There are certain circumstances when a person will try to remain optimistic. For example, you are leaving on vacation and the weather report states it will rain. Naturally, it is normal to attempt to remain optimistic and believe that the forecast is not correct and it will prove to be good weather.
In the past few weeks there have been various reports and announcements concerning Microsoft and its search initiative. With the various reports it is difficult to remain optimistic in regards to Microsoft.
In April it was announced that Mr. Ballmer was resuming talks with Yahoo. It was reported that Mr. Ballmer was in discussion with Ms. Bartz in regards to a possible search and advertising deal. Refer to: http://online.wsj.com/article/SB123937960877408815.html
The above report initially created some optimism. There was a glimmer of light as the campaign hoped that Microsoft was pursuing what was suggested in the "New Strategy". There was optimism that talks concerning a search deal would lead to Microsoft gaining additional market share in this sector.
This campaign has on numerous ocassion expressed disgust in regards to the Yahoo bid. Mr. Ballmer pursued a 65% premium bid for Yahoo. This bid was valued at approximately $45 billion.
This failed bid was Mr. Ballmer's attempt to increase Microsoft's market share within this sector. This attempt by Mr. Ballmer should come as no surprise. A recent report indicates that Microsoft still trails both Google and Yahoo in the search sector. Refer to : http://digitaldaily.allthingsd.com/20090518/google-has-search-market-share-microsoft-not-so-much/?reflink=ATD_mktw_quotes
However, Mr. Ballmer's desire to increase market share and compete with Google creates concern. This leads to the next report.
Microsoft recently announced it was issuing bonds. Refer to: http://online.wsj.com/article/SB124205546206507039.html
What is perplexing is the notion that a company that has never had debt and has $25 billion in cash is seeking to issue debt. Is Mr. Ballmer issuing debt to pursue a major acquisition?
Is Mr. Ballmer planning on pursuing Yahoo again?
Microsoft recently announced it will be releasing a New Search Engine called "Kumo". Refer to: http://digitaldaily.allthingsd.com/20090519/microsoft-to-debut-new-search-at-d-all-things-digital/
The above article references that Microsoft is attempting to compete with Google that increased its market share. According to the report Microsoft has lost market share from a year ago.
What is causing the greatest difficulty to remain optimistic?
Microsoft several years ago eliminated Netscape from the landscape. Netscape was once the leading search engine. Microsoft through an initiative dominated the sector. However, it then gets eliminated by Yahoo then annihilated by Google.
Mr. Ballmer realising that Google is dominating this important sector attempts to acquire Yahoo. Again, a 65% premium bid valued at $45 billion.
Now there are reports that Mr. Ballmer is resuming talks with Ms Bartz concerning a deal with Yahoo. There is reports that Microsoft despite having $25 billion in cash issued debt for a potential acquisition. There is a report that Microsoft is realising 'Kumo" in an attempt to compete with Google.
Here is the reason its hard to be optimistic. Based on the numerous reports it appears that Mr. Ballmer is "searching" for anything that will compete with Google. This campaign has mentioned that in 2007 at an analyst meeting when confronted with potentially acquiring Yahoo that Mr. Ballmer stated "Microsoft is organic minded". However, less then one year later Mr. Ballmer attempted to acquire Yahoo. This change in direction and almost sporadic strategy displays that Mr. Ballmer has no "Real" vision in regards to competing with Google.
Resuming talks with Yahoo, issuing debt for a possible acquisition, and releasing a "New Search Engine" displays characterisitics that Mr. Ballmer is simply doing everything but eventually it will prove to be nothing.
Perhaps eventually a company will challenge Google and maybe even remove Google from the Throne as undisputed King of Search. However, based on Mr. Ballmer's past record of poor decisions and the conflicting reports and direction it appears evident it will not be Microsoft that takes the Throne.
It appears that the forecast for Microsoft will continue to prove cloudy.
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