Microsoft Slims Down and Google Fights Diabetes

Microsoft gets set for job cuts, while Google partners with Novartis on smart contact lenses.

Jul 15, 2014 at 10:16AM
Longview

U.S stocks are marginally higher on Tuesday morning, with the benchmark S&P 500 and the narrower Dow Jones Industrial Average (DJINDICES:^DJI) up 0.13% and 0.21%, respectively, at 10:10 a.m. EDT. After offering up his sweeping vision for Microsoft's (NASDAQ:MSFT) transformation in a 3,100-word memo Thursday, CEO Satya Nadella is getting down to brass tacks of implementing those changes. According to Bloomberg, the company will announce what could end up being the most significant job cuts in its history as early as this week. Meanwhile, despite the middling success of Google Glass, Google (NASDAQ:GOOG) (NASDAQ:GOOGL) is pushing forward in wearable technology, this time teaming up with Novartis to develop "intelligent" contact lenses. Apple (NASDAQ: AAPL) is on notice.

Handholding Zoomedin

Source: Google.

In his memo last week, Nadella made it clear to investors and the broader technology community that Microsoft remains committed to hardware, but he also delivered a pointed message to his employees: The organization must become flatter and more agile. From the get-go, this produced speculation that job cuts would follow, with the Nokia handset business, which Microsoft acquired last year, thought to be a prime target. If this morning's report from Bloomberg is accurate, it won't be long now before the Redmond, Wash., software giant makes a job restructuring official.

The acquisition of the Nokia unit, which was completed in April, added approximately 25,000 employees to bring total employee count to more than 127,000 as of the beginning of June. In announcing the acquisition, Microsoft had promised to achieve $600 million in cost savings within 18 months, so this seems like an obvious area to make cuts by focusing on any overlap between the two organizations.

However, the Nokia acquisition won't be the only target for cuts, as it appears Nadella is reviewing the entire organization -- something Microsoft is not accustomed to. By moving with speed and purpose, Nadella is "walking the walk" after having talked the talk. Microsoft shares are up this morning, up 0.53% at 10:10 a.m. EDT.

It's a good thing Microsoft is learning to move more swiftly – you need to be quick on your feet when you're competing with Google. Back in January, the company announced that it was testing a "smart" contact lens for diabetics that could monitor glucose levels in tears thanks to a miniature wireless chip and a glucose sensor embedded between the two in the lens. However, the project has now achieved a new level of commercial credibility, with Google and Swiss health care company Novartis announcing yesterday that they are partnering to develop and commercialize the lenses. Novartis is a significant actor in the eyecare market through its Alcon unit, its second largest business.

Even more remarkable: Google and Novartis are looking beyond the glucose monitor function in seeking to develop a contact lens technology for people who struggle to see near objects clearly. Novartis CEO Joe Jimenez compared the technology to an autofocus lens in a camera.

Apple's new HealthKit platform to track health functions was one of the main attractions at its World Wide Developers Conference at the beginning of June. Google then countered with Google Fit at its own even several weeks later. Wearable technology is a natural fit with health care, which is a massive new market for "traditional" technology companies (as opposed to medical devices manufacturers). The race is on, with huge potential benefits for consumers, companies, and their shareholders.

Leaked: This coming blockbuster will make every biotech jealous
The best biotech investors consistently reap gigantic profits by recognizing true potential earlier and more accurately than anyone else. Let me cut right to the chase. There is a product in development that will revolutionize not just how we treat a common chronic illness, but potentially the entire health industry. Analysts are already licking their chops at the sales potential. In order to outsmart Wall Street and realize multi-bagger returns you will need The Motley Fool's new free report on the dream-team responsible for this game-changing blockbuster. CLICK HERE NOW.

Alex Dumortier, CFA has no position in any stocks mentioned. The Motley Fool recommends Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), Google (C shares), and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers