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MSFT Down As Market Falls

Stocks opened lower as unemployment claims were higher than anticipated in December. Shares of MSFT are more than tech or about 2%. Upcoming catalysts include holiday quarter earnings results announced after the close on Thursday, January 27; entrance and uptake in the tablet market (which is a ways off); Windows Phone 7 adoption; strides against current market leaders in cloud computing; and continued momentum of Kinect as well as other uses for the technology. The stock currently trades at 8x Enterprise Value / TTM Free Cash Flow, inexpensive compared to historical trading multiples.

10 Reasons Why Microsoft's Suit Against Apple's App Store Is A Waste Of Time (eWeek)

Microsoft is suing Apple over its use of “App Store,” claiming that the term is too generic to be worthy of a trademark. But is this really the best time to be distracted with that? Here are 10 reasons why it's a waste of time:

The terms aren’t important. It doesn’t change the facts. Microsoft should worry about smartphone adoption. Apple doesn’t care. The App Store will still be the “App Store.” It might help Google. There are other battles to fight. More distraction? It shows weakness. Litigious companies are taken to task.

Seriously, just call it something else and move on.

Goldman Raises Estimates On Kinect But Maintains Neutral Rating (StreetInsider)

Goldman Sachs analyst Sarah Friar is maintaining their Neutral rating on Microsoft but as a result of the strong Kinect sales, she is raising her FY 11-13 EPS estimates to $2.45, $2.68 and $2.96. The Windows 8 announcement is a much-needed step in the right direction in a tablet world. But the departure of Bob Muglia (following the departures of Ray Ozzie, Stephen Elop, and Robbie Bach in recent months), hints to the firm that Azure (cloud computing) traction may be less than expected.

Kinect Technology Coming To PCs And Televisions (InformationWeek)

Microsoft will eventually port its Kinect motion sensing technology for the Xbox to the Windows PC environment which could inject some new life into Microsoft's aging Windows franchise. Though it's still by far the dominant operating system for desktops and laptops, Windows is under threat from new form factors, such as smartphones, laptops and tablets. The circuitry behind Kinect is also making its way to the PC market through non-Microsoft channels. Prime Sense, the company that developed the motion-sensing chips, has licensed the technology to ASUS who has embedded the chips in its new WAVI Xtion media center, which adds PC and Web capabilities to flat-screen televisions.

Microsoft's Slow Tablet Strategy Is a Huge Gamble (IT World)

Analyst Michael Cherry of Directions on Microsoft thinks Microsoft dropped the ball on its tablet strategy on two fronts. First, by choosing to port a desktop OS to a tablet in the first place. What do you really gain anything by taking the entire client OS of today and porting it across? And secondly, previewing something at CES (Windows 8 on ARM chips) that won't be available for at least a year and a half. CES is like the car show of electronics. There was nothing to show. This isn't COMDEX. Read more of Michael's interview at Computerworld.

Hold Shares Of MSFT Until Mid-30s, Then Dump The Stock (iStockAnalyst)

Microsoft is currently undervalued versus its S&P 500 in general and its industry peers in particular. The company does have mostly positive potential catalysts on the horizon (corporate upgrade cycle, increased adoption of Windows 7, increased Xbox profitability). Even improved search market share and smartphone adoption are other possible positive catalysts as they are currently deeply discounted due to previous failures. Perennial undervaluation is definitely an obvious risk but right now the positives outweigh the negatives and the stock could reach the mid-30s by year-end. At which point, investors should cash out.

The Microsoft Brain Drain Continues As Head Of India Operation Flees To Google

(Business Journal)

Google has named Rajan Anandan vice president for India sales and operations. Anandan was formerly managing director at Microsoft, guiding its India operations. Before that Anandan was in charge of Dell's India business.