Weak earnings report from Microsoft

The Dow tumbled 200 points.

I had to talk about Microsoft stock this week as it is one of the more talked about ones along with apple, and  Google. All three of these tech stocks had common themes with Apple and Google coming off the worst. The good thing is that investors are still bullish about the latter stocks.

As for Microsoft, the stock fell three percent and this negatively impacted the Dow as it is one of the giants of the index. Two other giants - McDonald's and General Electric - also had disappointing earnings reports.

Microsoft's net income has gone down 22 percent with PC sales falling and the European debt crisis affecting the Seattle, WA firm's global revenues.

The sales of the Xbox 360 as of late have been a disappointment for Microsoft and they need a new game console really badly. This makes the release of Windows 8 on Friday all the more important. Analysts have reduced their earnings forecast for Microsoft for next quarter and the success of Windows 8 will determine the trajectory of the company's stock price.

Another one to look out for is the Microsoft Surface tablet that Microsoft is banking on to regain lost market share. .

The Surface has become a necessity for Microsoft because Apple's iPad has penetrated the PC market that Microsoft has a hegemony in. Small businesses are increasingly using the safe and light iPads instead of the heavy, virus-prone PCs.

Microsoft can really make a comeback with Surface as its Windows OS and Microsoft Office software are so widely used in global commerce.

Steve Ballmer says Microsoft to become a device and services firm

Microsoft CEO Ballmer issues 2012 letter to shareholders.

Microsoft will become more like Apple in the future as outlined by CEO Steve Ballmer. After all, the Redmond, WA software company has had successful products like the Xbox and the Kinect in the past. Yet, the shift to a device centric company will not be an easy one. Remember the Zune MP3 player, Microsoft’s poor attempt at competing with the iPod?

Microsoft does have a lot of assets to pull of a revolutionary product like a smartphone to take advantage of that high growth market and change its fortunes. For now, Microsoft has high hopes about Windows 8 and it is reportedly spending somewhere in the region of $1.5 billion in marketing the new OS which has a launch date set for October 26.

But it is possible that the tech giant might be using this money to promote some of its other products such as Windows Phone 8 and Surface. Nonetheless, Microsoft has to sufficiently promote Windows 8 as it is what Ballmer calls a ‘risky product bet’.

This is because there are changes within Windows 8 like the Metro being introduced instead of the desktop. The shift to smart phones and tablets by Microsoft hinges on the success of Metro. Microsoft needs Windows 8 to be a a success as it makes a large percentage of its profits through the Windows line of business even though it has expanded into other revenue generating products such as Xbox and the Enterprise Server and Tools.

Microsoft is taking quite a gamble with Windows 8 in terms of the dollars spent, but in moving towards a strategy similar to Apple, I feel the tech giant has made a step in the right direction. 

Bill Gates is now investing in toilet technologies

A better toilet could improve global health.

The toilet that most of the western world makes use of is not affordable for about 40 percent of the people on this planet. Innovative ideas are now being thought of to solve this problem in an attempt to win a cash prize that is being offered by the Bill and Melinda Gates Foundation.

There are 2.6 billion people on this planet who will benefit from anything that the brightest designers and scientists can offer in terms of a solution. It is pretty challenging because the toilet innovation would be so that it did not need piped water or a sewer. Furthermore, this new toilet should also not depend on electrical connections and be able to dispose of the waste in a useful manner.

It may look pretty perplexing, but a Caltech team was actually able to come up with a toilet that produced electricity and hydrogen too. A lot of the teams at the fair had similar ideas but with varying design. For instance, capturing the urine and using it for flushing was one such idea for renewable energy if you will.

The toilet should be able to function with a cost of five cents a day and I am sure many in the Western world are wondering if this toilet innovation could be brought here due to the inflation and high living expenses that we face. But right now, the toilet innovation is vital in the developing world to stop the spread of disease and improve hygiene.

I can see that the Bill and Melinda Gates Foundation seems to know what it is doing as it attempts to reduce poverty and help improve the Third World.

What has Bill Gates been up to?

Updates on my favorite billionaire.

I have been an avid reader of Bill Gates’ blog. Gates has always been such a big inspiration to me and I share in his love for reading. Not that it is summer, there seems to be more time for Bill Gates to get some extra reading. Gates is known to be a really fast reader who will read anything from health to science to global development which he is particularly involved in these days.

To show how big he is on reading, there is actually another post on summer reading on his blog. I guess reading is what great leaders do and they seem to be doing it all the time.

But getting back to global development, Gates had some comments about G20-style global development. The thing that Gates stresses the most is that it is coming up with new ideas that address healthcare in the developing world that is most important. Money is not as important as innovation and the people who manage the aid to the poorer countries.

Gates is very optimistic about Sub-Saharan Africa and hopes that the GDP of the region will double in the next decade. Gates has urged Diaspora communities to contribute by putting their money in bonds for infrastructure in low-income countries.

It is remarkable how many lives have been saved by the new vaccines that have been discovered. The developing world has actually seen a lot of improvement with the reduction of poverty rates and the GDPs of these countries rising fast. You can read more about Bill Gates’ comments here.

Microsoft and the issue of skilled immigration

This is a real hot topic.

Immigrants are great. That is what this country is built upon. But I am talking more specifically about skilled immigration.

From reading about what Silicon Valley executives have to say and my usual look at various tech blogs, I have to say that tech salaries are commonly in the six figures. The other thing is when you look at companies like Microsoft and its competitors in firms like Google and Apple, money is not an issue.

These large companies want the best and brightest in order to stay competitive and make sure that they get the best products out there. The world of technology thrives on competition and this is something that Bill Gates often said. It is the competition that lends to innovation and this innovation seems to be coming from immigrants more often than not.

The problem in America right now is that too few people are studying the Science, Engineering, Technology and Mathematics (STEM) fields and even when they do they move in to non-STEM careers. Only four percent of the globe’s undergraduate engineering pool have degrees from American universities.

Major tech centers across the United States have a low unemployment rate. The fact of the matter is that tuition increases and the increasing student loan debt have made Americans become fearful of going into STEM fields because of the risk they come with. Microsoft is hosting a skilled immigration conference and there will be a lot of discussion about this as it relates to corporate interests, politics and public policy.

The problem is that there is no hard data for economists to work on. Protectionism is not a bad thing, but the model of getting the best and brightest to come to America has paid dividends and will continue to do so.

Windows 8

What's new with Microsoft

Windows 8 is the latest operating system and Microsoft is giving consumers a chance to upgrade to Windows 8 for as little as $15. But Windows 8 will not be available for you until the end of October of this year. The timing of this was decided so that it coincides with the holiday shopping season!

With the coming of Windows 8, Microsoft is looking to step up its game and look to compete with Apple, Amazon and Samsung by introducing its own tablet that will be similar to the iPad and the Nexus 7 by Google.

There is actually a comprehensive review of Windows 8 and the services it offers over on Time’s Techland. I think it is a good place for you to keep updated on the latest gadget and get some ideas on what would be good buys in the tech world.

I know that the move from Windows Vista to Windows 7 was great, but in terms of how I felt I really did not see much difference in the services that were offered. I really hope that Windows 8 promises to be better and a lot of analysts at investment firms have stated that this new operating system is probably the best ever and will see a sharp increase in Microsoft’s stock price.

Microsoft’s stock price has been pretty steady throughout the year by ranging anywhere from $28 to $35. Windows 8 and the tablet that the Redmont, Washington based tech giant hopes to delight customers should see more value for Microsoft’s investors.

Bill Gates Biography

I thought this blog could do with a brief look into Gates biography and character!

Bill Gates is hated and reviled by many and at the same time loved by many others. I guess this is the story of life and I wished my parents had told this to a little earlier on in my life. I had to figure out everything on my own and that is really too time consuming!

The number one thing to remember with the Microsoft founder is that his family was very wealthy (not as wealthy as Bill Gates of course, but still). His grandfather was an inventor too and so I guess this whole thing runs in the family. The other thing is that Gates was able to access a very advanced computer in his elite high school. It is all about having opportunities and being humble at the same time. This ran in the Gates family!

Bill Gates also made friends with some smart people like Paul Allen who was also very business-minded and competed greatly with Gates on writing code and other software expertise. There are so many aspects to Bill Gates that most people probably would not know.

When people think of Bill Gates, they usually think of the billions and the geeky stuff. But he was also very well read from anything from politics and government to being a marketing genius. Gates’ mom Mary was very well connected and knew a lot of powerful individuals. It was through his mom that Gates met the CEO of IBM!

The very important thing was that his parents taught him the value of money and hard work and this translated into his life. Even in Microsoft’s early days when the company was taking off, Gates had his eye on the bottom line and would often avoid flying first-class.

Gates was also a competitor to the core and many have described it as white hot intensity the way he goes about his business. I guess he also chose his wife wisely as well as Melinda Gates is not only considered a perfect match but also understands his business. She was an executive at Microsoft for a long period of time.

Bill Gates is not only my idol, but also such a unique individual who will go down in history as the most successful businessman of this era.

 

Microsoft acquires a stake in Barnes & Noble Inc’s Nook e-reader

Barnes & Noble shares go up!

The e-books market is growing very rapidly indeed and tech giant Microsoft will look to capitalize on this market potential by putting as much as $605 million over a period of five years on the Nook e-reader by Barnes & Noble. I guess this is a very important move for Microsoft to make given that its rivals Amazon and Apple have been making some pretty big inroads on the tablet computer market that has exploded.

In six months’ time, Microsoft will have its new operating system Windows 8 out and this move to tap the e-books market is actually a very good idea for Microsoft that will allow the Redmond, WA based firm to compete with the Amazon Kindle Fire and the Apple iPad.

Microsoft is known to have a pretty significant cash hoard and this deal is actually just 0.5 percent of it. The deal also allows Microsoft to compete on the online app store front, something which it has been unable to do given the hegemony that Google, Apple and Amazon have in this business domain.

In addition to Barnes & Noble stock soaring, the firm also stands to benefit by being able to get into the digital books market and also get a lot of capital that it needed to obtain. Barnes & Noble has spent millions of dollars into the Nook development and partnering with a tech giant like Microsoft that has such deep pockets will help it greatly.

Analysts at major investment firms all seem to agree that this is a pretty solid deal for Microsoft.

Microsoft stock price rises after third-quarter Earnings Report

The Earnings Report for Microsoft was out last evening and it revealed a better report than expected. The $17.41 billion revenue and third-quarter earnings of 60 cents per share was better than what most analysts expected of $17.16 billion revenue and 57 cents per share according to a poll by Thomson Reuters.

There should be a bigger spike in revenue for Microsoft due to the soon to be released Windows 8 and this is what the giant and its investors are hoping will get the Redmond, WA based software company back among the chatter on Wall Street. CEO Steve Ballmer is very optimistic about the quarter and it is not just because of Windows 8.

There will be more value given to customers as the next version of Microsoft Office is due to be out soon along with a plethora of products and services that will serve businesses and individual consumers well. Additionally, IT departments around the world have kept upgrading their hardware and this has contributed to a great boost in revenue for Windows.

The other thing that has been driving revenue for Microsoft is the Xbox 360 that is actually the bestselling console over the last year or so. In addition, to having a dominant position in the gaming industry, Microsoft is now sitting on $59.5 billion in cash. This is actually an increase from the $52.7 billion cash it had last year.

It all seems to be looking great for Microsoft. For more tech stock news and trends visit this blog. I think it is pretty good.

 

Rumors of Microsoft selling Bing to Facebook

Facebook and Microsoft could team up to decrease Google's dominance

Microsoft has been losing money with its search engine Bing to the tune of $2.5 billion annually. This has led to some rumors that Microsoft could decide to sell its Bing operations to Facebook in exchange for a larger stake in the social networking site ahead of its much awaited IPO.

This would really make sense for Microsoft as it has been funding billions of dollars towards Bing with only losses being reported on its balance sheet. Additionally, it would actually be a mutually beneficial deal since Facebook will now have a Google-type algorithm based search engine. Facebook would actually benefit from acquiring Bing as it competes with the tech giant Google.

Facebook and Microsoft would both share a desire to try to compete against their mutual adversary Google and this is a perfect way to step up their respective games in the ongoing rivalry.

All this sounds very attractive, but Facebook seems to be having a lot on its plate right now. Mark Zuckerberg’s juggernaut is now going to record its largest acquisition ever when Facebook spends $1 billion to purchase Instagram, the photo-sharing application.

Moreover, Facebook is also busy preparing for its initial public offering on the NASDAQ. The social networking site is reported to be looking for a date in May either in the third or fourth week of that month. As of now, no one at Facebook has commented about any possibility of acquiring Bing from Microsoft in an attempt to level the playing field with Google.

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