Friday, October 07, 2005

CHR: The Web War Is Over - And Microsoft Lost

The most important 9 pages you have to read, if you are an investor in Google, Yahoo! or Microsoft or if you are considering to be one! Fantastic reading and great analysis from Cherry Hill Research (CHR) which has former Top ranking Wall Street equity analyst Henry Blodget as President. This is really the essential reading on the battle between the three contenders.

If you don't have Adobe reader - get it here:

Conclusion from the analysis:
"There will be no great war between Microsoft and Google/Yahoo!, because despite Microsoft's vast resources, Google/Yahoo! have already left MSN far behind. There will be skirmishes, of course, but these will be irrelevant. Microsoft is as far behind in the web business as it was when it launched its online effort ten years ago, and short of disastrous mistakes by Google and Yahoo! nothing Microsoft does on its own is likely to change that. Microsoft's best chance to make MSN the industry leader is to spin off, most likely in a merger with AOL. This won't guarantee success-the combined entity would still be in third place-but it would create a company far stronger than either AOL or MSN on its own.

Some of the most important points from this paper in my opinion:
  • All the other "battles" that Microsoft has won was software battles - this is not software, its media
  • MSN might be trying to play catch-up - but they are still today loosing ground on Yahoo! and Google (fast)
  • Google's 2005 operating profits will most likely exceed MSN's 2005 revenue
  • Most industries tend to have three large players and a group of niche players - MSN and AOL are fighting to be the third - one will most likely dwindle unless combined

Have a great weekend!

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