Monday, November 8, 2010

Is Microsoft slipping?

With the recent announcement that Microsoft CEO is choosing to sell nearly $2 billion of stock, one must wonder whether the feeling inside Microsoft headquarters is one of pessimism rather than optimism.  Like all things in life, the business world is under constant change, rarely does one company stay on top of a particular industry over a long period of time.  Microsoft has been at the forefront of the IT industry since the introduction of the computer, but has recently been rivaled heavily by companies such as Google and Apple as the computing industry has moved more mobile.  While Microsoft is launching its smartphone to compete with the aforementioned companies to compete in the smartphone market, it is quite apparent that the proportion of Mac users is steadily rising.

Therefore, this announcement may be a sentiment that Microsoft executives may feel the pressure from their competitors.  CEO Steve Ballmer states that he is excited about Microsoft's new product offerings and prospects, but its hard to believe he would sell as Microsoft just initiated a dividend boost and buyback company if he were that confident.  These are stock characteristics of a maturing company with low growth, which is where I believe Microsoft stands today.  It is likely we will see a new tech giant emerge as the software leader in the next 10-20 years, as the business world always has a way of being cyclical.

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