Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

The Microsoft Corporation (MSFT) Story in 10 Charts


Microsoft has also made a series of bold acquisitions in recent years including:

aQuantive: Microsoft purchased the search marketing firm for $6.3 billion in 2007. However, the company wrote off nearly the entire investment last year due to worse than expected performance.

Skype: Microsoft purchased the on-line telecommunication company to boost its enterprise collaboration business. However, with a $8.5 billion price tag, it’s still unclear if this acquisition will provide a return for investors.

Yammer: Microsoft bought the internet start-up for $1.2 billion last year to bring social network features to its suite of business applications.

Poor returns

Given Microsoft’s massive R&D spending, returns for shareholders have been disappointing as management has consistently missed the biggest trends in technology industry.

In contrast, rivals have achieved vastly better results. With relatively little investment, Apple Inc. (NASDAQ:AAPL) has managed to disrupt several industries including music and mobile while nearly inventing the tablet space. Google has posted remarkable returns for shareholders by dominating search and creating the most popular mobile operating system in the world.

Clearly the market agrees. Since 2006, Microsoft investors have earned an underwhelming 2.3% annualized return.

Value trap?

Microsoft is one of the cheaper names in the large-cap technology space and the stock is a regular favorite of value investors. The stock is trading at just over nine times forward earnings and cash represents over 20% of the company’s market capitalization.

Is it a good bet? The shift from PCs to tablets and smartphones is starting to erode the company’s lucrative cash cows. While the company is slowly expanding to new businesses, this shift doesn’t represent growth but only a transition.

The article The Microsoft Story in 10 Charts originally appeared on and is written by Robert Baillieul.