Microsoft (NASDAQ: MSFT) had, if you'll pardon the pun, a soft first quarter. The data just didn't do anything for me. The software giant, which competes with Apple (NASDAQ: AAPL), Yahoo! (NASDAQ: YHOO), Google (NASDAQ: GOOG) and IBM (NYSE: IBM), reported after the close of the regular session on Thursday. The stock was down slightly in the after-hours session, which seemed reasonable enough to me.

It's not as if some huge miss was reported. It's just that the growth rates weren't the stuff of shareholder dreams. Revenues increased 9% to about $15 billion. Earnings per diluted share came in at $0.48, and that was one penny better than what Wall Street was looking for. But it was only three pennies better than the previous year's Q1 results. So, it's not like things are shooting up like a rocket for Mr. Softy.

In addition, a look at the statement of cash flows shows a decline in net cash generated from operations. That figure decreased 43% to $3.4 billion. Plus, management is being cautious in its outlook and has issued Q2 guidance for earnings that was below what Wall Street was hoping for. Microsoft says it will probably do between $0.51 and $0.53 per share; Wall Street wanted $0.55 per share. Oh well, can't please everyone. Especially not in this time period.

Alas, I had to say good-bye to an old friend Nuance Communications (NASDAQ: NUAN). This is a technology company that specializes in speech-recognition software and digital-document solutions, and it competes with the likes of IBM (NYSE: IBM) and Microsoft (NASDAQ: MSFT). It's a cool business, although it grows by acquisition, so you do have to watch that part a bit (i.e., checking the GAAP vs. the non-GAAP numbers, cash flows, etc.). The 52-week high on the stock is $22.55; the 52-week low is $9.31. I remember thinking when the stock hit the high that maybe it was time to sell out. I wish I had. But I had confidence in its long-term future. I still do.

As we all know, though, everything has changed. The financial crisis is bringing everything down to irrational price levels. Shorting is one of the only ways to make money. And capital preservation is now on the top of everyone's agenda. That's what my sale of Nuance was about. It's one of the few stocks I owned that still showed a profit. I bought in well below $10 per share. I sold my shares on Friday for $10.13. I can always buy them back when things settle down. I should have sold a lot earlier during the downtrend; I could have generated more proceeds.

And that's one of the reasons why I'm writing this post. I want to tell you why I didn't try to raise some cash by selling Nuance at a better time period. I want to help you not be the idiot that I was. Okay, ready? Here goes. I didn't sell earlier because I held Nuance in a taxable account and didn't want to deal with paying the capital-gains taxes in '09. Like they say, if you get too cute about avoiding taxes, don't worry, you won't owe them because you'll have no profit. And that's a great way to get rich, of course (big sarcasm there, in case you didn't notice).

Oracle (NASDAQ: ORCL) reported earnings (pdf) on Thursday after the market closed. For the first quarter, the software company saw a top-line increase of 18%, with revenues coming in at $5.3 billion. On an adjusted basis, earnings per share grew 32% to $0.29 per share. Oracle beat expectations by 2 cents.

Moving to the statement of cash flows, I see nice growth there as well. Net cash from operations increased almost 20% to $3.2 billion. And the operating margin on an adjusted basis was nothing less than a delight as it went up by 350 basis points. That was a stellar increase, and the press release said that, at 40%, it was a record for the company. As far as I can tell, Oracle is doing a superb job of delivering some solid fundamentals for its shareholders. In fact, in the after-hours session on Thursday following this report, the company's stock traded up by nearly 7%. This morning, it is up 12% in pre-market trade.

I thought management did a great job in the quarter. But broken record that I am, I'll say that, if I had to buy in this sector, I'd probably first think of Microsoft (NASDAQ: MSFT), or maybe even IBM (NYSE: IBM). Consider that both Microsoft and Oracle have traded over the past 52 weeks in, relatively speaking, tight ranges. I'd rather get a quarterly dividend from a quality tech stock in this environment than just put my money down in anticipation of only a capital gain. It's just the way I'm thinking right now.

Disclosure: I don't own any company mentioned; positions can change at any time.

Adobe Systems (NASDAQ: ADBE) reported earnings for the third quarter after the market closed on Tuesday. The document and movie software company saw a modest rise in revenues of 4%, coming in at $887.3 million. Adjusted earnings per diluted share came in at $0.50. This represents a growth rate of 11%. According to this source, the bottom-line results beat estimates by $0.04. Not a bad position to be in during this market crisis. In fact, the after-hours traders yesterday saw fit to bestow a 3.5% rise in Adobe's stock price.

I can't say I'm 100% happy with the earnings report. I saw that the cash flow from operations dropped 50% during the quarter. And there wasn't necessarily anything in the report that screamed "you must buy me now!" But I also can't say that this makes me completely bearish on the long-term prospects of the stock.

For one thing, Adobe's shares, while not near the 52-week high, are not close to the 52-week low. And I have a special affinity for Adobe. I enjoy hobby film-making, and I have to say that the company does put out a remarkable suite of products that can help the average individual edit digital footage and add effects to it. Yep, you just might find yourself making the next Blair Witch Project with some of Adobe's products. Considering that YouTube is turning nearly everyone into a budding director, I think Adobe will be selling a lot of software during its corporate lifetime. Oh, and let's not forget about its document solutions (everyone is familiar with .pdf files, correct?).

Apple (NASDAQ: AAPL) is making a big deal out of the fact that 60 million software applications have already been downloaded by iPhone customers. New numbers show how modest the return is on the new business.

According to The Wall Street Journal, "If sales stay at the current pace, Apple stands to reap at least $360 million a year in new revenue from the App Store." The data show the extent to which Apple is still a hardware company. Apple's revenue run rate is now about $30 billion a year.

The software figures point to a misconception about Apple. Its iTune and Mac OS products only drive very modest revenue for the firm. It could be argued that these services help sell computers, phones and iPods, but their small returns show that Apple is still saddled with a lower margin business -- building products with fairly high component costs.

Apple likes to perpetuate a fiction for its shareholders that it will move into the ultra-high margin business of software and will get great leverage for its earnings. Looking at the numbers, there is very little truth to that.

Douglas A. McIntyre is an editor at 247wallst.com.

It feels great to watch stocks rise so much today. After all, the Dow fell 230 points yesterday. I don't have any idea why stocks are moving up and down so much. But it makes me think that the safest bet for short-term traders would be a bet on high volatility.

Meanwhile, I cannot explain why stocks are up 330 points today. Some think it is the $5 a barrel decline in the price of oil. Others think it may be an economic slow down in Europe coupled with its failure to raise interest rates. If Europe's slowdown is starting now and ours has been going on for a year, then perhaps the U.S. is a safer place to invest now because we're a year closer to recovery.

This could make some sense in explaining the strengthening of the dollar relative to the Euro and the Pound. But there is also the plunging of commodity prices more generally. As I posted earlier, this could have to do with a crackdown on speculators and the collapse of SemGroup, a big energy trader. As money goes out of commodities it seems to be heading towards software, housing, airline and even some financial stocks.

In a nutshell, if you believe that the commodity bubble is continuing to burst, it makes sense to invest in all the stocks that have been beaten down in the last year. That is, unless a hurricane shuts down drilling in the Gulf of Mexico.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

According to its earnings conference call, it looks like NetSuite Inc. (NYSE: N) isn't being harmed by the slow economic environment. Then again, the company provides a cost-effective enterprise resource planning (ERP) solution. Plus, the competition -- including SAP (NYSE: SAP) and Microsoft Corp. (Nasdaq: MSFT) -- has been lackluster.

In Q2, NetSuite's revenues surged 43% to $36.6 million, a 7% sequential increase. In fact, NetSuite added more than 400 customers in the quarter. Although there was a net loss of $3.1 million, or $0.05 per share, SAP has made recent moves to increase its pricing.

Essentially, NetSuite focuses on the mid-market customer. Keep in mind that there are more than five million of them in the U.S. And, for the most part, the market is fragmented and unpenetrated.

Several years ago, Oracle's (NASDAQ: ORCL) CEO, Larry Ellison, was clear about his vision: the enterprise software market was in desperate need of consolidation.

It was actually controversial. But, in the end, it was prescient.

Basically, he has struck a variety of small and large M&A deals -- making Oracle a tough competitor for rival SAP (NYSE: SAP).

True, Ellison will say that consolidation is good for customers; that is, it allows for more efficiency (hey, it's easier to deal with a single vendor, right)?

Although, Ellison can be crafty. No doubt, he has a big-time agenda: lowering competitive forces. For example, last month Oracle raised prices on its software offerings.

Something else: SAP has raised prices on its maintenance contracts (this is according to a recent piece in the Wall Street Journal, which is a paid publication).

All in all, such things are smart. In other words, what choice do customers really have? If you have made huge investments in a platform, it's extremely tough to make a switch (especially for mission-critical software).

However, for investors, this is something to note. The price increases should be highly profitable -- because of the high margins.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Anybody who does much in the way of graphics or design knows Corel Corp. (NASDAQ: CREL) and its products -- Corel DRAW and Corel Paint Shop. No question they are good products. But that does not mask the fact that 2Q 2008 numbers do paint paint a pretty picture. Interim CEO Kris Hagerman states that "Corel performed well in the second quarter." Given that revenues were up less than 3% and GAAP net income, another word for earnings, dropped 60% to $930,000, what would qualify in Hagerman's book as a bad quarter? It isn't necessarily how much a company makes that is most important, it is how much of that amount it gets to keep.

EBITDA is heading south and Hagerman admits the company needs to pursue "opportunities in faster growing markets." The company issued 3Q 2008 guidance of GAAP earnings per share of zero to $0.06, in line with 2Q results. Time for senior management to paint a prettier picture.

Shares closed Thursday at $10.75. The stock is up about 4% year to date.

See also: What's going on with the Corel buyout?

Spurred by a near epidemic occurrence of brain-degenerating conditions as we age, people of all ages and backgrounds are stepping up their personal efforts to improve and maintain their brain health. According to a story in USA Today, sales of brain fitness software reached nearly $230 million in 2007. USA Today stated, "SharpBrains, (a market research firm) estimates the brain fitness software market will reach $2 billion in 2015 in the United States."

Prudent investment strategy might include a speculative foray into this popular and growing field. In light of this, you may wish to pay heed to blogger Steven Mallas, and read his take on Activision (NASDAQ: ATVI).

First on the list for brain maintenance is physical activity, which probably accounts for the outstanding sales of Nintendo's Wii Fit. from Nintendo Ltd. (OTC: NTDOY). Active lives promote healthy blood circulation, which helps to feed steady amounts of oxygen to the hungry brain. Good hard work, cardiovascular exercise and even regular sexual activity can all help to keep your heart pumping adequate levels of oxygen into your brain.

Speaking to friends, the $1 trillion question that keeps arising is "when do we start buying?" Astute investors, they've certainly lightened up on their exposure to stocks over the past few months and have cash sitting on the sidelines. "Are we making a bottom here?" they ask, readying themselves to start moving back into the stock market. As asset allocation and modern portfolio theory tells us, stay in the market, be diversified, and don't trade on emotion. The problem is that investors doing that since 2000 would have seen little investment returns in exchange for taking on stock market risk.

So, with this info in hand, more aggressive investors are looking to spot a bottom and make a buck along the way. So, it's interesting to read weekly Barron's article out over the weekend entitled For the Bold Investor, This Could Be the Time to Buy Tech Stocks. The article, written by one of this author's favorite journalists, Eric Savitz, looks at Oracle's (NASDAQ: ORCL) recent performance as indicative for what's happening to tech. Citing Oracle's Chief Financial Officer Safra Catz, Savitz explains that deals were getting harder to close with some business slipping into the May quarter. Tough times for tech.

So why does Barron's think we should start buying now?

With the pervasive use of computers in our lives, the line between what's mine and yours sometimes gets blurred. I read an interesting post on TechDirt today that describes a patent that Big Blue, International Business Machines Corp. (NYSE: IBM) was awarded. The article, entitled "IBM Patents Real-Time Auto Insurance Surcharges," describes the patent as "Location-Based Vehicle Risk Assessment System, which describes how surcharges will be added to your auto insurance premium when a GPS device reports that you drove into an area in IBM's bad neighborhood database."

While this certainly sounds invasive, it's part of a larger trend in the insurance industry that actually benefits us consumers. In fact, I've written before about Pointer Telocation Limited (Nasdaq: PNTR), a small Israeli firm that markets technology similar to that of Lo-Jack's. In my interview with the Pointer Chairman, Yossi Ben Shalom told investors about a project underway in the U.S. called "Pay as You Go," in which insurance companies are testing programs with technology providers like Pointer that would revolutionize the auto insurance industry.

According to Ben Shalom, "Some people in the industry are talking about a discount or incentive program to build insurance policies on a multitude of parameters. Instead of just selling a policy based on the collective risk profile of the insured, "Pay as You Go" would calibrate premiums on a month-to-month basis based on specific data on how and who drove the car. Imagine a policy that didn't charge a family with a 16-year old driver when he didn't drive the car that month. Which roads the insured drove on, who drove the car, when the car was driven – all this data can be supplied via Pointer equipment to an insurance firm. There are some small pilot tests going on currently which we are involved in. Right now, we're talking about a very small percentage of the overall market but this could be a big driver for Pointer in the future because you need our technology for this."

Looks like IBM wants to get in on a project that could ultimately lower our auto insurance premiums. Clearly, no one wants their insurance company or anyone spying on them but with the right incentives and consumer protections, this new technology and new program could be great, no?

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

Shares of Oracle Corp. (NASDAQ: ORCL) fell in after-hours trading after the software maker reported inline earnings, indicating a slowdown in technology spending by businesses.

Net income rose 30% to $1.3 billion, or 30 cents per share, on revenue of $5.3 billion, according to the earnings press release. Analysts were expecting profit of 30 cents on revenue of $5.42 billion, according to Thomson Financial.

Until now, Wall Street was in love with the stock, sending the shares up about 13% this year at a time when many big-cap tech stocks have done poorly. This is the type of company that has conditioned investors to expect continued outperformance.

In fact, Bloomberg News went so far as to note: "Oracle Chief Executive Officer Larry Ellison, who led the software maker on a $33.5 billion spending spree, did more than add 39 businesses and 20,000 customers. He bought armor against a U.S. economic slump."

Guess that armor has some kinks in it now.

Tonight's conference call should be lively. The stock will fall even further if the company's guidance isn't extraordinarily optimistic.

Shares of Adobe Systems Inc. (NASDAQ: ADBE) have been soaring after the company reported yesterday after the market closed that its first-quarter profit jumped 52%, helped by strong demand for its design tools. The software maker also issued a stronger-than-expected sales and earnings outlook, despite fears of an economic slowdown.

For the quarter, Adobe Systems reported that its profit climbed to $219.4 million, or 38 cents a share, boosted by strong sales from its software tools like Photoshop, Illustrator, Dreamweaver and Acrobat. Excluding special items, the company's earnings came in at 48 cents a share, topping analysts' estimations for quarterly earnings of 45 cents a share.

Adobe Systems also announced a respectable 37% growth in revenues, to $890.4 million, up from $649.4 million a year earlier. Revenue during the period was helped by a 57% increase in its Creative Suite 3 solutions sales which rose up to $543.5 million in the quarter. Analysts, on average, were expecting the company show $876 million in revenue, according to Thomson Financial.

Google (NASDAQ: GOOG) Apps is a set of server-based word processing, spreadsheet, and presentation software created to go after a number of the features of Microsoft (NASDAQ: MSFT) Windows. While Windows uses the memory of the PC, Google's product runs over the internet on Google's servers.

Microsoft is getting sick of having sand kicked in its face. The big software company said that it would increase "the availability of its online services for e-mail and collaboration software," according to Reuters. The software had been available to smaller businesses but now it can be used by companies of any size.

Google claims that it has signed up 500,000 businesses to use Google Apps. That has to be a real headache for Microsoft.

Now, Redmond is forced to walk a fine line. If it offers too many services over the internet at too low a price, it could cut into its profitable Vista franchise. Most of Microsoft's margins are based on Windows, its server software, and Office. If the margins on those fall, the company's stock price is likely to take a large hit.

The news is another example of how Google is bedeviling the world's largest software company and hitting it where it hurts most, in its large profit centers.

Microsoft's problem may be that it cannot do anything about the problem other than match Google's products and probably drop what it charges. It is an unhappy option.

Douglas A. McIntyre is an editor at 247wallst.com.