Is Microsoft a Good Buy Going into 2012?

Microsoft

I really don’t think so…  Investing in Microsoft seems like suicide.  I’d rather have my money in a piggy bank.

I’ve owned Microsoft stock and watched it do virtually nothing.  It’s not fun.  For some reason I had this belief that they are going to make a come back.  I highly doubt it now.

To me, Microsoft is running on an old business model and an investment in them seems very risky.  They put windows on every PC and they sell a bunch of software to companies.  Years ago, it worked amazingly well and that’s why it is still such a giant.  I honestly think that Micosoft’s best days are long behind them and they will just be in some kind of unforgettable “tech hall of fame”. They are the tech boys of yesterday who have still yet to retire.

I haven’t seen Microsoft do anything new in a long time.  Their attempt to get into search with Bing has been a major failure.  I think it’s failed far worse than most numbers would have you believe.

I own and operate several websites and I can see where my traffic is coming from.  If I total up all the websites I own, I have over a quarter million monthly visitors.  That’s a fairly big sample size and my websites are across many sectors.  The traffic from Bing is even less than 1% of the traffic from Google.

Google is crushing Microsoft in pretty much any space it enters.  Look at Chrome and Explorer.  The only people who still use explorer are the people who don’t care enough to switch browsers or even know it’s an option.  Google is starting to make cheaper and better software and offer it to companies.  That will kill Microsoft.

There have been several rumors of Google coming out with an operating system for PC’s.  It won’t be much of a stretch considering they make Chrome, and own Android and Honeycomb.  I think it’s just a matter of time and people will switch quickly.  Google will make a better and cheaper version of Windows in due time.  They will make it similar enough so that people are comfortable making the switch, and make it better in the ways that are obvious.  The same thing will happen as did in the browser wars.  If Google’s operating system uses Google stuff as the default, then Microsoft is going to really be in trouble.  I can’t imagine many people changing the default settings to get back to Bing and Explorer.

Microsoft bought Skype and I thought that might have been a good move.  I was excited to see what they were going to do with it.  Turns out not much.  Skype was losing money when Microsoft bought it for 8.5 billion and I’m sure it still is.  Their social media efforts have been a joke and even their popular MSN instant messaging service are losing steam to Facebook’s IM.

With all the smart, young, and talented CEO’s out there in the tech space, I really see bad things ahead for Microsoft.  What’s the upside to this company?  How could they possibly have a blow out quarter?  It’s easy to see how there is always the looming possibility of bad news for Microsoft from innovations from Google, Facebook, Amazon, Apple, and whoever else.  I just don’t see much of an upside to justify the risk.  I’m thinking that a best case scenario for the stock would be a slow increase of a few cents per share here and there.  The worst case is pretty disastrous and could see the stock trading at half it’s current value.  Unfortunately I see the latter to be a lot more likely.  The company has had plenty of time over the years to prove themselves but they seem like slow old veterans who’ve simply lost a step or two in today’s fast paced game.

If I’m right about this and Microsoft gets destroyed, a lot of this money that was in the stock will transfer over to companies like Google.  That’s why I’m very long Google over the next couple of years.

7 Responses to Is Microsoft a Good Buy Going into 2012?

  1. Loic says:

    Hi Andrew,
    I request more articles from you haha!
    maybe about appl?

  2. Erikc Jesus Arzola Renteria says:

    I think that microsoft has been lefted at the back of market, ’cause with some companys like Apple.inc , Google , etc… they don’t have the competion level to be at the day with the technology or people qualified with so much experience.
    also, they take so many risk with the actions and investments, so its better to save your money and try to invest with a “new” company that take better desition with money !

  3. lynneth gabriela flores almada says:

    microsoft has a lack of competition lever, in aother words it had less quality than other companies, since it doesnt have the same level :/

  4. jonathan israel patiño barraza says:

    i think that what it tells is truth, cause microsoft isnt giving new stuff, it’s kind of reckless invest there. i wouldt invest in microsoft, but who knows, windows 8 seems that will be awesome, so maybe that will make microsoft go up in sales or that stuff, you know

  5. Omar Portillo says:

    I think microsft could be more interesting if the company they create something new stuff or that kind of…

  6. diego soto chavez says:

    i think microsft is the more interesting company and is the more important because a lot people use always all time and i think it helps a lot of people every day because you have a lot of information very easy and fast.

  7. jesus salazar says:

    its time to say bye to Microsoft and let other system come to make new graphics, apps. Microsoft don’t know what to do with the money and they are only buying things they think going to function.

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