Look Through A New Window

Somnath is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Touching M softly

Microsoft Corporation (NASDAQ: MSFT) is redesigning MSN.com for its upcoming touch-optimized Windows 8 platform. MSN will be the landing page for Internet Explorer 10 on Windows 8 devices. Microsoft is launching its own news operation as part of its new-look MSN website when Windows 8 launches later this month. Windows 8 is being tailored with touch devices in mind, so it should come as no surprise that its main news website, MSN, is getting a makeover too.

MSN will chiefly aggregate news from sources such as Reuters, a unit of Thomson Reuters Corp, the Associated Press and NBC, but it will also produce its own content. Landing pages can be a critical part of user experience. MSN.com is ranked number 17 globally by Alexa.

The site is being radically overhauled for Microsoft's touch-optimized Windows 8 system and Internet Explorer 10, which will be launched on October 26. The new look is designed to appeal to tablet and touchscreen PC users, who can manipulate large icons across the screen and tap on items they want to read. For the first time, the site will have a uniform look across all its sections, from news and sports to money and job listings. Microsoft's foray into news reflects the company's growing interest in creating its own content. Last month it hired a former CBS executive to run a new studio creating original entertainment for the Xbox gaming console.

Content will be displayed in full-screen, and work as an “app-like” experience because of the architecture between Windows 8 and IE10. Additionally, Microsoft explained that users who visit the redesigned site, when it launches on Oct. 26, will immediately know what content is most important because of the story tile size. It will also support features such as Snap and Flip Ahead.

The revamped page will be exclusive to people who use both Windows 8 and Internet Explorer 10, and it will be the default home page on the IE browser that ships with the new operating system on Oct. 26.

Lots Happening at Yahoo

Pushing a revamped, sleek news service to the front of its portal means Microsoft could eat away at people who use Yahoo! Inc. as a comprehensive portal. Yahoo’s turn-around story is still in progress, but redesigning the homepage has been identified as one of the key areas to work on. Yahoo’s portal is ranked number 4 globally by Alexa, but if it doesn’t keep pace, it can lose users.

Another story for Yahoo! is its decision to anoint a soon-to-be mom as its CEO was hailed as a breakthrough for women seeking to prove men aren't the only ones who can balance a high-powered executive lifestyle and early parenthood. The attention surrounding Marissa Mayer's pregnancy and the birth of her child intensifies the pressure as she tries to engineer a long-awaited turnaround at one of the Internet's best-known companies.

Although Yahoo's website remains one of the Internet's top destinations, the company's revenue has fallen in recent years. At the same time, it fell behind online search leader Google and online social networking leader Facebook in the race to build compelling services and sell more advertising. She plans to make her first extensive public remarks about her strategy in the company's third-quarter earnings call scheduled for Oct. 22. At about the same time Mayer returns to the office, she will start working with a new chief financial officer, Ken Goldman, whose hiring was announced last week. He is replacing Tim Morse, a cost-cutting specialist who apparently no longer fit in with Mayer's future plans for Yahoo!.

Although she has shared few specifics of her plans for Yahoo!, Mayer has indicated she intends to ramp up spending to attract talented employees and burnish Yahoo!'s products in an effort to keep Web surfers on the company's website for longer periods of time. Analysts also believe she may pursue acquisitions with a portion of the $4.3 billion after-tax windfall that Yahoo! is getting in exchange for selling half its stake in Chinese Internet Company Alibaba Group. The P/E of Yahoo! is 17.84 against 14.74 of Microsoft, while the EPS is $0.18 and debt/equity ratio is 1.04%.

Not Forgetting Google

Google Inc (NASDAQ: GOOG) also has a competing landing portal, ranked at number 2 by Alexa. Google is grabbing its digital broom and starting up another round of spring cleaning for the features, services, and apps its patrons no longer use with great frequency.

For those who turned to Google's News Badges as a means for validating their noses for news, Google is officially discontinuing the game-like icons that would previously indicate one's appreciation for a particular type of news — like a "Harry Potter" badge, if all you do is read articles about the boy wizard. Voracious readers could earn badges across five different enthusiasm tiers: Bronze, Silver, Gold, Platinum, and the not-quite-a-metal, "Ultimate" ranking. Google will no longer allow users to add customized backgrounds to Google.com via the company's "Classic Plus" feature. Starting in November 2012, the main Google page will revert to that-which-everyone-else-sees, instead of whatever customized image you've previously uploaded to use as a background.

Google is also officially killing Adsense for Feeds — a means by which content creators could allow Google to slap ads directly into their RSS feeds as a revenue-generating system. Google's starting the retirement process for the service on 2 October, with the goal of shutting it down entirely on 3 December.

With the cleaning spree, the company is on a growth path with revenue growth of 23.99% and earnings growth of 25.75%. The P/E of Google 22.58 against 14.74 of Microsoft and 17.84 of Yahoo, while the EPS is $8.42 and debt/equity ratio is 9.59%.

The Conclusion

A superior news offering could turn into a reason for people to use the MSN portal. A more popular portal could also translate into more use for Microsoft’s search engine, Bing, which hasn’t gotten a lot of love recently.  There’s lot to expect from Microsoft which is one of the 50 companies which has the highest dividend yield at 3.12%. With a P/E of 14.74 and a debt/equity ratio of 18% the investors are definite to feel the touch experience of Windows 8. The revenue growth of 6.89% and earnings growth of 5.33% makes the stocks even more bullish.

Interested in Additional Analysis?

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SomnathGuha has no positions in the stocks mentioned above. The Motley Fool owns shares of Google and Microsoft. Motley Fool newsletter services recommend Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.

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