Microsoft Cheat Sheet: A New Business Model for Windows 8?

MSFT Rising With Markets
Markets are staging a rebound with broad-based buying as fears are quelled with the ongoing credit crisis in Europe and as gold bounces back after its historical 3-day sell off. Shares of MSFT (NASDAQ:MSFT) are up as well, however weaker than the remainder of technology. Upcoming catalysts include Windows 8 and entrance into the tablet market; Windows Phone 7 / Mango rollout and adoption with hardware partner Nokia (NYSE:NOK); strides against current market leaders in cloud computing; making money in the online business, including integration of Skype and improving the search / display business; and continued evolution of Kinect and next generation Xbox console. The stock currently trades at 7.2x Enterprise Value / TTM Free Cash Flow.

Microsoft Needs A New Business Model For Windows 8 Tablets (SplatF)
Microsoft’s Windows division is still a monster. But as the industry shifts toward tablets, the story gets less certain for Microsoft. With different economics and pricing for tablets than PCs, how will it build a meaningful growth business? It may need to figure out a new model. How?

  • Selling integrated hardware and software
  • Office add-on revenue
  • App store revenue
  • Cloud services
  • Advertising
  • Incentivizing Windows tablet consumers to buy Windows PCs (how?)

Sounds as though they need to be more Apple-like.

Is Ballmer Microsoft’s George Dubya? (Fortune)
One person seems to think so. “Steve Ballmer has done to Microsoft what George W. Bush did to the United States.” Blogs are having a field day mining the stream of comments left on Mini-Microsoft after Friday’s annual employee meeting. The tone and volume of the remarks made after this year’s gathering suggest that morale in Redmond has hit a new low. They make chilling reading for Microsoft investors. It’s a far cry from the optimism presented on Friday.

EU Should Note Skype Acquisition As Possible Antitrust (Reuters)
European Union regulators now vetting Microsoft’s bid to buy Skype should block any anti-competitive bundling of Microsoft’s Windows software with the Internet phone service, according to a competitor. Microsoft’s $8.5 billion acquisition of Skype will enable Windows Phones to compete directly with Google (NASDAQ:GOOG) and Apple smartphones which already feature video chat. The deal was approved by U.S. antitrust regulators in June.

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