Member Since: Oct 10, 2004
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10-11-2006, 12:36 PM
Another Fierce Market
Paired with the history of failures in the consumer electronics space, what will save Microsoft's bacon? Some analysts seem to think that Microsoft has billions in the bank to throw away while leisurely chasing down the iPod.
But that's not true. That money belongs to shareholders, because Microsoft is owned by shareholders, just like every other publicly held company. Anyone who says Microsoft has lots of money to burn hasn't ever met angry shareholders.
Microsoft's shares are themselves competing in a free market: the stock market. If Microsoft doesn't continue to create new markets and find new revenues, its investors will pull out to invest in companies who can.
When that happens, Microsoft’s valuation will sag. There are plenty of companies with glorious pasts who suddenly lost their stock valuation after a series of badly executed strategies. The mid-90's Apple is a good example.
After two decades of brilliant success, Apple's valuation dropped into the toilet in the mid 90's when the company failed to deliver progress and demonstrated an inability to find new markets and new sources of revenue.
The tech industry is full of one-time leaders who fell down dead. Anyone who thinks Microsoft is immune to failure is simply choosing to not pay attention to reality.
Next: consider the lessons learned in the real world reversal of fortune between Microsoft and Apple from just over a decade ago, in Platform Deathmatch - 1990-1995: Apple vs. Microsoft in the Enterprise