Microsoft Corp (NASDAQ:MSFT)

CAPS Rating: 3 out of 5

The world’s leading software company, Microsoft is the force behind the Windows operating systems and the Office suite of software.

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Player Avatar FoolNewb (76.62) Submitted: 4/9/2008 1:48:20 AM : Underperform Start Price: $28.11 MSFT Score: -2.76

I see no immediate upside for Microsoft outside of game and office software sales. They seem to be in panic mode if you ask me, as evidenced by their recent acquisition attempt of Yahoo. Google dominates search. IE is losing market share to Firefox, Safari, and Opera in the browser world. The Zune which is a nice Mp3 player will never be an Ipod. It 's that simple. Finally, Operating systems which are the bread and butter of MSFT are looking down as well. They've all but admitted Vista was a failure by announcing a new OS will be released for PCs in the near future, and whatever did happen to Longhorn on the server side of things? This is opening the floodgates for OS10(Apple) and open source OS' like Linux to steal even more market share in both the PC and server areas. Aside from this they have had major legal issues overseas in Europe and Asia that they are still trying to recover from as far as their reputation abroad is concerned. The one bright spot I did see for Microsoft was the growing popularity of the Xbox 360 game console. However, the demise of HD-DVD and a good start to the year for the PS3 console are serious blows that cannot be ignored in this sector of the business. I hope Ballmer and the gang can prove me wrong, but I just don't see the upside that some analysts have been preaching on MSFT.

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Member Avatar Macapure (< 20) Submitted: 5/7/2008 9:56:04 AM
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FoolNewb I see your point in a few areas such as IE but, the Zune is going to catch on like fire this year. As people realize the ease of use and the fact that this gadget has the goods. They are also currently upgrading the website to offer services similar to IPOD. Also you keyed in on the bright spot the XBOX 360, what you didn't key on though was the interoperability with the zune as well making it even that much more a sell for the Zune. Vista is appealing but it is buggy and trust me they know it. They are planning major fixes hopefully brining it back on track. Overall they will hold steady with the PC world, and the recent investments into the automobile upgrades could open up a whole new arena for the company. Not sure though that Balmer is the cat to make it happen my confidence in him was lowered with his failure to strike the yahoo deal, but i do see microsoft staying steady throughout the year and then growing after September. Macapure

Member Avatar TheParadox (93.62) Submitted: 5/7/2008 10:42:41 AM
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I couldn't agree more. MSFT is just "following" the leader. diversity into too many business segments can become painful.

Member Avatar FoolNewb (76.62) Submitted: 5/12/2008 10:38:00 AM
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I understand your comments on the zune. I think it is great, and it's interoperability with the xbox is incredible. Problem is that the MP3 player market is fueled mostly by children, and all of the "cool kids" in school have Ipods, or Iphones for that matter. Apple will continue to dominate this area for that reason alone. I personally have an Ipod because I won it in a raffle. Had I bought my own MP3 player I would have went with a Zune because it costs less and has better interoperability with more online music services and video game consoles than an Ipod in my opinion. But my opinion doesn't mean jack when it comes to sales. As far as Vista, I agree with you there also. They will hold steady in the PC world, but that is just plain not good enough. Microsoft should dominate this area. They have every advantage on the planet when it comes to the OS, but Vista cannot dominate. Why? Poor decisions? Bugginess? Overpriced? Invasion of Privacy? All of the above? For savvy computer users, Linux distributions are becoming more user friendly and most of them are free. You can even install Linux on the Sony PS3 without voiding the warranty. For less educated computer Users who must purchase an out of the box OS and can afford it, Leopard is just plain better than Vista dollar for dollar. So you see they are losing market here. People are ridding their PCs with out of the box installations of Vista for older versions of Windows, or Linux at an incremental rate. And many without the knowledge to do this are spending a couple extra $s to avoid Vista all together and buying Macs. As people become more educated to what is out there, Windows becomes more and more irrelevant. This is a bad situation for Microsoft that they need to address soon. It is not out of control yet, but if they do not do something big soon it will become irreparable and they will be just another average software developer with a nice video game console in their portfolio.

Member Avatar FoolNewb (76.62) Submitted: 5/12/2008 10:41:10 AM
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Thanks

Member Avatar millionaire55 (72.88) Submitted: 6/9/2008 2:08:08 PM
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GOOGLE IS OVERRATED.....Microsoift, sell's marryed ...google is a trend!..with bill gates..and his team ! google can't lose.

Member Avatar toomis (57.65) Submitted: 6/13/2008 2:38:39 PM
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I disagree, once MSFT acquire Yahoo the tide will slowly turn and they will be back on top. Google dominates for now, but even there run is coming to an end. Google searches are down and even they are looking for ways to improve. But the great thing for both companies is they have the best and smartest minds continuing to find new ways to improve. I recommend MSFT and GOOG for the long run.

Member Avatar gabriel4786 (21.64) Submitted: 8/16/2008 1:02:27 AM
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Ms is spending over 500 million dollars on advertising for Vista. That is what paid for the Mojave experiment. They stand behind their OS and look for sales of that OS to jump significantly

Member Avatar cdelaney08 (28.26) Submitted: 9/13/2008 2:20:08 AM
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Couldn't agree with you more. MS is underperforming in every area that matters (as well as many that don't matter lol). Vista sucks, plain and simple. I usually love new OS's as a techie geek but I'm sorry it just sucks. Not just because of bugs either. Apple blows away Zune, Google blows away Search, Microsoft has lost their way. I just put in a long term 5yr underperform myself.

Member Avatar jgseattle (29.69) Submitted: 10/8/2008 7:19:54 PM
Recs: 2

I agree MSFT is lost in the woods and stumbling. The question is for CAPs and as an investment how will it perform.CAPS - MSFT relative to the market should do well. Look at the cash flow MSFT generates. It anounced another $40B stock repurchase and upped the dividend. MSFT may do everything average but it is still a cash cow and even if all they do is harvest the cash flow from OS and Office MSFT will be ok. Real Money - MSFT just broke under $24/share today and I suspect it is going down to under $20/share. This may sound crazy but with the cash on hand and the cash it generates MSFT might become a target for private equity funds. Now that would be something interesting to see!!!! And the cash puts a floor on the stock I think at $16-18. If it drops more than that the cashflows generated are just to much.

Member Avatar thefoxbox (60.60) Submitted: 1/4/2009 8:54:18 PM
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Don't forget how they are charging customers $150 extra to stick with XP. Vista = crap. If Windows 7 doesn't save them (due to release within 27 days, which will end up being 2-7 months...) then they should sell themselves.

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