tag:blogger.com,1999:blog-4815867514277794362.post6267009909316784894..comments2024-03-08T06:18:28.125+11:00Comments on Bronte Capital: Microsoft laid bareJohn Hemptonhttp://www.blogger.com/profile/03766274392122783128noreply@blogger.comBlogger38125tag:blogger.com,1999:blog-4815867514277794362.post-21816491866171466832010-10-15T00:47:52.483+11:002010-10-15T00:47:52.483+11:00These two recent developments may be of interest t...These two recent developments may be of interest to you too:<br /><br />* http://gigaom.com/2010/10/12/linux-starts-to-eat-microsofts-lunch-in-servers/<br /><br />* http://blogs.computerworlduk.com/open-enterprise/2010/10/microsoft-gives-its-blessing-to-openofficeorg/index.htm?cmpid=sbslashdotschapmanF. Heinsennoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-89582834306614060572010-09-14T10:54:50.692+10:002010-09-14T10:54:50.692+10:00nice, MSFT up 5% on news that it's going to a ...nice, MSFT up 5% on news that it's going to a dividend.<br /><br />now all the value funds can breath a sigh of reliefAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-15308757946680671642010-09-14T02:33:30.503+10:002010-09-14T02:33:30.503+10:00I had no idea that Microsoft dropped the ball on t...I had no idea that Microsoft dropped the ball on this. I have seen Microsoft loosely handle other aspects of their business. Example. I am an avid online Xbox 360 player and Microsoft just announced they are increasing the buy in price for their full one year subscription from $50 to $60. What does this extra $10 do for me. Absolutely nothing!! Since the fee increase I have not seen any changes to the service they promised to deliver. Even better, Microsoft seems to not care about the consumer at this point and makes most of us feel they are in this business to make a quick dollar. <br /><br />Come on Micorsoft. Pull it together.<br /><br />Come check out my blog at,<br /><br />http://www.wealthvest.com/blogSean Brownehttp://www.wealthvest.com/blognoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-9705158122338381662010-09-13T23:09:52.227+10:002010-09-13T23:09:52.227+10:00MSFT's handicap is its aging desktop operating...MSFT's handicap is its aging desktop operating system monopoly: everything it does--everything--is built to drive the Windows OS onto other platforms, including, miserably, smart-phones.<br /><br />The exception, of course, is X-Box, which is why X-Box is the only success MSFT has had outside its original OS monopoly.<br /><br />My question--and I am an older demographic, so this may not be worth much--is based on the fact that while I regularly search for restaurants, street addresses and businesses on an iPhone, I almost never click through an ad or URL that comes up: how does GOOG replace its desktop search franchise with a mobile search franchise?<br /><br />JM<br /><br />P.S. as to the MSFT valuation issue, I believe, FWIW, that MSFT is a value trap, and will remain so as long as Steve Ballmer refuses to let his children use Apple products.Jeff Matthewshttps://www.blogger.com/profile/04755227781599499378noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-58393504038424940782010-09-13T02:02:18.787+10:002010-09-13T02:02:18.787+10:00This continues from my first post...
The new grow...<i>This continues from my first post...</i><br /><br />The new growth area is in 'reduced' devices. This is Apple's territory, as it understands stripping down feature sets to create easy to use devices, and also of Google and other Web 2.0 companies. It is an anathema to Microsoft, whose strategy has been to add features, not remove them.<br /><br />Windows Mobile has been a disaster up until now for exactly that reason. W7 Mobile shows a first glimmer of hope that at least one team in the company have grasped this. However it will require a seismic shift in the attitudes of the top management for Microsoft to maintain its position in this new market.<br /><br />My conclusion was, yes, dividends will be good for the next couple of years, but if the market takes fright at the signs that Microsoft no longer understands the market it is selling to (Kin, for instance) the investor stands to lose much more in the stock price.<br /><br />The question is: when (or if) will the market will grasp this? (Which is why I don't play the markets: It's about second-guessing the state of mind of other investors, not about predicting the future!)<br /><br />[This is my fourth attempt to post this: the first failed for being too long, the second lost this second part, the third gave service unavailable. If Blogger cannot create a decent commenting system of their own, maybe they should use Disqus?!]David Hamiltonhttp://david.hamilton.namenoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-18192890727622799782010-09-12T13:48:02.002+10:002010-09-12T13:48:02.002+10:00With RIM trading at about 8x forward earnings....i...With RIM trading at about 8x forward earnings....is there a play here for MSFT to buy their way into the mobile market. Given both MSFTs and RIMs dominance in the corporate/enterprise market would RIM provide MSFT with the mobile platform that MSFT could leverage to continue to hold on to their competitive advantage?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-70908887082645297632010-09-12T05:57:04.236+10:002010-09-12T05:57:04.236+10:00Hi John-
What are your thoughts on shorting Nokia...Hi John-<br /><br />What are your thoughts on shorting Nokia? I just don't feel that they can take market share from RIM + AAPL, even with new CEO. Has the opportunity passed?<br /><br />ThanksAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-85991437742682732572010-09-11T14:52:42.881+10:002010-09-11T14:52:42.881+10:00What do you think of telstra?
They don't seem...What do you think of telstra?<br /><br />They don't seem at all competitive for web or mobile and the competition is increasing. Google mail apparently lets you call over the web for basically nothing. <br /><br />At first it looks cheap with a 10% yield but you would think that they continue to decline.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-22804723159648430902010-09-11T13:13:21.882+10:002010-09-11T13:13:21.882+10:00The fund website is a little embarrasing - but we ...The fund website is a little embarrasing - but we someone dig up the Telstra cable... and our server went off-line.<br /><br />Everything will be cloud-hosted soon.<br /><br />(:<br /><br />JJohn Hemptonhttps://www.blogger.com/profile/03766274392122783128noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-54940707350898058612010-09-11T08:24:14.030+10:002010-09-11T08:24:14.030+10:00John Whats up with your fund's website?John Whats up with your fund's website?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-91103677867715455022010-09-11T04:39:17.375+10:002010-09-11T04:39:17.375+10:00to become a better investor,
accept blame for lo...to become a better investor, <br /><br />accept blame for losses. <br /><br />banish gains to being pure luck.<br /><br />anon,<br /><br />R. DobbAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-31400159433028230972010-09-10T23:19:42.005+10:002010-09-10T23:19:42.005+10:00This may be of interest to you: http://broadcast.o...This may be of interest to you: http://broadcast.oreilly.com/2010/09/debunking-the-1-myth.htmlAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-23594090811728578002010-09-10T18:49:19.973+10:002010-09-10T18:49:19.973+10:00A friend recently announced that he was thinking o...A friend recently announced that he was thinking of buying MS shares: I tried to talk him out of it.<br /><br />His argument was that dividends will be very good over the next 2 years on the back of sales of Windows 7. Which is true.<br /><br />My points were twofold: <br /><br />Firstly that Microsoft has no tablet strategy, with touch device sales predicted to overtake PC sales in as little as 2 years. This will seriously hit PC revenues. Windows 7 is not fit for purpose on a touch a device, and W7 Mobile is a) functionally two years behind the competition and b) not yet targetted at slates. Look at the proportion of Apple's revenues that come from touch devices - Macs are now just an interesting sideline!<br /><br />Secondly, the Microsoft that dominated the PC world is gone. That version understood leverage like no other: it would use contracts with PC makers to get Windows on every box, OS market share (Windows) to sell applications (Office), applications to sell server software (Exchange Server), etc. in a 'virtuous circle'. It built a stack that was incredibly difficult for competitors to penetrate.<br /><br />Version 1 of Microsoft died about 10 years ago. The leverage that it used so effectively was severely hampered by the DOJ, and it allowed competitors enough oxygen to breathe. <br /><br />It also relied on continual change to keep one step ahead of the competition: e.g. the feature set of Office kept growing, not from consumer demand, but from the need to sell new versions and remain 'ahead' of the competition. Today, there are many office suites that have every feature that the customer could think of: there is no scope for MS to add new features.David Hamiltonhttp://david.hamilton.namenoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-80009817517060454192010-09-10T18:30:24.885+10:002010-09-10T18:30:24.885+10:00Google/blogger just really annoyed me. If your po...Google/blogger just really annoyed me. If your post is too long, it can't be posted - that's okay - but IN TELLING YOU THIS IT LOSES YOUR POST.<br /><br />Good thing I've seen this particular blazing incompetence so many times that I always to copy the contents of a form before posting.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-12392292228703951792010-09-10T18:29:03.383+10:002010-09-10T18:29:03.383+10:00Part 2
======
But I think that's actually an i...Part 2<br />======<br />But I think that's actually an incorrect question. If Windows is to be like a phone app, *no existing software can be used*. The entire use paradym is inappropriate.<br /><br />Of course, you'll have OfficePhone being released - but how can you have a phone-app-simplicity-level *complex application*?<br /><br />I begin to think for complex tasks, you need detailed control and that means not-like-a-phone.<br /><br />But there are lots of non-complex tasks. They all fit on a like-a-phone OS.<br /><br />But of course Linux *is* a not-like-a-phone OS. But it has a like-a-phone layer on top, when it's on a phone.<br /><br />And that I think brings this full circle. MS could make a like-a-phone layer for Windows. Linux already has. Which wins on the desktop? answer I think depends on who starts first and who's incumbent. So MS are incumbent, but Linux seems to have a head start.<br /><br />I heard rumours Windows will be ported to ARM (the main phone CPU). I can see it making sense for Windows to try to get onto phones - if you can have the same like-a-phone layer on the desktop and the phone, great! but they don't *have* a like-a-phone layer yet. Linux does. But I can't yet see anyone trying to push Linux-like-a-phone onto desktops for non-computing users.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-75302426139998605922010-09-10T18:28:44.614+10:002010-09-10T18:28:44.614+10:00Part 1
======
MS, now and at the time the Justice ...Part 1<br />======<br />MS, now and at the time the Justice Dept went afte them, holds a monopoly in desktop/laptop operating systems.<br /><br />UNIX/Linux were and are a true competitor in the server market. What has changed since then is the emergence of Linux as the OS of choice in a range of devices where Windows was never previously used - the embedded and phone market.<br /><br />The phone market may be a way to attack the desktop market. *Maybe*. The phone OS, where it is for highly non-computing people, presents functionality in a highly application-specific manner. It's will be like using a console, not like using a PC.<br /><br />However, it seems to me this approach is *needed* on the PC, to make the PC accessable to non-computing users.<br /><br />How would you feel if your PC OS made your PC like a giant phone?<br /><br />But then why have a PC? your phone can do a lot of what you want anyway. Just hook it up to a monitor/keyboard. For a wide range of users, the phone alone may offer sufficient functionality.<br /><br />But what if *MS* come up with a Windows which offers the phone-like functionality? it won't be identical to the Linux phones, but will it matter more than being able to use all your existing software?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-88980483040779615102010-09-10T18:28:22.060+10:002010-09-10T18:28:22.060+10:00MS, now and at the time the Justice Dept went afte...MS, now and at the time the Justice Dept went afte them, holds a monopoly in desktop/laptop operating systems.<br /><br />UNIX/Linux were and are a true competitor in the server market. What has changed since then is the emergence of Linux as the OS of choice in a range of devices where Windows was never previously used - the embedded and phone market.<br /><br />The phone market may be a way to attack the desktop market. *Maybe*. The phone OS, where it is for highly non-computing people, presents functionality in a highly application-specific manner. It's will be like using a console, not like using a PC.<br /><br />However, it seems to me this approach is *needed* on the PC, to make the PC accessable to non-computing users.<br /><br />How would you feel if your PC OS made your PC like a giant phone?<br /><br />But then why have a PC? your phone can do a lot of what you want anyway. Just hook it up to a monitor/keyboard. For a wide range of users, the phone alone may offer sufficient functionality.<br /><br />But what if *MS* come up with a Windows which offers the phone-like functionality? it won't be identical to the Linux phones, but will it matter more than being able to use all your existing software?<br /><br />But I think that's actually an incorrect question. If Windows is to be like a phone app, *no existing software can be used*. The entire use paradym is inappropriate.<br /><br />Of course, you'll have OfficePhone being released - but how can you have a phone-app-simplicity-level *complex application*?<br /><br />I begin to think for complex tasks, you need detailed control and that means not-like-a-phone.<br /><br />But there are lots of non-complex tasks. They all fit on a like-a-phone OS.<br /><br />But of course Linux *is* a not-like-a-phone OS. But it has a like-a-phone layer on top, when it's on a phone.<br /><br />And that I think brings this full circle. MS could make a like-a-phone layer for Windows. Linux already has. Which wins on the desktop? answer I think depends on who starts first and who's incumbent. So MS are incumbent, but Linux seems to have a head start.<br /><br />I heard rumours Windows will be ported to ARM (the main phone CPU). I can see it making sense for Windows to try to get onto phones - if you can have the same like-a-phone layer on the desktop and the phone, great! but they don't *have* a like-a-phone layer yet. Linux does. But I can't yet see anyone trying to push Linux-like-a-phone onto desktops for non-computing users.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-16667276311093727172010-09-10T13:21:02.856+10:002010-09-10T13:21:02.856+10:00You are engaging in historical revisionism. Micro...You are engaging in historical revisionism. Microsoft did not get sued because they were a monopoly. They got sued because they were using their monopoly to engage in anticompetitive practices.<br /><br />For example, in order to bundle Windows vendors had to pay MS per box whether Windows was shipped on it or not. If you bought an Intel PC in that time frame you received a sealed envelope stating that if you did not accept the license agreement you could return it for a refund. Yet this was a practical matter impossible for the consumer, and only concerted and expensive legal proceedings produced results for consumers.<br /><br />This does not indicate bad judgment by govt antitrust lawyers. On the contrary it exposes some very bad judgment on the part of Microsoft. I'll use a familiar analogy. They were absolutely committed to collecting pennies in front of the steam roller and they got crushed. Whose fault is that?Chris of Stumptownnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-40668657475202636492010-09-10T12:29:49.594+10:002010-09-10T12:29:49.594+10:00Google might have tried to insert their browser as...Google might have tried to insert their browser as standard - but there were always competitor browsers and the competitor browsers always went to Alta Vista (remember them!)<br /><br />MSFT might have inserted lots of features as standard and relied on inertia to stop people changing them. But there would have been some people who changed them.<br /><br />Strangely the value in AOL is the number of people who STILL have AOL as their home page. Inertia provides a LOT of value... The government stopped MSFT using inertia as quite as strong a weapon - and that I think is it.<br /><br />The Walled Garden of the phone companies and AOL was a much bigger threat.John Hemptonhttps://www.blogger.com/profile/03766274392122783128noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-79123822539944941412010-09-10T11:59:59.542+10:002010-09-10T11:59:59.542+10:00I may be off base on this, but without the threat ...I may be off base on this, but without the threat of government intervention, wouldn't Microsoft have blocked the ability to do internet searches by any engine other than Microsoft's?<br /><br />It seems that Google is now winning with a superior product only because the government mandated competition.<br /><br />I really enjoy your posts, so if I am wrong please correct me. I won't be offended.Keith Hemstreethttps://www.blogger.com/profile/09454526234468345525noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-24658205452142725902010-09-10T08:47:17.749+10:002010-09-10T08:47:17.749+10:00I can tell you why Linux is not used much on the d...I can tell you why Linux is not used much on the desktop. It is a pain. I speak as someone writing this on Ubuntu 10.04 and Chrome - both of which are open source.<br /><br />I generate plenty of alpha with my small cap shorts. They have been off-the-scale good.<br /><br />My longs. Them more of a problem of late. Much more.<br /><br />JJohn Hemptonhttps://www.blogger.com/profile/03766274392122783128noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-74956983915351416752010-09-10T07:52:18.184+10:002010-09-10T07:52:18.184+10:00"At the moment I can barely see the justifica..."At the moment I can barely see the justification for investing in any company with a market cap below $100 billion."<br /><br />That's an interesting statement. According to a quick Yahoo stock screen, there are only 40 U.S. listed equities with market caps above 100 billion. That sounds to me like a very crowded trade with little hope of generating any excess return. You're basically just running with the pack.<br />Perhaps you'll generate Alpha with the small caps you choose to short.<br />FSLR comes to mind. ;-)Stevenoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-27167914678599063102010-09-10T01:42:16.194+10:002010-09-10T01:42:16.194+10:00Finally, I want to say that I think the ownership ...Finally, I want to say that I think the ownership of Microsoft stock is riskier than you think. The standard feeling is that Microsoft will still make money even if they never sell to consumers again because businesses won't be able to leave them. I would direct you to: http://www.schneier.com/blog/archives/2010/09/consumerization.html I think if the consumer electronics world keeps growing and developing the way it has been recently, then Corporate IT departments are going to have to adjust and accept that their employees are 100% connected and carry their primary computers with them in their pockets. When the man in the corner office wants to use his iPad, Droid etc to access the corporate network because "thats his primary computer and he always has it" then the IT department will have to adjust, and they will web enable their internal systems. <br /><br />I don't understand Microsofts strategic response to this VBA/VB6 hasn't been updated since 2000? and VBA.NET requires a complete application rewrite and scripting support is at this point rather primitive. So there is no forward path for developers. I'm not sure if this is just incompetence or a strategic plan. Perhaps they think that by leaving their platform static they can make it even harder to port key applications over. Maybe their concern is that if they were forced to update the language then they would have to add new technologies and ideas like AJAX support which would only facilitate the movement away. The problem is that at this point the languages are so old and crufty (just looking at VBA syntax makes me want to vomit), that the developers have left and everyone KNOWS that it has to be rewritten completely. When it is rewritten what platform do you think that IT managers will pick. Google Web Toolkit or VB.NET?Dhttps://www.blogger.com/profile/01860057445105230995noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-76714278241331832112010-09-10T01:42:07.830+10:002010-09-10T01:42:07.830+10:00If you want to critize the US DOJ I would say that...If you want to critize the US DOJ I would say that it was flawed as policy to attempt to apply antitrust acts written in the 1890s to prevent large industrial monopolies from abusing there power to the rapidly developing digital world. The EU has been more sensible about this and has done things that help competitors (without as much legal overhead) by requiring the documentation of document formats (like XLS and DOC). The DOJ could have accomplished a great deal by asking the US courts, the Pentagon, and all manner of other Government agencies to refuse to accept any Microsoft Office file formats, and to mandate the use of common interchange formats. If you can't communicate with the Government in a DOC format, then you have to start using other formats, and they HAVE to preserve your formatting and be better support. Microsoft wouldn't have been able to get away with the scary "Loss of formatting" messages, and poor importing of other file formats.Dhttps://www.blogger.com/profile/01860057445105230995noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-45533909142612959302010-09-10T01:41:56.075+10:002010-09-10T01:41:56.075+10:00[If I am duping comments sorry this is long and ha...[If I am duping comments sorry this is long and has to be broken up]<br />I thinks its way off base to say that the Justice department was wrong in bringing its case. The industry has changed dramatically in the last few years, and the case itself took so long to wind its way through the court system that by the time the judges were talking about an issue it was long since irrelevant (and the harmed competitors were already out of business).<br /><br />Its cliche but if you compare the timeframes of say the oil industry and its major developments to that of the computer industry you will see how inappropriate the anti-trust law is. Standard Oil was established in 1870, Microsoft in 1975. The peak of their powers were around 1904, and 1995 respectively. The first major competitor at the consumer level has yet to even appear for the oil industry. Google was founded in 1998, and didnt start creating applications like gmail and google docs until 2004-2006. So if 1870=1975 and 1904=1995 then bringing a case in 1998 would be comparable to going after Standard Oil in 1910, which is pretty much what happened, and if the Oil industry was anything like the software industry we would have expected feasible alternatives to oil appear by 1921. The fact that they didn't just shows how different these industries are, but someone living in the late 90s looking at historical examples like Standard Oil could easily have missed the significance of the internet, and thought that preventing microsoft from abusing its monopoly in the new arena was important. Its also possible that the effects of the suit have allowed the internet to grow. If Microsoft had made Internet Explorer standard and disallowed the user the ability to set other browsers as their defaults (which they certainly couldn't do under the watchful eyes of the DOJ) then Netscape/Firefox may have never taken off, and without Netscape pushing technologies like Javascript/DOM/xmlHttpRequest building applications like Gmail and Google Docs may have been totally impossible.Dhttps://www.blogger.com/profile/01860057445105230995noreply@blogger.com