The World's Most-Watched Software Company

Among visitors to The Motley Fool, software is king. The industry is the clear leader in terms of the number of times companies were added to visitors' watchlists. And today, among the hundreds of players that investors are keeping tabs on, we're able to single out the one software company that is garnering the most attention.

People watch stocks for different reasons -- they're waiting for a dip in price, watching for a specific catalyst, gathering all the news and information that might affect stocks they already own, or considering a sell. Regardless of their motivation, we can better understand market sentiment by seeing who's watching what. With the Fool's free My Watchlist service now 3 months old, we have tens of thousands of people telling us the businesses that have, for whatever reason, piqued their interest.

The most-watched company in the most-watched industry is ...

Drumroll, please
Looking at the aggregate data, we can see that Activision Blizzard (Nasdaq: ATVI) is the clear leader in terms of watch interest, the percentage of people keeping an eye on the software industry in general who are specifically watching each company. And they're watching for good reason. My computer-nerd colleague Eric Bleeker recently wrote this in his review of the worst software stocks of 2010 (which, incidentally, didn't include Activision):

Another interesting subplot [next year] will be American gaming companies. We already saw that Chinese [gaming] companies struggled in 2010, but it's been a rough year for their American counterparts as well. That's because consumers are shifting their dollars away from spending heavily on games that cost $60 apiece and are spending more money on casual gaming experiences such as Zynga's FarmVille. Despite a successful relaunch of its wildly popular Starcraft franchise, Activision Blizzard needed a late-year rally to market perform. Investors in the company will have to hope that Activision Blizzard can either decouple itself from the drop in spending through its superior gaming franchises, or that consumers will shift their tastes back to higher priced gaming options.

Here are the rest of the top six most-watched companies in the industry with their watch interest along with the stocks' CAPS rating (out of five possible stars) to show the sentiment of our free investing community.

Clocking in with a surprisingly high watch interest for such a small company, language software provider Rosetta Stone might have received a somewhat artificial boost from my recent article, "One Stock David Gardner Thinks You Should Watch." In that, I wrote among other things, "That's a large part of the reason David thinks the company -- which shoots to make learning a language fun, easy, and effective -- has the potential to be a 10-bagger. It shares many of the characteristics of some of David's very best recommendations." So yeah, that probably encouraged people to put it on their watchlists.

And Microsoft, though hardly lacking for attention on its own, might have received a bump from a recent article in which the head of our analyst development program proclaimed the company his biggest winner at the moment.

Whether you're keeping an eye on the industry giants or are watching the up-and-comers, it pays to watch. You can make smarter investing decisions with your own version of My Watchlist, free from the Fool. Click below to start following one of the stocks mentioned above:

• Add Activision Blizzard to My Watchlist.
• Add Rosetta Stone to My Watchlist.
• Add Microsoft to My Watchlist.
• Add Nuance Communications to My Watchlist.
• Add VMware to My Watchlist.