In the competitive spirit of college basketball's annual championship tournament, The Motley Fool brings you Stock Madness 2007! Our writers are making head-to-head arguments for their chosen stocks (but not necessarily investment recommendations -- this is, after all, a game), and you'll pick the winners with your article recommendations and Motley Fool CAPS ratings. Who will win the right to cut down the net? Let's tip things off and find out!

This matchup comes down to how greatly you value a high level of comfort and certainty.

On the one hand, we have Motley Fool Inside Value selection Microsoft (NASDAQ:MSFT). In addition to its near-monopoly command of the operating system and productivity software markets, its server-tools offering provides another rapidly growing stream of earnings. In areas where Microsoft's first-generation products stumbled, it has begun to gain momentum. Microsoft now boasts a large lead over its rival Sony (NYSE:SNE) with its new Xbox 360 game platform, and an increasingly more interesting mobile products division. Except for the home and entertainment business, which is currently running losses getting Xbox units into homes (to generate future high-margin income from software licenses), all of these businesses provide large and secure streams of earnings.

On the other hand, we have fellow Inside Value selection Chesapeake (NYSE:CHK). Chesapeake explores for and produces natural gas and oil. These commodity products have benefited from strong pricing the last few years, but commodities are cyclical. I won't argue that Chesapeake offers an attractive valuation. Excluding market and operating risk, Chesapeake arguably offers the more attractive absolute valuation. But in a business where demand can ebb and flow, and it seems that everyone under the sun is working to develop alternative fuels and energy sources, why on earth would one exclude those risks?

Microsoft names the prices on its products. Over the years, it's been able to gradually raise those prices and watch its overall market grow. It has subsequently sought more markets where it can establish a similar level of dominance. Some will win, some will fail, but the winners should more than make up for the losers. In the meantime, the rising earnings feed the company's rapidly increasing dividend payouts, and when fear and doubt set in, the company has shown confidence in itself by buying back its own shares.

In contrast, dilution is one of the largest concerns investors have at Chesapeake. Chesapeake is very likely to see the market for its natural gas grow, but it doesn't control the price of its product -- the market does. Chesapeake can hedge over various periods of time, but at a cost, and only for finite periods of time. Chesapeake has large reserves, but as the company makes sales, it needs to drill new wells and discover additional supply to replenish that which has been sold.

The threats to Microsoft are visible. Google (NASDAQ:GOOG) is clearly trying to attack the office-productivity franchise, using its online search products as a jumping-off point. Apple (NASDAQ:AAPL) is attacking the entire PC industry, using entertainment and multimedia platforms such as the iPod and its iLife suite. But Apple has also shown that eroding Microsoft's dominance doesn't happen overnight. The last time I checked, Microsoft's sales and profits continue to grow. In the end, it's not much of a contest. Chesapeake may do well, but the predictability of Microsoft's sales, and in turn, its earnings, make it the winner.

Does this stock deserve to move onto the next round? If you think so, simply follow this link and rank the stock "outperform" in Motley Fool CAPS. If not, vote it "underperform." Later this week, we'll tally your votes to determine which stocks will advance one step closer to the title.

Read our opposing article on Chesapeake, or see all of the other entries in this tournament.

Think you could pitch your favorite stock -- or ditch your least favorite one -- in 27 seconds or less? That's what we're doing over at Motley Fool CAPS. Check out our new stock videos, including our entry for Microsoft.

At the time of publication, Nathan Parmelee had no financial interest in any of the companies mentioned -- but that's nothing personal. He was ranked 66th out of 24,619 CAPS investors. The Motley Fool has an ironclad disclosure policy.