MSFT continues to invest, this time in Careerbuilder, Inc. and Nextel.
MSFT A-2-1-9
Price EPS FY99 (E) EPS FY00 (E) P/E CY99x 5 Yr Growth (E)
$80.69 $1.39 $1.49 58 20%
Release: [PRNewswire, 25 May]--WebTV Networks, Inc.,
a subsidiary of Microsoft Corp announced that president
and co-founder Steve Perlman is leaving the company at
the end of the month.
Merrill Lynch: Perlman is leaving WebTV and Bruce
Leak, one of the co founders of WebTV, will become
president and a member of Microsoft's executive staff.
Leak has the respect of senior management as a leader
and visionary. This management change should not
distract the company from continuing its investment in the
Internet and interactive programming. WebTV is a
strategic play for Microsoft and will not have an impact on
the bottom line in the foreseeable future.
Release: [Reuters, 24 May]--Building on its recent $18
million investment in newly public CareerBuilder Inc,
Microsoft Corp. will unveil plans to add a job search area
to the grab-bag of media properties on its Microsoft
Network (MSN).
Merrill Lynch: Microsoft's investment in CareerBuilder,
Inc. bolsters content on the MSN network of sites.
Monster.com is the 800-pound gorilla in this space, but
CareerBuilder is a respectable contender that adds good
content and should increase traffic to MSN. We expect no
short-term impact on the stock price.
Release: [Dow Jones, 25 May] A federal district court
issued several tentative rulings in Sun Microsystems Inc.'s
legal battle with Microsoft over Java.
Merrill Lynch: In a sidebar to its legal wrangling with
AOL/Netscape, a Federal District judge issued a tentative
ruling in a separate case on Sun's complaint against
Microsoft that several Microsoft products including
Windows 98 and IE 4.0 do infringe on Sun's Java
copyrights. This ruling strengthens Sun's claims that
Microsoft altered Java to favor Windows. The judge also
commented that Microsoft can develop its own version of
Java as long as it doesn't include Sun's proprietary Java
code thus obviating it from passing Sun's compatibility
testing. Both sides came away from the rulings claiming
victory, but until a final ruling is announced, both sides
will continue to argue their case.
Release: [Reuters, 28 May] Software giant Microsoft has
acquired a 4.25 percent stake in the wireless phone
company Nextel for $600 million.
Merrill Lynch: Microsoft's investment in Nextel is part of
the agreement between the two companies whereby
Microsoft's MSN portal and related will be distributed
over Nextel's wireless network. Microsoft's stake in
Nextel is a long term play and further evidence of their
commitment to the Internet and broadband/wireless. The
$600MM investment will have a negligible effect on
Microsoft's $22B war chest. |
