Microsoft Is a Bum Magnet

Microsoft (NASDAQ: MSFT  ) has a thing for losers.

Barnes & Noble's (NYSE: BKS  ) Leonard Riggio is the latest disgruntled founder to want to privatize his struggling company. In an SEC filing yesterday, Riggio revealed that he aspires to acquire his company's flagship bookstore business.

Riggio wants the retail chain and the related BN.com website. He's the board's chairman and owns 30% of the outstanding stock, so one could reason that he knows the company pretty well. You know what he doesn't want? Riggio has no interest in acquiring the fledgling Nook and meandering campus bookstore business that Microsoft bought into last year.

Yes, Mr. Softy seems to be left holding the bag on the struggling e-book platform and a chain of college bookstores that's growing obsolete as schools turn to digital textbooks.

It's not the first time that Microsoft has shelled out big money for a laggard.

Earlier this month Microsoft agreed to kick in $2 billion in the proposed $24 billion deal to take PC giant Dell (UNKNOWN: DELL.DL  ) private.

One can always argue that Microsoft's investments were either opportunistic or tactical. Buying into the Nook could've swayed Barnes & Noble to abandon Android for its Nook tablets. It didn't. One can hope that Microsoft's investment in Dell will keep it from cranking out Android tablets and smartphones. It won't.

Previous 10-figure commitments have been tethered to conditions.

Microsoft agreed to reward Yahoo! handsomely in exchange for letting Bing take over the portal's search business. Microsoft has promised Nokia (NYSE: NOK  ) "billions" for its support of Windows Phone 8.

However, isn't this a pretty sad lot?

A portfolio of Barnes & Noble, Dell, Yahoo!, and Nokia may have been great in the 1990s, but all four companies have had rough years lately. Yes, some of them have rallied recently, but the four companies still lag their peers.

Why is Microsoft partying like it's 1999? Why is it getting fixed up on DotComBubbleMingle?

Yes, once in a while Microsoft does manage to make an early investment in a fresh market leader, but there are too many lovable losers on its list. The world's largest software giant needs a new matchmaker.

Hard times for Mr. Softy?
It's been a frustrating path for Microsoft investors, who've watched the company fail to capitalize on the incredible growth in mobile over the past decade. However, with the release of its own tablet, along with the widely anticipated Windows 8 operating system, the company is looking to make a splash in this booming market. In this brand-new premium report on Microsoft, our analyst explains that while the opportunity is huge, the challenges are many. He's also providing regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 26, 2013, at 7:30 PM, applefan1 wrote:

    And they gouge their users for licensing fees. Birds of a feather flock together.

  • Report this Comment On February 26, 2013, at 7:56 PM, SuntanIronMan wrote:

    Microsoft's Dell investment was really just a loan. They loaned Dell $2 billion to help them go private. Supposedly there is no ownership stake. Relative to Microsoft's use of shareholder money in the past (essentially throwing it into a bonfire), this seems fairly risk-free and uncomplicated.

  • Report this Comment On February 27, 2013, at 10:07 AM, techy46 wrote:

    Microsoft's all about software capitalism, licensing software for productivity, while Apple's all about gadget entertainment and status and Google's all about software socialism, giving away stolden IP, to promote their ad click advertising virus. The masses will screw themselves with Google, forfeit economic position and jobs, just like they have with WalMart because of their insatible consumption of content and other worthless stuff. Most peoples get exactly what they deserve in the long run.

  • Report this Comment On February 28, 2013, at 7:58 PM, TheRealRacc wrote:

    Nice assessment Techy46. I'll stick with the one that pays a dividend. And can't get ousted overnight by a competitor.

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