Those who think Microsoft(Nasdaq: MSFT) is too big to grow should take note of some of the announcements rolling out of Redmond today.

First, there's the software giant's soon-to-be-released OneNote application, which has attracted 30,000 beta users since its unveiling in November. The product provides a digital replacement for your legal pad -- a pretty nifty concept. Designed with the Tablet PC specifically in mind, OneNote is also compatible with desktops and laptops. Users can easily rearrange the contents of their notes, organize them according to personal preference, quickly search across all notes, and email them from within the application.

Also today, Microsoft announced its Xbox Live online gaming service has attracted more than 350,000 subscribers -- an impressive start since its Nov. 15, 2002 launch. Significantly, in the first three months of availability, Xbox Live Starter Kits have outsold the number of Sony PlayStation2 Network Adapters by nearly 44%. That's especially remarkable considering that PS2 consoles have two-thirds of the gaming market.

While it's very early in the online gaming race, Microsoft's early lead could mark a critical turning point in the long-term direction of the gaming industry. Whichever company ultimately attracts the largest online community will have a strong edge in attracting gamers to its consoles.

Some pretty exciting stuff's going on up in Redmond. Obviously, these developments are a sideshow to Microsoft's major money-making franchises, Windows and Office, but these types of incremental innovations are likely to play a significant role in driving future revenue growth.

For those who believe Microsoft's long-term future holds promise, the stock may be worth a look at current levels. At around $23.30, the company has a market cap of $253.6 billion. If you back out its cash hoard of $56.1 billion, you get an enterprise value (EV) of $197.5 billion. Comparing that figure to free cash flow over the past year of $14.1 billion reveals an EV-to-FCF multiple of only 14. That's significantly cheaper than the S&P 500's average price-to-free cash flow of 20.3.

One wonders how Warren Buffett could say stocks are still unattractive when Microsoft is available at this kind of price.