Microsoft continues to be kicked across the block in the Net business for going on fifteen a long time. Now it is likely payback time.
While every person else hunkers down and fights to survive, Microsoft will get to sit again and decide who to acquire. When it decides, it may dig right into a $20 billion dollars pile that may almost replenish alone this 12 months with $15 billion of free money flow. No one else, like Google, will gain this a lot of a relative benefit through the worldwide economic collapse.
(Google, moreover, is now hamstrung by alert regulators--thanks, in component, to Microsoft's lobbying--and is targeted on cutting charges and narrowing its ambitions. These need to retain it distracted for your subsequent few decades.)
Who could Microsoft buy? Some obvious names, and many smaller not-so-obvious ones.
But the first thing Microsoft needs to do if it really is to succeed long-term in the Web enterprise is build a central consumer brand that it could hang everything else off of. (Alternatively, it might focus on the back end, via search and other technologies,
Microsoft Office Professional Plus 2010, 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,
Office Professional Plus 2010 Sale, and the same will hold true for Microsoft).
The big consumer World wide web brands other than Google include:
Yahoo AOL Facebook MSN,
Microsoft Office 2007 Standard Product Key, et al (Microsoft needs to consolidate ALL its World wide web brands into a single. This one's probably the most prominent).
Microsoft could probably get Yahoo,
Buy Microsoft 2007 Office Professional, AOL, and Facebook today for $20 billion of dollars. 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,
Window 7 Home Premium, 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 become Microsoft's Achilles heel for the past 15 years--an unwillingness to commit to one Internet 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 about that brand as a separate public company. We think Steve Ballmer is congenitally predisposed against this approach, however, 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.
Window 7 Home Premium Microsoft's Revenge
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