Thursday, July 7, 2011

Stock tip: Why Microsoft is hot again (MSFT) -- Facebook, Skype, Bing

Google's been drawing battle lines against Facebook, and in response Facebook allied itself with Google's main nemesis: Microsoft.

Facebook's relationship with the Microsoft's Bing team and now video chat through Skype is an effective partnership that makes sense. Video chat has been Skype's bread and butter and tying it up with a social network of 750 million people automatically lifts Skype from a dying platform to a de facto monopoly, with Microsoft benefiting the most out of this partnership.

The ability to monetize this is still "cloudy", but what it does mean is additional users and access to a platform (Facebook's social network) that Microsoft was never really good at. Plus the fact that Microsoft is still a cash cow in its legacy line up (Office, Windows), this makes Microsoft's stock extremely attractive long term.

I'm buying more Microsoft today!