Feeds

Microsoft poised to spin-off MSN?

As hugely unprofitable Web operations are worth a fortune, it would be (more) money for free

  • alert
  • submit to reddit

High performance access to file storage

Microsoft may announce the creation of a "tracking stock" for its Microsoft Network operations next week, according to US reports. The notion first surfaced in May, and the likelihood of such a move was reinforced by CFO Greg Maffei last month, who said the company would separate out some of the figures for its Internet businesses. Microsoft will report its year-end figures on Monday, and later in the week will hold its annual analysts meeting. Either of these could see the creation of the tracking stock. The difficulty for Microsoft, believe it or not, is that by having its Internet properties operating as part of the Microsoft corporate structure the company is missing a trick. Bill Gates lamented recently that Internet stocks were in a better position to fund acquisitions out of stock. Internet stocks can trade at 50 times revenue, while Microsoft trades at less than half that. See how tough it is being rich? By moving towards operating MSN as a separate company, Microsoft would fix that problem, and a couple of others. A separate company will be useful if the DoJ case goes badly for Microsoft, and the remedies include a break-up. MSN will also be in a better position to recruit staff, as the stock options would likely be better. Microsoft has historically been able to attract staff via good stock performance, but earlier this year company president Steve Ballmer told staff of a restructuring of compensation which recognised that options wouldn't be so valuable in the future. In normal financial terms, MSN oughtn't to be a wildly attractive stock. Microsoft's chequebook has made it a major Internet property, but it could be losing around $500 million on a turnover of $800 million to $1 billion. But in Web terms, seas of red ink tend to attract investors rather than the reverse. And Bill no doubt wants some of that. ®

High performance access to file storage

More from The Register

next story
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Nokia offers 'voluntary retirement' to 6,000+ Indian employees
India's 'predictability and stability' cited as mobe-maker's tax payment deadline nears
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
It may be ILLEGAL to run Heartbleed health checks – IT lawyer
Do the right thing, earn up to 10 years in clink
France bans managers from contacting workers outside business hours
«Email? Mais non ... il est plus tard que six heures du soir!»
Adrian Mole author Sue Townsend dies at 68
RIP Blighty's best-selling author of the 1980s
prev story

Whitepapers

Mainstay ROI - Does application security pay?
In this whitepaper learn how you and your enterprise might benefit from better software security.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.