Microsoft future growth rely on what MSN business can hold up half the sky
When examine the profit potential Microsoft and find that many business all have good potential.
On one hand, Microsoft will soon introduce a widely anticipated's best-selling game, it is still in development a lot of operating system and application software of new products; On the other hand, Microsoft is the growth potential of MSN.
Microsoft released most of the researchers report in the soft rib is one of its Internet business department, MSN department's sales income is $564 million, compared with the same period last year, up only 1%. MSN department contains the order based on Internet access service, online content portal, search engines, in the access services and content, it faces AOL competition, in search and advertising business, is faced with Google and yahoo's competition.
MSN: growth engine?
Although accounts for only of overall sales income of Microsoft is very small part, MSN's future is very important, because it has become Google and yahoo in the search field successful competitors, MSN can give Microsoft bring some very need growth.
In three years, Microsoft's stock has been no real impression, analysts and investors have to Microsoft's growth performance up any hope, especially because its software and operation systems business is saturated, won't appear any significant growth.
Think MSN will drive the Microsoft earnings growth optimists mentioned its server software business department of success. Fulcrum Global Partners LLC analysts Milton friedman says that, despite its server software business early start slowly, it has developed into a highly profitable business, has driven this quarter sales income growth.
Accounting for 75% of the advertising business income MSN year-on-year growth of 20%. MSN AD revenue from MSN. Com site on the display advertising, and the search engine advertising. But, MSN AD revenue is quarter dropped 4% of Microsoft's chief financial officer Chris admits, MSN search AD revenue did not come up to the expectations. In addition, more like AOL MSN in architecture, not yahoo or Google. As more and more consumer to broadband connection, dial-up service income fell in the stable.
Microsoft hope through the launch "advertising center" to increase sales. Microsoft has been in France and Singapore launched the product, is the United States test. Microsoft hope it helps strengthen the MSN and yahoo and Google than competitiveness.
Put all your eggs in one basket?
SG Cowen analyst cloth los and Europe said, though he feels media to Microsoft and Google, yahoo competition of the report was "exaggerated", but no suspense, bring in advertising revenue, as Google, yahoo Microsoft really well done. MSN does for Microsoft is very important, it sees the create a and Google, yahoo similar enterprise of business opportunities, will give Microsoft add momentum of growth.
Caris analyst mark said, paid search market competition is not fierce, because it also is not close to the saturated, Microsoft, yahoo, Google and other manufacturers are still have enough development space.
Milton friedman says, because of the growth potential has a, Microsoft need to make future with MSN relevant decision. Milton friedman says that for Microsoft is concerned, a reliable strategy is to search ability sold to AOL. But, no matter adopt what kind of measures, Microsoft should be more decisive some. He said Microsoft need to put all your eggs in one basket, or quit, or quickly solve the problems now.
Atlantic Equities analyst Christopher also have the same feeling, he said, unless take steps to solve the problem now, or Microsoft will become the third, four big search engine provider, and this is Microsoft do not want to do.