, to take a minority stake in Yahoo at $16.60 per share.

The software giant previously signed an NDA last week to take a closer look at Yahoo’s finances. Microsoft is expected to provide billions of dollars in financing as part of the consortium to Yahoo. The deal would see Microsoft take a minority stake of up to 20% in Yahoo. Bloomberg reported on Wednesday that Microsoft is planning to bid around $16.60 per share. Recent rumors from October suggested that the software giant was considering a partnership deal with Yahoo. The partnership deal was working into a full blown acquisition according to The Wall Street Journal, who reported in October that Microsoft was working with the Canada Pension Plan Investment Board and Silver Lake Partners, a private equity firm, to ready a bid to acquire Yahoo. It appears from Bloomberg’s report that Microsoft has settled for a minority stake.

Yahoo stock closed up at $15.71 per share on Wednesday with after hours trading valuing the stock at $16.24. Yahoo is reportedly considering the offer at a board meeting scheduled for Wednesday, Bloomberg reports. Microsoft CEO Steve Ballmer recently revealed that Microsoft was “lucky” not to buy Yahoo back in 2008. “You know, times change, times change,” said Ballmer. “The market really kind of fell apart. Sometimes you’re lucky,” he added. Microsoft famously offered $44.6 billion cash-and-stock to purchase Yahoo in February, 2008. The deal was an intense one for both parties, valuing Yahoo’s stock price at $31, a significant premium on its true value at the time. Despite the offer, Yahoo declined and wanted more cash. Microsoft upped its offer to $33 a share but Yahoo believed the company was worth $37 per share.

The failed deal surfaced as a search deal between Bing and Yahoo. Microsoft secured a 10-year deal in July 2009 to push Bing as the exclusive algorithmic search and paid search platform for Yahoo! sites. The agreement ended Microsoft’s talks with Yahoo which had lasted nearly two years. Yahoo has failed to make an impact with its various web properties, despite acquiring popular photo sharing site Flickr. The once popular web portal and search engine has struggled against Google and Facebook in the new world of social networking.

Microsoft announced an online advertising deal with AOL and Yahoo to sell premium online display inventory earlier this month. The agreement will allow each network to offer each other’s premium non reserved online display inventory to advertising customers. Microsoft, Yahoo and AOL will all continue to operate their core networks and advertising separately but the partnership will benefit advertising customers wishing to buy up inventory across all the sites.

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From: zax12/16/2011 1:22:55 PM
   of 19198
Bing U.S. market share hits all-time high of 15% during November
By Tom Warren

Microsoft’s Bing search market share hit 15% in the United States during the month of November.

The software giant’s “decision engine” rose to 15% U.S. market share compared to Google’s 65.4% according to data from comScore. Search engine land obtained the numbers early and notes that Yahoo’s market share dropped to 15.1% following a 15.2% figure in October. Microsoft’s Bing search has increased its share consistently over the year but it has started to flatten out in recent months . Bing grew faster in October 2010 than Google and has continued to rise ever since. Microsoft’s Bing search volume increased by 29% during 2010 according to comScore. Microsoft’s 15% figure represents and all-time high for Bing.

Microsoft has been trying to place Bing on several platforms. The software giant has pushed two minute video demos of Bing on iPhones, released Bing iPhone games and ensured Bing is making its way to the latest Toyota line of cars. Microsoft also introduced a special Bing for iPad application recently. The constant iteration and product updates also keeps Bing’s competitors on their toes. Microsoft is also introducing a new Xbox Bing voice search in its latest dashboard software, due shortly.

Microsoft recently launched Action Buttons to better surface quick deep links to various search queries. The software giant also introduced an Adaptive Search feature. The feature allows Bing to learn user patterns and provide a new set of search results per used based on previous search queries. The search results work by surfacing information on what Bing thinks an end user is searching for. If a user searches for Australia then they’ll like receive results about the country and travel related content. However, if the user regularly searches for movies then Bing is more likely to provide search results for the movie Australia rather than the country.

Microsoft also announced a renewed Bing search deal with Twitter in September. The deal will see Twitter continue to share its tweets with Bing search results. Bing uses Twitter data for its real time search queries, something that Google had to temporarily disable after failing to establish a new agreement with Twitter.

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From: Glenn Petersen12/19/2011 11:55:39 PM
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Microsoft Shrinking Margins Loom

By Dina Bass
Dec 18, 2011 11:01 PM CT

Microsoft Corp. (MSFT)’s push into cloud computing will help the company compete with Google Inc. (GOOG), Apple Inc. (AAPL) and Inc. (CRM) It also will hurt profit margins.

The company’s cloud software lets corporate customers pay a subscription to do things like manage spreadsheets and corporate websites with software stored and run on Microsoft’s servers. The new services also help users view TV shows and edit photos on the Web.

While that may be great news for customers, the cost of storing software in Microsoft’s own data centers, combined with other expenses, means the company may miss profit estimates for fiscal 2012, said Heather Bellini, an analyst at Goldman Sachs Group Inc. It also means the good old days of outsized margins for the software giant may be a thing of the past, said Jason Maynard, an analyst at Wells Fargo (WFC) Securities.

“Nothing will ever be as high as the old model,” said Maynard, who’s based in San Francisco.

Profit margins, which shrank to a 22-year low in 2011, are set to fall further. Gross margins, or the percentage of sales left after production costs, will narrow 1.6 points to 76 percent in fiscal 2012, the average estimate of analysts compiled by Bloomberg. That’s after a 2.4-point drop in 2011.

The challenge to Microsoft’s margins stems from decisions Chief Executive Officer Steve Ballmer has made in recent years to invest in new businesses, such as adding content for Xbox and acquiring Skype Technologies SA for $8.5 billion.

Rising Costs

The pressure will persist beyond this year as more customers switch to cloud computing, which involves hosting software on Microsoft’s servers and delivered it over the Internet. That shifts the cost of storing and operating those programs to Microsoft.

Microsoft traditionally sold packaged software that, once developed, costs little to manufacture and distribute. In moving more business to the cloud, the world’s largest software maker must take on the costs of running data centers. These expenses include powering, cooling, housing and maintaining servers that run the programs for clients.

Mark Moerdler, an analyst at Sanford C. Bernstein & Co., estimates that cloud-related costs will range from 15 percent to 25 percent of revenue. That’s about 10 percent more than selling standard packaged software, he said.

Goldman Sachs’s Bellini said analysts may not be taking into account a large enough increase in cost of goods sold for the fiscal year ending in June, which could cause Microsoft to miss profit predictions. Even Bellini, who lowered her projection for gross margins and trimmed 9 cents from her overall profit estimate, said she may not have cut enough.

Microsoft declined to comment for this story.

Growth Challenges

Margin pressure is making some investors leery of Microsoft stock, and may weigh on the shares in coming months, said Walter Price, who manages the $3 billion Allianz RCM Technology Fund at RCM Capital Management in San Francisco.

The shares, which gained 1.7 percent to $26 on Dec. 16, have declined 6.8 percent this year before today.

Microsoft was already facing a challenging year for profit growth. The European debt crisis and a sluggish economic recovery have prompted government and financial customers to pare spending, while the PC industry is reeling from flooding in Thailand that has slashed production of hard drives.

Companies will boost spending on software and computers at a slower rate next year than 2011, according to Gartner Inc., which said it may cut its forecast even further at the end of the quarter. Hewlett-Packard Co. (HPQ), the largest computer maker, last month said it’s started to see businesses curb spending.

Xbox Content Fees

Microsoft’s product cycles also point to a year of slower growth in its flagship Windows and Office software businesses, according to Rick Sherlund, an analyst at Nomura Holdings Inc. The two divisions will expand more slowly this year as customers wait for an update to the Windows operating system, which Sherlund expects in October. Microsoft is likely to follow that with a touch-enabled version of Office productivity software, he said.

At the same time, costs are rising across businesses. Microsoft’s Xbox game consoles, which are selling well, are more expensive to manufacture than software, and the company is paying more licensing fees for content to run on the Xbox Live service.

The addition of Skype, increased demand for consulting services in the server business, and costs of Microsoft’s search partnership with Yahoo! Inc. are also adding to the jump in expenses.

Need for Scale

Including the impact of Skype, operating expenses for the year will be as much as $29.2 billion, up from a previous forecast of $28.6 billion, Microsoft said in October.

Reining in cloud computing costs will be key, and that will depend on how efficient Microsoft can become at running its massive data centers. The company will need to attract large numbers of cloud customers to get the services running at scale. And it will have to remain vigilant on data-center energy and cooling costs, said Sanford C. Bernstein’s Moerdler.

“They should be able to be pretty efficient and they should be able to generate net more revenue so the margin will go down, but earnings per share will go up,” he said. That’s in line with Microsoft’s own forecasts since starting its move to the cloud.

To contact the reporter on this story: Dina Bass in Seattle at

To contact the editor responsible for this story: Tom Giles at

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From: zax1/19/2012 5:10:52 PM
3 Recommendations   of 19198
Microsoft posts record Q2 2012 earnings, despite Windows division decline
By Tom Warren on January 19, 2012 04:05 pm

Microsoft's Q2 2012 earnings report is in, and the company announced a record revenue of $20.9 billion — a 5 percent increase from the same period last year. Despite slowing PC markets, Microsoft's Business and Entertainment & Devices divisions appear to have helped the company's profits this quarter. Strong Xbox and Kinect sales boosted that particular division by 15 percent from the prior period, bringing it close to the same revenue generated by the Windows division. Microsoft's Server & Tools business posted $4.77 billion in revenue, an 11 percent increase from the prior year period. Operating income, net income, and diluted earnings per share for the quarter were $7.99 billion, $6.62 billion, and $0.78 per share, compared with $8.17 billion, $6.63 billion and $0.77 per share, respectively, in the same period last year.

The big news came from Microsoft's Windows and Windows Live division, which posted revenue of $4.74 billion, a six percent decline from the prior period — drawing a line under the slow down of traditional PC sales. Microsoft warned investors at CES 2012 that PC shipments may have dropped below analyst estimates, and it appears Windows revenue was dented due to this. Competition from Apple's strong iPad and MacBook Air sales has helped slow down shipments of traditional PCs, and Microsoft is clearly banking on Windows 8, its latest operating system designed for tablets, to help reverse this trend.

Microsoft CEO Steve Ballmer chose to reflect on the company's final CES appearance in his earnings statement. "Coming out of the Consumer Electronics Show, we’re seeing very positive reviews for our new phones and PCs," said Ballmer before looking towards the company's Metro style design across phones, PCs, tablets and televisions in 2012.

Microsoft stock is up two percent in after hours trading on the NASDAQ at the time of writing.

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From: zax1/20/2012 9:07:27 AM
   of 19198
Rumor: Next Xbox processor in production?
John Callaham

Microsoft has yet to give an official announcement about its plans for a successor to its Xbox 360 console. However, the rumors of that console (called Xbox Next or Xbox 720 in the media) have continued to hit the Internet. The latest such rumor comes from which claims via unnamed sources that production has now begun on the processor, coded name Oban, at an unnamed foundry.

The story further claims that 10,000 wafers of the processor are being made, with the conclusion that these chips are being created for installation in official Xbox Next/720 game developers kits. It claims that the production of these chips actually started at the end of 2011 and that the first chips will be ready to go sometime in late February. The article speculates that development kits with these chips could be ready to be sent to game developer studios in March 2012.

The article also speculates, and many other people agree, that Microsoft will once again have a PowerPC-based CPU for the next Xbox processor, just as the Xbox 360 has one based on PowerPC's design. Xbox Next/720 might also have a Radeon-based graphics chip from AMD.

Again, this is all rumor and Microsoft is likely not to confirm anything about the next version of the Xbox until E3 2012 in June at the earliest.

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From: David Klein1/21/2012 6:47:06 PM
3 Recommendations   of 19198
For those interested my latest article on MSFT is at:

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From: zax2/1/2012 12:08:48 PM
   of 19198
ITC Tosses out Barnes & Noble Antitrust Claim Against Microsoft
Wednesday, February 01, 2012

On the eve of what promises to be a sensational patent infringement trial that will finally pit Microsoft against one of its Android-based enemies, an International Trade Commission (ITC) judge has tossed out a major claim against the software giant. That judge has ruled that an allegation made by Barnes & Noble, that Microsoft was acting in an anti-competitive fashion, was baseless.

After failing to negotiate a patent licensing agreement from Barnes & Noble for technologies it claims are used illegally by the firm's Android-based devices, Microsoft sued Barnes & Noble for patent infringement in March 2011. Barnes & Noble counter-sued in November 2011, arguing that Microsoft's behavior was anti-competitive. That latter claim has been thrown out, leaving Barnes & Noble to answer Microsoft's claims in court.

"Today's action by the ITC makes clear that Barnes & Noble's patent misuse defense was meritless," said Microsoft's deputy general counsel David Howard. "This case is only about one thing: Patent infringement by Barnes & Noble's Android-based devices. We remain as open as ever to extending a license to Barnes & Noble, and invite them to join the many other major device makers in paying for the Microsoft-developed intellectual property they use in their devices."

Barnes & Noble declined to comment on the ruling.

The actual ruling, which was uncovered by an intellectual-property analyst who was previously retained by Microsoft to conduct a study on patents, is still sealed by the ITC. But the title of the order, "Initial Determination Granting Microsoft's Motion for Summary Determination of Respondents' First Affirmative Defense of Patent Misuse" leads little room for doubt as to its contents.

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From: zax2/9/2012 1:56:14 PM
   of 19198
Microsoft to launch Windows 8 'Consumer Preview' on February 29th
By Tom Warren on February 8, 2012 01:09 pm

Microsoft revealed today that it plans to launch the highly anticipated "Consumer Preview" version of Windows 8 on February 29th. The company will hold an event at Mobile World Congress (MWC) in Barcelona on February 29th to launch the Windows 8 Consumer Preview between 3PM and 5PM (CET). The unusual choice of venue (a cellphone conference) could hint at the company's plans for the future of Windows 8 and Windows Phone.

Details on Windows Phone 8, codenamed Apollo, leaked last week and revealed an interesting synergy between Windows Phone and Windows client. Not only will Windows Phone 8 share the same Metro style user interface as Windows 8 for tablets and PCs, but developers can reuse the same code for both operating systems. It's not clear if Microsoft plans to discuss its Windows Phone 8 plans, but a Windows 8 Consumer Preview launch at Mobile World Congress makes it look that way.

Microsoft will unveil its Start Screen changes, customization and keyboard / mouse improvements with the latest preview, including a desktop mode without the traditional Start button orb. The Consumer Preview version of Windows 8 will also include some preinstalled Metro style applications, and provides access to the new Windows Store where users can download a range of games and applications.

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