Stupidity is contagious. It gets us all from time to time.
Even respectable companies can catch it. As I do
every week, let's take a look at five dumb financial
events this week that may make your head spin.
1. Shopping with Mr. Softy
Windows 7isn't the only thing new at
Microsoft (Nasdaq: MSFT). The company opened
its first Microsoft Store at an Arizona shopping mall
yesterday. It also began selling third-party Windows-based
computers on its website.
You're not
Apple (Nasdaq: AAPL), Microsoft. You will
never be Apple. Some will argue that you should never even
aspire to be Apple.
As a software company, you risk alienating the hardware
makers who may feel slighted by the placement of their
products in your online store. Even if the "7 days of Windows
7 savings" may make the online storefront little more than a
traveling trunk show -- gone in a week like the flu -- this
still doesn't heal the retailers and manufacturers that
aren't participating.
These same third parties may also question the logic of
the more permanent Microsoft Store in mallrat form. The
world's leading software giant is obviously going to showcase
its wares, Xbox 360s, and homegrown gadgets, but if
Microsoft's head gets too big, many of its partners will
begin dabbling in other operating systems.
2. No mas, Citigroup
Citigroup (NYSE: C) is running into a little
turbulence south of the border. It
may have to sell its 30% stakein Banamex, as the Mexican
government appears ready to flex the muscles of a law that
prohibits state-owned banks from operating in Mexico.
Taxpayers applauding the opportunity for Citi to sell an
asset that could raise as much as $20 billion may want to
hold their clapping until the end of the performance. Forced
sales aren't always on favorable terms. The sale would also
put even more pressure for Citi to turn its domestic
operations around if it's going to deliver the gains worthy
of its recent stock gains.
3. Yahoo! inside?
Yahoo! (Nasdaq: YHOO) delivered
better than expected resultsthis week, but there's a
quote from the conference call just dying to be let into this
week's column.
I hear it knocking, so I may as well let it in.
CFO Timothy Morse filled in at the last minute for a
flu-ridden Carol Bartz, but that's still no excuse for
comparing his company's decision to outsource its basic
search technology through Microsoft's Bing to the ability of
PC makers to differentiate their products using
Intel 's (Nasdaq: INTC) microprocessor.
"An Intel chip is used in Dells, HPs, and Macs to provide
the computation needed to operate them, but the
differentiation between these products isn't at the chip
level: It's in the different user experiences that are
provided on top of them," Morse explained. "It's the same for
us in search. We will innovate on top of the results that are
provided to us by Microsoft."
Outside of Macs, most PCs are pretty much the same, beyond
HP's disc-labeling features and its new line of touchscreen
systems. I'm guessing Yahoo! is saying that it can be the
Apple of search, and it can do it by standing on top of
Microsoft. Doesn't the analogy pretty much fall apart there?
If not, one has to wonder why Yahoo! is going with Microsoft,
a company that is barely the AMD of search.
4. Winning to lose
After six straight months of year-over-year declines,
the video game industry finally gained ground. Industry
watcher NPD Group estimates that gamers rang up
$1.28 billion in hardware and software sales last month,
marginally ahead of the $1.27 billion it delivered last
year. Continued... |