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Microsoft: Prelude to breakup?

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Microsoft

When I read the news about Microsoft's radical reorganization the first thing that came to mind was that this is a prelude to Microsoft either splitting the company into three separate corporations or perhaps selling off one or two pieces of the company. The new organization looks too much like three separate companies that are designed to all survive alone.

This possibility makes the stock an interesting speculation. Despite good news the stock has shown none of its fabulous growth and pep for which it was famous. Microsoft (MSFT: news, chart, profile) once upon a time could lure top executive and coders with promises of riches with stock options in lieu of high salaries as the stock would double every year or two. That's over.

Now the company looks dead in the water and many of the most talented Microsoft folks have quit and gone to work for livelier more aggressive companies. I run into these folks constantly and they all bemoan the fact that Microsoft is relatively moribund with the exception of the Xbox team that has attracted the best within the company.

Too many cash cows makes a lazy company. So it's no surprise that the two cash cows and the one potential cash cow were removed from each other in the reorganization and each given its own President.

If examined closely these three entities could easily be spun into new companies with their own CEO and stock.

Full Article.

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