Hmm it seems that Microsoft is changing their corporate strategy going forward. I guess they are tired of being a staid concern and turning to a more growth oriented model again. This seems like a good idea for the stock price depending on what they do. Vista and Office 12 will of course sell like hotcakes because there is very little serious competitors for it. But I found this comment by Ballmer very interesting:
"If you get nothing else out of the whole day today, we are very, very, very serious and committed about driving our presence with that community, versus any and all competitors in the marketplace," Ballmer told analysts. "It is a job-one priority for our company, this transformation to services and the competition that it brings with Yahoo! and Google and everybody else."
They see their number one competitors as Google and Yahoo and not Linux and Oracle. So it looks like they are adding a higher margin services model to their slow growth software business. They seem to have already moved search to the desktop in Vista.
I would be willing to bet that internet sites will eventually show up in your search results. Depending on how good the results are people will use this rather then Google. So advertisers will end up paying top dollar for MSFT searches because they will end up in front of every Windows user and not just every person that surfs to Google.
As long as they leave a way to change the engine to another source they aren't trying for the monopoly on search. In fact they can say that anyone who wants to search further can just use IE 7.0 to do it.
The other services would be interesting to note and this Financial Times article has some possible ideas. They think they will be:
Besides existing services such as internet search and the Xbox Live online games service, new areas of interest were likely to involve communications, web-based storage and tools to help workers collaborate better, executives said at the company's annual analyst meeting.
So this means data warehousing which is a business that is growing quite well. They may try to do a Vonage type thing with internet phone calls. That would be a new and growing business that they can leverage Vista with. Finally, that collaboration thing could be an enterprise level version of Remote Assistance but with good encryption and security. Something that is similar to what GoToMyPC does. If they can take advantage of these areas MSFT could be a growth stock again.
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