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Microsoft is Gambling Its Profits Online
A lot of financial analyst grumble that Microsoft is putting too much of its profits to its online services endeavors. However, everyone cannot help but think that Microsoft may be on to something. Think about it; wouldn’t the newspaper industry also have some complaints a decade ago if Gannetts and Knights put their profits into online ventures when they were enjoying big profits from their ad revenues? And wouldn’t the newspaper industry now think that it was a brilliant idea right now if Gannetts and Knights have actually done this?
Traditionally, newspapers have been funded by advertising in areas such as help wanted, real estate, and car sales. Had a large newspaper company invested in online advertising earlier, it would have been in a much better shape. This analogy is not perfect though because newspaper lose revenue to internet sources. Meanwhile, Microsoft is steering clear of advertising by concentrating on its software.
A battle between Google and Microsoft is fast beginning to appear. The real question is whose economic power would become stronger. Google is funding its data centers through online advertising while Microsoft is using its Windows software to fund its ventures. Microsoft needs to show results from its online ventures to recover its investments.
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