The headline on Microsoft's
Mr. Market's reaction to said report: a 7% share price haircut.
Can we reconcile Microsoft's optimism with the market's skepticism? Discuss. I'm getting a little verklempt.
The good news for Microsoft ranges from the obvious (18% year-over-year sales growth to $15.8 billion; $0.46 of earnings per share, for a 48% annual boost) to the subtle (a balanced product portfolio performance). Hey, even the online services division increased revenue by an impressive 24% -- but it dug a bigger hole to store its 132% fatter operating losses.
With these numbers in hand, it's no wonder Mr. Softy is looking for a quick fix by shoring up the online segment with an already-profitable Yahoo!
I wonder why Steve Ballmer freaks out at the thought of losing the search and advertising wars to Google
Google seems unfocused at times, starting up expensive side projects and buying into unexpected markets -- but that's all part of a deliberate strategy to chase serendipity down and put it to work. Microsoft is doing far worse, because it throws serious muscle into those non-core segments and hopes to make something out of nothing. Many a business has copied Microsoft's ruthless strategy over the years, but the company has outgrown its own skin. Hey Steve, I think Google has a few ideas you could use -- how about 20% time or a new focus on usability? Call me.
Microsoft is a Motley Fool Inside Value recommendation, and Google is a Motley Fool Rule Breakers selection. Nintendo and Apple are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletters today, free for 30 days.
Fool contributor Anders Bylund owns shares in Google but holds no position in any of the other companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure always keeps a line open in case Redmond comes calling.