Novice Investing - Symantec Grills Microsoft

Date: Friday 05th 2008f September 2008 05:49:48 PM

Symantec Grills Microsoft - 05/22/2006

By: Novice Investing Staff

Bad news keep coming for Microsoft Corp. (MSFT). The software titan receives a lawsuit from anti-virus makers, Symantec Corp. (SYMC), claiming that Microsoft has breached a contract relating to a licensing deal with Veritas, which Symantec acquired.

The technology in question was called Volume Manager, which allows operating systems to manipulate and store a large volume of data. Symantec claims that Microsoft uses this feature in its upcoming window Vista release and seeks an injunction to ban the distribution and release of window Vista. This is what Microsoft needs last. A short while ago, the stock dropped 8% on disappointing earning guidance and huge increase in R&D budget. This increase is related to Microsoft's ongoing battle with search titan, Google Inc. (GOOG).

The only positive investing in Microsoft stock is its huge cash pile and the upcoming release of Window Vista. If Symantec win this judgement, well then, there is zero reason left for investing in Microsoft. It throw away $ 2 Billion while its Window Vista are prohibited to be sold. If you are new to Microsoft, about 90% of its profit came from selling operating systems and office suites. Therefore, winning the case is a huge deal for Microsoft. In fact, it will be the question for survival for Microsoft.

While it is not in danger of going bankrupt, operating system is the lifeblood of Microsoft. If window Vista is delayed further, there is no question that the stock will react negatively. Give it a few more setbacks and we are sure that Microsoft will be just another company to remember you by.



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Disclaimer: The sole purpose of this article is educational. This article is merely the opinion of the writer and is not in any way a buy/sell recommendation regarding Microsoft Corp. (MSFT) or any other securities.

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