A Bullish Take on Microsoft: An Analysis by Richard Williams and Jon Rettinger

The world of technology is constantly evolving, and it's not uncommon for investors to question the value of certain companies. Recently, I had the opportunity to sit down with Richard Williams, a Microsoft analyst at Cross Research, and Jon Rettinger, President of TechnoBuffalo, to discuss their take on the company. As someone who has been following Microsoft's stock performance over the years, I was surprised to hear that the analysts are still bullish on the company.

According to Williams, there are several reasons why Microsoft is a great investment opportunity. First and foremost, the company boasts strong cash flows, which have enabled it to maintain a solid three-quarter streak of beating expectations. This is a testament to Microsoft's ability to manage its finances effectively and make smart investments in its business. Additionally, Williams points out that Microsoft has been making significant progress in its mobile space, particularly with regards to Windows Phone 7. With the rise of Android, Microsoft has seen an opportunity to pick up market share that would otherwise go to Google.

One of the key factors that will drive Microsoft's success in the mobile space is the company's patent portfolio. Williams notes that Microsoft has a large collection of patents related to mobile operating systems, which will enable it to compete with Google and other companies in the industry. Furthermore, Microsoft has been making efforts to integrate its Skype service into Windows Phone 7, which could potentially lead to increased revenue for the company.

One of the things that struck me about this conversation was the emphasis on Steve Ballmer's strategic thinking. Williams notes that people often underestimate the former CEO's ability to navigate the challenges facing Microsoft during his tenure. While it's true that Ballmer faced significant criticism for his leadership style, he also made some savvy moves that have benefited the company in the long run.

Another interesting point that came up during our conversation was the role of Google in the search market. Williams notes that while Google is a dominant player in the search space, Microsoft has been making efforts to challenge its dominance through its Bing service. While Bing may not be as popular as Google's search engine, it's still a viable alternative that can provide valuable insights for users.

In terms of monetization strategies, Williams emphasizes the importance of creating value-added services for users. He notes that Facebook and Google have been successful in generating revenue by offering free services to users, who are then exposed to targeted advertising. Microsoft is following a similar approach with its Azure cloud computing service, which provides businesses with a platform to host their applications.

One of the most intriguing aspects of this conversation was the discussion around Microsoft's strategy for transitioning from its traditional PC business to a more cloud-based model. Williams notes that this transition has been a key driver of the company's growth in recent years, and that it's likely to continue to be a major focus area for Microsoft going forward.

As I concluded my conversation with Richard and Jon, I couldn't help but feel a sense of optimism about Microsoft's future prospects. While there are certainly challenges facing the company, its strong cash flows, talented team, and innovative products make it an attractive investment opportunity. Whether you're a seasoned investor or just starting out, Microsoft is definitely worth keeping an eye on in the coming years.

"WEBVTTKind: captionsLanguage: ena little more whale watching for you guys at hedge funds I'm favorite nine for boosting is staking like I'm shocked by watering sixty-three percent I know it has been proven a very smart guy but with Microsoft essentially been dead money for five years we're really asking what exactly does he see in this company well joining us now is Richard Williams Microsoft analyst at cross research and jon rettinger president of TechnoBuffalo rich i was reading your notes and it said you're very bullish on Microsoft there is so much to like where do I start well make a crack at it well the nice thing about Microsoft is that you've got very strong cash flows and a solid three-quarter streak of beating expectations but we look forward into the mobile space and because of what's happening with Google and Android we think it really adds a lot of value to the windows phone 7 franchise as we go into year-end so essentially they're going to try and pick up a lot of what Android is likely to lose because of these patent wars and it's steve ballmer smarter than people think and would you poo-poo what all the calls to get him replaced Richard what I think what we've seen over the last few years in retrospect really starts to paint a different picture than I think most investors are aware of it looked as if Microsoft was mired and unable to move but now when you look back and see how all the sudden Microsoft went from being under the Department of Justice and EU antitrust commissions to suddenly now Google is under that lens with some Microsoft help behind the scenes same thing with search I mean Microsoft is the only company i'm aware of that was able to take zero position in search for example that's a monopoly owned by Google and grow it to thirty percent okay John John I hear what Richard is saying and I definitely talking to Richard for years and I respect his position but at the same point listen you know what we can make the same case every year from Microsoft lots of cash number one leader in you know office program no more leader in Windows why hasn't the stock reacted for five years when it is fairly easy to at least on paper make a bull case for Microsoft so we're finally starting to see Microsoft used some of those capital reserves don't forget about that gigantic skype app in just a few months no matter what Microsoft does in the mobile space that's still a fringe business and richer was just on skype but yet as far as I know he didn't pay to be on skype right they paid eight billion for a free product but people what we're looking at in the integration electron oh I was looking at a potential integration with that Windows Phone 7 platform they have a new release code names deliciously mango coming out very soon but you're expecting to see skype integration brought into that so why you might not pay for the service the service is going to be in front of you there's a potential for ad space there an ad space for searchers are a tremendous potential revenue stream for Microsoft well you know Richard Richard I was one of those those early skype deal bashers and it was a knee-jerk reaction it didn't you know for whatever reason but as I'm driving the work I've got skype on my android phone I'm talking to my son in Hong Kong it's all free of course at this point I keep thinking to myself is there some way Microsoft can somehow do something with skype that would integrate it in a way google has integrated google maps to be so perfect that it actually works because by the way when i'm using the skype and i'm in the car and I'm it's not quite that great um well it is there something that people are missing you have the telecommunications for absolutely there is i would agree as well i think that the fact that facebook is free and they're generating multi billion revenue numbers and google searches free and they're producing tens of billions in revenues I think it's just a function of monetizing it and in the end I look at Microsoft Google as being searched it's a search war and it's effectively Microsoft's trying to transition from its OS with the incredible gross margins into new world and Google's trying to fight back with maintaining its it's great gross margin on the search side by going into China and India we think as part of this motorola deal okay retain John thank you very much for joining us thank youa little more whale watching for you guys at hedge funds I'm favorite nine for boosting is staking like I'm shocked by watering sixty-three percent I know it has been proven a very smart guy but with Microsoft essentially been dead money for five years we're really asking what exactly does he see in this company well joining us now is Richard Williams Microsoft analyst at cross research and jon rettinger president of TechnoBuffalo rich i was reading your notes and it said you're very bullish on Microsoft there is so much to like where do I start well make a crack at it well the nice thing about Microsoft is that you've got very strong cash flows and a solid three-quarter streak of beating expectations but we look forward into the mobile space and because of what's happening with Google and Android we think it really adds a lot of value to the windows phone 7 franchise as we go into year-end so essentially they're going to try and pick up a lot of what Android is likely to lose because of these patent wars and it's steve ballmer smarter than people think and would you poo-poo what all the calls to get him replaced Richard what I think what we've seen over the last few years in retrospect really starts to paint a different picture than I think most investors are aware of it looked as if Microsoft was mired and unable to move but now when you look back and see how all the sudden Microsoft went from being under the Department of Justice and EU antitrust commissions to suddenly now Google is under that lens with some Microsoft help behind the scenes same thing with search I mean Microsoft is the only company i'm aware of that was able to take zero position in search for example that's a monopoly owned by Google and grow it to thirty percent okay John John I hear what Richard is saying and I definitely talking to Richard for years and I respect his position but at the same point listen you know what we can make the same case every year from Microsoft lots of cash number one leader in you know office program no more leader in Windows why hasn't the stock reacted for five years when it is fairly easy to at least on paper make a bull case for Microsoft so we're finally starting to see Microsoft used some of those capital reserves don't forget about that gigantic skype app in just a few months no matter what Microsoft does in the mobile space that's still a fringe business and richer was just on skype but yet as far as I know he didn't pay to be on skype right they paid eight billion for a free product but people what we're looking at in the integration electron oh I was looking at a potential integration with that Windows Phone 7 platform they have a new release code names deliciously mango coming out very soon but you're expecting to see skype integration brought into that so why you might not pay for the service the service is going to be in front of you there's a potential for ad space there an ad space for searchers are a tremendous potential revenue stream for Microsoft well you know Richard Richard I was one of those those early skype deal bashers and it was a knee-jerk reaction it didn't you know for whatever reason but as I'm driving the work I've got skype on my android phone I'm talking to my son in Hong Kong it's all free of course at this point I keep thinking to myself is there some way Microsoft can somehow do something with skype that would integrate it in a way google has integrated google maps to be so perfect that it actually works because by the way when i'm using the skype and i'm in the car and I'm it's not quite that great um well it is there something that people are missing you have the telecommunications for absolutely there is i would agree as well i think that the fact that facebook is free and they're generating multi billion revenue numbers and google searches free and they're producing tens of billions in revenues I think it's just a function of monetizing it and in the end I look at Microsoft Google as being searched it's a search war and it's effectively Microsoft's trying to transition from its OS with the incredible gross margins into new world and Google's trying to fight back with maintaining its it's great gross margin on the search side by going into China and India we think as part of this motorola deal okay retain John thank you very much for joining us thank you\n"