Break up Microsoft to Unlock Value? Great Idea!

I have to say that Cramer makes all kinds of sense with this idea.

Microsoft has to do "something wild," Cramer explained, like spinning off the Xbox business that is "buried within" the company, or turning Nokia back into a pure cellphone company and using the proceeds to buy a company like Sprint. "You could go buy Netflix with Xbox," he said, and run the Windows business like a utility company with reliable cash flows.

Cramer listed the big components as the Windows operating system business, an entertainment business-including Xbox-and the "other" business with the Nokia cellphone division as a cornerstone. 

First you get a CEO that knows how to integrate businesses and not just blow money on something you have to write down 3 years later. AKA the Ballmer special. You can no longer waste money on some crap and bring products to market 3 years after your competitors. It didn't hurt for years because Windows and Office propped up all the losers. That won't fly now that people have less use for PCs going forward.

The first piece would be Nokia and Sprint aka the Windows phone segment and call it Microsoft Telcom. You would have a company that pushes the Windows phone and can tightly integrate it with the Sprint Network. You could also sell your competitors phones as well because they want to keep them on the Sprint Network as much as possible.

Then you put XBox and Netflix together and call that Microsoft Entertainment. I guess Bing would go here. You can build out this segment by adding a company like Lions Gate Films to create more content for Netflix. The idea of a dedicated subsidiary pumping out movies, TV shows, and other content for Netflix is a no-brainer. This would be the high margin company that will be fighting the cable companies for a share of the living rooms.

Finally you have slow-growth regular Microsoft which will be just milking the Windows and Office cash cows until they are dead. This company will pay a hefty dividend and roll out software year after year. You can put the cloud business, virtual server, and the Software as a Service businesses here.