Why bother? For starters, it forced Microsoft Corporation (NASDAQ:MSFT) to notably improve its Online Office game to keep pace with a new and well-funded entrant. That increases the costs of doing business. Second, it eats away, even if only slightly, at Microsoft’s industry position, which hits the top line. The end result is a weaker Microsoft, which is a win for Google Inc (NASDAQ:GOOG) even if it doesn’t make much money from its productivity offerings.
Why is this good? Because Microsoft Corporation (NASDAQ:MSFT) has for years been working in the search space most recently with Bing. While Microsoft clearly wants to make money with Bing, on some level, it is also just trying to limit Google Inc (NASDAQ:GOOG)’s reach. So middling performance is acceptable. While such logic gets complicated, or perhaps fuzzy, this is the type of strategic thinking that goes on throughout the business world.
And, believe it or not, it’s what makes Google Inc (NASDAQ:GOOG) and Microsoft Corporation (NASDAQ:MSFT) such great companies, though Google Inc (NASDAQ:GOOG) is a bit expensive at current levels.
The Tribune Sale
The Tribune only recently found its way out of bankruptcy. It owns newspapers, radio stations, over 20 television stations, and web assets related to each. It would make complete sense for the company to move out of the weakest performing business, newspapers, to focus on its television and radio businesses.
However, why make that announcement now? Is there a sudden rush to exit the newspaper space or is this an attempt to depress the value of newspaper assets to hinder a competitor? That’s devious thinking, but the business world is a rough place.
The New York Times Company (NYSE:NYT) needs money to fund its efforts to turn its flagship brand around, the less it gets from the sale of The Globe, the worse off it will be. The move by Tribune isn’t a good sign for The Times and suggests that investors should continue to shun the newspaper space.
The article Everybody Out Of The Newspaper Pool! originally appeared on Fool.com and is written by Reuben Gregg Brewer.
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