Follow us:

Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

October 22, 2008 at 9:08 AM

Microsoft: Stable cash-cow or fast-growing tech?

Interesting essay this morning from Eric Jackson at TheStreet.com on the choice and challenge facing Microsoft CEO Steve Ballmer.

“More than ever, Microsoft shareholders are wondering where Ballmer is leading the company. Will Microsoft be a large cash-cow conglomerate that pays a nice dividend and grows much more slowly?

“Will it make a splashy and expensive acquisition of Yahoo!, Research In Motion, or SAP to try to keep up a faster rate of growth? Or will it be stuck in the middle of those two very different strategies, trying to do both?”

I don’t think that question will be answered when the company reports fiscal first quarter earnings Thursday (more on that later today), but it’s something to keep in mind as investors eye the stock, trading, as Jackson notes, in the same range it was 10 years ago.

Jackson, founder and president of Ironfire Capital and a vocal (former) Yahoo shareholder, continues:

“If you’re a value institutional investor and buy into Microsoft now because of its low price-to-earnings ratio and dividend yield, you face the possibility that Ballmer might change the rules of the game next week with another ‘transformational’ acquisition. This ‘undefined strategy risk’ is a weight on the stock price.”

What do you think Microsoft is? What should it be?

Comments | More in Steve Ballmer, Strategy

COMMENTS

No personal attacks or insults, no hate speech, no profanity. Please keep the conversation civil and help us moderate this thread by reporting any abuse. See our Commenting FAQ.



The opinions expressed in reader comments are those of the author only, and do not reflect the opinions of The Seattle Times.


The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited seattletimes.com access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Activate Subscriber Account ►