Microsoft Office Professional Plus Microsoft's Rev

[letter98]

Microsoft has become kicked around the block from the Internet enterprise for going on 15 decades. Now it's possibly payback time.

While everybody else hunkers down and fights to survive, Microsoft gets to sit back and make a decision who to acquire. When it decides, it could dig into a $20 billion dollars pile that can practically replenish alone this 12 months with $15 billion of free of charge cash flow. Nobody else, including Google,Office Enterprise Key, will gain this significantly of a relative advantage in the international financial collapse.

(Google,Office Home And Business Key, in addition,Office 2007 Professional Sale, is now hamstrung by alert regulators--thanks, in portion, to Microsoft's lobbying--and is centered on cutting costs and narrowing its ambitions. These should retain it distracted for your subsequent few years.)

Who could Microsoft acquire? Some obvious names, and many smaller not-so-obvious ones.

But the first thing Microsoft needs to do if it truly is to succeed long-term inside the World wide web enterprise is build a central consumer brand that it could hang everything else off of. (Alternatively, it may focus on the back again end, via search and other technologies,Genuine Windows 7 Home Premium, but this likely won't be as profitable. The vast majority of Google's immense profit comes from searches on its own site, not third-party sites, and the same will hold true for Microsoft).

The big consumer Internet brands other than Google include:
Yahoo AOL Facebook MSN, et al (Microsoft needs to consolidate ALL its Net brands into 1. This one's probably the most prominent).
Microsoft could probably buy Yahoo, AOL, and Facebook today for $20 billion of cash. It could then consolidate them under a single brand and build a strong alternative for advertisers vis a vis Google. (Vastly easier said than done, but possible.)

If Microsoft isn't willing to put all its weight behind a single brand, it will probably fail regardless of what it buys. This has long been Microsoft's Achilles heel for that past 15 years--an unwillingness to commit to one Web brand and strategy--and we're not optimistic that it will be able to get out of its own way this time either.

We still think the smart play here would be for Microsoft to spin its Web operations OUT of Microsoft and INTO Yahoo and then build everything all around that brand as a separate public company. We think Steve Ballmer is congenitally predisposed against this approach, however,Microsoft Office Professional Plus, even though it would likely be a great move for Microsoft shareholders (who would own most of the new Yahoo AND the original Microsoft).

But, in any event, as the Valley goes into the fetal position, Microsoft's relative position is growing stronger. And we imagine this is not lost on the folks in Redmond.