Apple, Inc. (NASDAQ: AAPL) has really never been down for the count as a company, although it's been on hiatus a couple of times in its 30 plus year history. Never before has the company seen such product and financial success, though, than in the 2001-current period. Under current CEO and co-founder Steve Jobs, the company is a force in the entertainment business along with ramping up its fortunes in the PC business where it started. We won't even mention the hardware business (iPod, iPhone).

But the one elusive crown that Jobs would probably love to see shift to his company is the operating system used by PC customers. Now that current Macintosh computers can run Microsoft Corp.'s (NASDAQ: MSFT) Windows Vista (or XP) operating system, is Jobs slyly trying to wrestle the operating system of choice crown from his longtime competitor? After all, a Macintosh customer can switch between a full Mac OS (operating system) on his or her PC and Microsoft's Windows with a keyboard press. Use one OS for work-related things and another for -- everything else. Guess which is which? And don't think that's just what Jobs envisions when he's made every single Mac computer being sold capable of running Microsoft's Windows. Perhaps he's trying to win a long war with Microsoft on the basis of Apple's cooler-than-cool hardware rather than software?

Blogging is content that gets niche (and profitable) audiences to the doorstep of business's sites. It's no surprise that large companies have blogging staffs to communicate with customers these days. It's also great to see unfiltered voices step beyond the chokehold of marketing and PR departments to give a true voice to companies. Trust me, customers can tell the difference between a self-serving blog and a genuine one.

Software giant Microsoft Corporation (NASDAQ: MSFT) just lost its main blogger who covered its flagship software product -- Windows Vista. Nick White said this week that "I want to share with you the bittersweet news that I am moving on to a role outside Microsoft" in order to join blog-centric company BuzzCorps. White will be replaced by Windows communications director Christopher Flores. Note to Flores: be honest with your audience and don't become a simple mouthpiece for Windows Vista, Share in the joys and disappointments both. Become a Microsoft outsider.

Does this mean that Microsoft still doesn't understand how to retain someone in a Web 2.0 role? Hardly, but the company is, by all measures, late to the game in a changing web world -- on multiple fronts. It's even poised to spend the largest amount ever for an acquisition if buying Yahoo! Inc. (NASDAQ: YHOO) ever comes to pass. Until then, its needs a central "all things Vista" representative -- something that can't be an easy task to accomplish.

Was the hiring of New Zealander Chris Liddell a strange choice for Microsoft Corp.'s (NASDAQ: MSFT) CFO post back in 2005? By all accounts, it was. Liddell's background in the paper industry seemed odd as a preparation for leading the finances of the world's largest software company. But, Liddell has proven quite the dealmaker since taking over his post from former CFO John Connors.

He's engineered more than 50 deals since acquiring his post and he's managed to loosen the purse strings from a notoriously stingy company. Microsoft, after all, had over $30 billion in cash at one time and just didn't seem to ever spend it. It even tried to start buying back up to $30 billion in its own shares back in 2004 -- but too many shareholders wanted to hold onto their Microsoft holdings. But, was it Liddell's idea to use about all of Microsoft's cash hoard in offering a money/share split for the recent $44 billion bid for Yahoo!?

The company just this weekend Yahoo! Inc. (NASDAQ: YHOO) told Microsoft that its bid was just too low. For a company with consistently lowered profits in the last fiscal year, Yahoo! sure has a big head on its shoulders. Should Liddell's idea to have the software giant actually -- gasp -- issue debt be a wise move if its play for Yahoo! moves forward? At the rate Microsoft generates free cash flow, it's not a bad idea.

Say what you will about Old Softie, but the company commands hefty, growing sales every quarter. Liddell's quiet aggressiveness in using acquisitions to drive growth instead of waiting for organic growth is commendable, and it's required. Competitor Google, Inc. (NASDAQ: GOOG) won't slow down, and Microsoft needs a financially savvy CFO like Liddell to get the company into quick-react mode against all the web-based competition that has now arrived.

[The author holds a long position in MSFT]

Is Microsoft Corp. (NASDAQ: MSFT) becoming desperate when it wants to study consumer brain patterns to find out why its competitors are so successful? Microsoft Research wants to expand its presence in 'brain-computer interfaces' for its coming push into natural computer interfaces that will someday replace keyboards and mice. Of course, Ole' Softie has been talking about speech recognition for what seems like an eternity. So far, it has barely taken off in the consumer marketplace from what I have seen. Does anyone you now interact with their PC using mostly voice commands?

Microsoft competitor Apple, Inc. (NASDAQ: AAPL) made the computer mouse popular nearly three decades ago to really jump-start user interaction with PCs, and added 'multi-touch' to 2007's iPhone to again invent another way of computer interaction. What else is coming down the road? Whatever it is, Microsoft wants to be there first this time. The world's largest software maker seems to be honing in on reading a customer's mind to enable PC interaction. Science fiction? So far, yes -- but possibly not for long.

Google Inc. (NASDAQ: GOOG), whose internet search engine finds results to customer queries in what seems like perfect fashion, isn't staying back from this field either. Although Google is keeping mum on its ambitions to connect the human mind with a computer system or interface, it continues honing its artificial intelligence systems that power those instant search results millions of times an hour around the world. Google, though, is famous for keeping things under wraps until a release date is imminent. I guess we'll have to wait and see which is first, if any.

[The author holds a long position in MSFT]

Microsoft (NASDAQ: MSFT) will be rolling out new tools and services soon to encourage more internet advertisers and producers to create better online ad campaigns, the software giant said this week. Naturally, the new tools will work with Microsoft's adCenter and Live Search environments. With competitor Google (NASDAQ: GOOG) collecting the lion's share of online advertising revenue, will these newer tools make a dent in that empire?

Perhaps a little. Nothing new here -- Google and Yahoo (NASDAQ: YHOO) tools are designed to work with their own search engines and related properties as part of an advertising customer recruitment and retention strategy. But, from looking at these tools, I'd hardly call them revolutionary.

One of the newer tools, which is being described as an "adCenter Add-in for Excel 2007," allows search ad customers to research the effectiveness of ad keywords by reach and targeting efficacy. If this just imports adCenter data into Excel, then this is a non-product. If the product imports adCenter data into Excel and performs a huge massaging of data to give specific suggestions to the Excel-using adCenter customer, then this is a good thing.

But it will take more than that for Microsoft to burst through the 10.3% market share stat it gleaned in September, compared to 57% for Google.

[Disclosure: I own MSFT shares as of 12-4-07]

"I think we're in for a stellar year for Microsoft (NASDAQ: MSFT)," says Wayne Mulligan in The Tycoon Report. Here, he explains why it's time to "back up the truck."

"Microsoft is a company that holds the top spot in almost every single market it plays in, has had a track record going back over two decades for stellar business and financial performance, and yet its stock has languished for the last five years.

"Microsoft Windows and Office have a 90% market share in their respective markets. The company is on track to do over $50 billion in sales this year. MSFT maintains a 30% profit margin (approximately) and a 40% return on equity.

"With Windows on 90% of the world's computers, it's fairly easy for Microsoft to push new products out the door at very little cost . . . that's huge, and is what contributes to its healthy revenues and bottom lines.

Microsoft (NASDAQ: MSFT) will begin selling newer versions of its Zune digital media player as of today at national retailers like Best Buy (NYSE: BBY) and Wal-Mart (NYSE: WMT). The world's largest software company will, again, try to compete head-to-head with Apple (NASDAQ: AAPL)'s iPods, current the planet's most popular line of digital media players.

In addition to replacing the original Zune player with a newer, sleeker unit, Microsoft's releasing the slimmer Zune player in 4GB and 8GB capacities to compete more directly with Apple's most popular iPod product, the iPod nano. After five years, is the world tiring of the iPod and seeking another, equally capable device with more features and an online media store to boot? Many would answer "yes" to that question, and that's the market Microsoft wants to recruit to this new line of Zune devices.

Windows Live services and applications were honorably discharged from "beta" status this week as Microsoft Corp. (NASDAQ: MSFT) gave the entire world full access to www.live.com, along with releasing email addresses at the live.com domain name. Get yours today!

In addition to officially launching Windows Live, the world's largest software maker is preparing an online advertising blitz that will reach "billions" over the next few months, according to the company. In terms of actual impressions to customers, the company expects about 10 billion of them through the end of the year (roughly). That's quite a push, yes?

Windows Live is Microsoft's attempt to offer a complete suite of online tools from email to maps to social networking to instant messaging -- and all available from a single "dashboard" where all products are cross-promoted and fully integrated. Google (NASDAQ: GOOG) has been doing this too in the last year, part of its iGoogle initiative.

This is being seen as Microsoft's largest effort yet to recruit and keep eyeballs to its cross-linked array of consumer web offerings so it can glean more advertising revenues from those eyeballs a la Google AdWords. The software maker is well behind its rival, in seeing revenue from advertising, but it is making progress here. Time will tell if it is enough progress.

DISCLOSURE: I own MSFT shares as of 11-8-07.

Microsoft (NASDAQ: MSFT) announced this week that it sacked its chief information officer, Stuart Scott, over violations of the company's policies. Although it's unclear to the media exactly what policies were violated, Scott's abrupt departure suggests an infringement of pretty large proportions.

Although a Microsoft representative referenced a "violation of company policies" along with an internal investigation, the world's largest software maker announced that Scott had been terminated as as last Friday. Now, this is no middle manager -- Scott was responsible for the entire global information technology infrastructure for the world's largest software maker. Call it a high-profile executive departure, even though Scott was not a large name in executive circles.

After 17 years at General Electric (NYSE: GE), Scott came to Microsoft in 2005, so he had really not been there that long. The question now is to find out if Scott really did something that warranted his dismissal, or if the direction he wanted to take the company's global infrastructure was at odds with company policy, whatever that may be.

After almost two decades at General Electric, it's hard to think that such a seasoned executive would violate any policy in such a short time with Microsoft. Is there a piece of the story that is not being told here? We're sure to find out if dirt starts flying soon in the blogosphere.

Microsoft Corp. (NASDAQ: MSFT) has seen some strong stock price gains recently, closing yesterday up over $36. The world's largest software company saw another outstanding quarter last week, and similar to Google, Inc. (NASDAQ: GOOG), the company just keeps on bypassing naysayers and reporting excellent quarters one after another. If the PC is dead and the operating system is becoming extinct, apparently nobody is telling Redmond.

On the back of great quarterly results, Microsoft's shares have shot up to a six-year high, and it was the largest gainer on Halloween day among the Dow industrials. The $36.67 price from yesterday's trading day was the highest since June 2001, with nearly 100 million shares traded. For a 30-year-old software company seen as un-innovative and boring (well, when compared to Google), Halloween day was a recent milestone in Microsoft's history.

Even last Thursday, almost 290 million shares were traded after Microsoft's Q3 results came back so strong. A Sanford Bernstein analyst said that he expected the company "to continue to exceed expectations" for a while, which added to the flurry of trading as Microsoft's strong results and guidance caused visions of sugar plums to dance in the heads of many investors. Share buybacks, the incredible launch of Halo 3 and the Windows Vista distribution cycle were all cited as factors for strong future performance indicators. Who knew Microsoft would ever be considered a winner of "long-term performance" back in 2005 by analysts?

Disclosure: I own MSFT shares as of 11-1-07.

DealBook reports that Google Inc. (NASDAQ: GOOG) is shoving more chips to the middle of the table in its battle for a stake in Facebook.

Facebook's investors, which include Accel Partners and Greylock Partners, want a deal that values Facebook between $10 billion and $15 billion. That would mean that Microsoft Corp. (NASDAQ: MSFT) or Google would have to fork over $1.5 billion for a 5% to 10% stake.

Who will win this Facebook face-off? Google wants to raise the price so high that Microsoft will walk away. But Microsoft is said to be willing to pay any price to keep Facebook away from Google. We'll know who wins in 24 to 48 hours.

But we won't need to wait that long to find the real winner -- Facebook CEO Mark Zuckerberg and his investors are guaranteed to make big bank on this deal regardless of who wins the Google-Microsoft face-off.

Update: The New York Times reports that Microsoft won the Facebook face-off -- paying $240 million for a 1.6% stake -- valuing Facebook at $15 billion. That's 100 times its expected $150 million in 2007 revenue -- valuing $1 of Facebook's sales at 7.1 times more than a dollar of Google's -- whose Price/Sales (P/S) ratio is 14.1 -- and 17.5 times that of Microsoft's which sports a P/S ratio of 5.7. It looks like the old school Harvard ties paid off (that's where Gates, Ballmer, and Zuckerberg attended college).

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Google or Microsoft.

Microsoft Corp. (NASDAQ: MSFT) completed its largest-ever acquisition this past summer, ponying up over $6 billion for internet advertising technology firm aQuantive. What happened here was simple: Google beat everyone to the gate for purchasing DoubleClick, arguably one of the largest influencers in internet advertising outside of Google's own kingdom. Was the aQuantive buy a knee-jerk reaction to Google's DoubleClick acquisition? To many, it was.

But now that the sting has passed, Microsoft CEO Steve Ballmer says that the world's largest software company wants to go after as much as 20 smaller acquisitions (priced from $50 million to $1 billion) instead of the next mega-billion-dollar deal. Although Microsoft has over $23 billion in cash and marketable securities on its hands, it still needs to watch which cookie jars it dips those golden hands into. In other words, no more knee-jerk reactive buys.

Is Microsoft, then, out of the running for competitor Yahoo, Inc. (NASDAQ: YHOO)? Probably, as the on-again, off-again talks between the companies (even if they both deny it) are probably gone for good. Ballmer may be playing his trump card when stating the company will focus on smaller acquisitions. All Ballmer is saying now is that Microsoft is focused on an "independent path" of acquisitions. Is this smoke and mirrors or the truth? Whip out that crystal ball and see if you dare. My guess: he's telling the truth, even as rumors swirl that Microsoft plans to take a 5% stake in Facebook.com.

When I look at Yahoo! Inc. (NASDAQ: YHOO) as I do periodically, I can not understand its valuation. I still have trouble with the valuation of Internet companies in general I suppose. Yahoo! closed yesterday at $24.95 per share and since it is one of our original eight blogging stocks it is on my watch-list.

During the course of the year I have read many buy (albeit speculative) opinions and it seems to stay in the news every day. But when I look at it as an investment I just cannot make any sense of it. There are many positive things I can think of about the company but a price-to-earnings ratio touching 49 is not one of them. It's too high! (Jim Cramer makes a different evaluation in his earlier post.)

It's nice that Yahoo! has no debt and I suppose if I wanted to speculate I would be encouraged that it is near a 52-week low. However this would not let me rest easy at night because I think that if earnings do not improve significantly it may be worth 35% less in the near future when others see what I see.

I see earnings that are weak and getting weaker. Yahoo! earned less in 2006 than 2005. In 2007 it earned less than 2006. As one of the prime pieces of web real estate this is not a good sign. Not only is Yahoo's earnings poor, but what it does with the earnings are not good either. It has an ROE, ROA and ROI that average about 7.7. so it's clear the company is not making a lot of money, nor does it know what to do with what it is making.

"Yahoo! Reports Fourth Quarter and Full Year 2006 Financial Results: Net income for the fourth quarter of 2006 was $269 million or $0.19 per diluted share (including $56 million of stock-based compensation expense, net of tax, recorded under the fair value method) compared to $683 million or $0.46 per diluted share (including $11 million of stock-based compensation expense, net of tax, recorded under the intrinsic value method) for the same period of 2005."

This article over at PC World churned up some food for thought over the weekend for me. The author makes many decent points about how computer industry stalwarts Microsoft Corp. (NASDAQ: MSFT) and Apple, Inc. (NASDAQ: AAPL) have pretty much changed places in terms of being monopolists in their chosen industries. Now, the term "monopolist" may be the only beef I have with the argument. There have always been loads of choices for consumers in the PC and music player industry. Loads.

But the legal trouble Microsoft ran into globally about a decade ago related to its "monopolistic" practice of bundling a web browser (Internet Explorer) into its Windows operating system is not happening to Apple when it "forces" customers to use its iTunes software to make that new iPod work. It's true that alternatives existed for Internet Explorer a decade ago (for informed consumers, anyway), and the same exists for iPods, new and old. You don't "need" iTunes to make it work, but the workarounds are far beyond the patience and technical level of most iPod customers. Therefore, can anyone argue that either company has a monopoly?

It's interesting to see the author point out that Apple is doing things with its digital audio player ecosystem (iPod/iTunes) that would have landed Ole' Softie in court years ago -- something I agree with. Apple makes products that are easy to use and feed the customer need for "just make it work" simplicity, and which are elegantly-designed to boot. Hence, these products sell incredibly well. What's monopolistic about that?

Conversely, Microsoft was not the only PC operating system years ago, although it was hard to buy a new PC without having a version of Windows already installed on it (forcing you to indirectly buy the software). As I said, there were always workarounds, but most customers do not want that -- they just want these products to work, and work well. Has Apple displaced Microsoft as the new monopolist of the high-tech industry? Or, should we even use the term "monopolist" at all?

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and watch out for more Battle of the Brands posts.

It seems that the competition that has been brewing between Apple Inc. (NASDAQ: AAPL) and Microsoft Corp. (NASDAQ: MSFT) has never really died down from the late 1970s, even as both companies have had ups and downs in the stock market and in the consumer products market as well. The battle between Apple and Microsoft has been (and will be) a perfect case study for future business textbooks at the best universities, as the fight between the two has been nothing short of amazing in the past 25 years or so.

Apple

Apple's start began with Steve Jobs (visionary guru) and buddy Steve Wozniak (tech guru) trying to find a way to get customers buying the personal computer before the market and world even knew what a personal computer was. Steve Jobs was trained in calligraphy and wanted the PC experience to be just as much an art and visceral, visible experience as a technical, computer program-interface experience. With that vision, and with a little help from friends, the two Steves started selling Apple's first PC products out of a garage about 27 years ago in the Southern California area, after Jobs dropped out of college due to lack of funds and general boredom.

What transpired throughout the early 1980s was the rapid growth of Apple Computer Inc. as the PC powerhouse at the same time it was grabbing the attention of MicroSoft (later renamed Microsoft Corp.) founder Bill Gates, who had dropped out of Harvard to pursue his vision of coming up with a PC operating system that he could "license" to all the big hardware manufacturers to use on their machines. But, Gates needed a nice interface to ensure his product was better than Apple's.