Update to 2011 predictions
In January, one of my 2011 predictions was to see a major mobile OS vendor acquire one of North America's primary wireless carriers. In that prediction, I put a heavy emphasis on Google being that vendor... but now, after what we've seen these past couple weeks, I would love to see Microsoft dive headfirst into the carrier/operator world.
Microsoft has nearly $45bn cash on their balance sheet -- more than any other software company in the world. Shareholders have already expressed concern about these numbers, despite buybacks and dividends. The bottom line is that MSFT is way too cash heavy and only made two small acquisitions last year. They need to start spending.
A former [3-time] client of Corum's, Alan Gould, recently wrote a piece about Microsoft making a massive investment into the carrier world.
His logic is easily defined in these few sentences:
One check buys you 40 Million, 60 Million, 80 Million, 300 Million recurring revenue paying customers. You no longer compete with iPhone, Android or Blackberry…you support them.
The new war, the right war, the war that make sense for Microsoft will be in the acquisition of one or more wireless carriers. Microsoft simply buys themselves all the recurring revenue seats they want and can start off in the hundreds of millions.
Here's to hoping that the SEC, FTC and FCC will pass the deal.
Posted by DouganMilne, Vice President, Research on 02 March 2011
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