Microsoft on Monday announced a new stock buyback program, saying it would repurchase up to $40 billion worth of its shares through September 2013.
The company also announced plans to sweeten its quarterly dividend to 13 cents, up from the current 11 cents per share, as well as to float up to $6 billion in corporate debt. Part of those proceeds could be used for stock repurchases.
The news boosted the software giant's share price by 3 percent in morning trading, to around $26 per share. Microsoft recently completed a previous $40 billion share buy back.
Two views on the move:
Trip Chowdhry, tech industry analyst at Global Equities Research, thinks the plan is premature. He argues passionately that no big tech supplier is immune from the big hit the tech sector is about to take, as IT spending on tech gets pulled back.
Chowdhry believes Microsoft is moving way too quickly to buy shares at prices sure to be driven much lower. He is in the camp that believes the tech sector is about to crater, as ramifications of the financial markets meltdown play out. "If it was the right move, at the right time, Microsoft would have jumped $5 -- and that ain't happening," Chowdhry says.
The brain trust at Citi Investment Research Disclosures begs to differ. In a report released this morning, Citi analysts opine that Microsoft's new buyback plan stands to boost the software giant's anemic earnings per share, or EPS, a key benchmark investors watch.
Citi says Microsoft senior execs are "bewildered" as to why the company's EPS is among the lowest of major tech suppliers. Citi expects Microsoft to accelerate stock buybacks -- now that an outright Yahoo takeover appears to be dead -- at a pace that could boost Microsoft' EPS nicely over the next two years.
By Byron AcohidoPhoto: A scene from Microsoft's new "I'm a PC" commercials.
The U.S. and China are epicenters for attempted PC break-ins -- and by a wide margin.
Hackers so far have launched 20.6 million attacks from computers within the USA this year, based on research by computer-security vendor SecureWorks. China is second, with 7.7 million tries. Often, the intrusions originate from the compromised PCs of consumers.
Brazil was a distant third in attempted attacks, with 166,987. The rest of the top 10: South Korea (162,289), Poland (153,205), Japan (142,346), Russia (130,572), Taiwan (124,997), Germany (110,493) and Canada (107,483).
The statistics “clearly show the United States and China have a lot of vulnerable computers that have been compromised and are being used as bots to launch cyberattacks,” says Hunter King, a security researcher for SecureWorks. “This should be a warning to organizations and personal computer users that, not only are they putting their computers and networks at risk by not securing them, but they are actually providing these cybercriminals with a platform from which to compromise other computers.”
Secure Computing advises consumers can greatly improve their PCs by keeping their web browser and operating system up to date, using the latest versions of antivirus and antispyware software, following safe computer practices such as being wary of the websites they visit, and not clicking on attachments and links within suspicious e-mail messages.
By Jon SwartzPhoto: The American flag in China during the Beijing Paralympic Games last week. (Elizabeth Dalziel, AP)
With Wall Street in full retreat, it makes good sense for tech giants Microsoft and Hewlett Packard -- and even sports wear maker Nike -- to take some of the billions steadily pouring in from sales of Window PCs, HP printers and Nike sneakers, respectively and use some of that cash flow to buy back company shares at bargain outlet prices, says Bill Whyman, head of tech research at International Strategy & Investments.
Whyman points out that Microsoft reported $21.6 billion in cash flow from operations in its fiscal year ended June 30, while HP reported $11.3 billion in cash flow from operations over its most recent three fiscal quarters. "That's a lot of cash," he says. "They can invest it, spend it in sales and marketing, do capital projects, make acquisitions, or give it back to shareholders in the form of dividends and share buybacks."
No one expects Microsoft's latest $40 billion buyback program, to be carried out between now and 2013, to jack up the company's long stagnant share price; but it should help buttress the tech giant's market valuation from getting sucked down the drain, along with the broader stock market, as the financial market melt down unfolds.
"I do think the buyback is a wise move at this time," says tech stocks analyst Sid Parakh of McAdams Wright Ragen. " Microsoft as a company is looking to build shareholder value in the long-term and I believe that they will leverage every downtick in the stock to do so. Bottom line –- it is a cheap stock and shareholders will be well-served" by the buyback plan.
By Byron AcohidoPhoto: R&B star Usher holds a pair of Nikes. (Rick Diamond/Getty Images)
The Google phone has finally arrived! The G-1 has a slide-out QWERTY keyboard, and a trackball for navigation. Other features include 3G network connectivity and the ability to zoom on something by tapping on the screen.
The price: $179 with a two-year service contract.
You can order it today at http://www.t-mobileg1.com/, or it will be in T-Mobile and some retail stores on October 22. It will be available in the United Kingdom in November and other European countries next year.
Although Google provided much of the phone's software, the hardware is actually made by HTC, a Taiwanese manufacturer of phones, laptops, and other devices. Until recently, HTC was a little-known firm that manufactured products for other companies (including Verizon and Sprint Nextel) behind the scenes. But HTC has begun selling phones under its own name, including the Touch Diamond, which resembles Apple's iPhone.
The G-1 is already winning over some Wall Street analysts. "At a time when Microsoft or Yahoo (can) not challenge Google’s global domination in search, Google is already...starting to capture the next big opportunity...thus creating more challenges for its competitors in the years to come," Sandeep Aggarwal of Collins Stewart wrote in a research note this morning.
There's plenty of competition, however. Here's the top five smartphones, according to ComScore:
3. Motorola Q
(Smartphones typically have an operating system, like a PC, and can download and run programs.)
By Michelle KesslerPhoto: Jacob Silberberg, Reuters
I doubt we'll see long lines around T-Mobile Stores Oct 22 when the T Mobile G1 with Google phone goes on sale.
The long-anticipated device was officially announced this morning at a press conference under New York City's 59th Street Bridge. It's the first phone to run Google's Android mobile software platform.
The $179 device (with a two-year voice and data contract) has such niceties as a slide out QWERTY keyboard and touch screen. Consumers will be able to download applications, some free, some not, from the Android Market storefront. There's also an MP3 store from Amazon.
It comes with a 1GB SD card that can hold about 500 songs (expandable to 8GB).
The device has GPS location-smarts, Bluetooth, Wi-Fi, voice recognition, and an iPhone-like "accelerometer" motion sensor. As you might imagine there's easy one-touch access to a offerings from Google's own herd, including Gmail, YouTube, and Google Maps Street View (complete with a built-in compass). And there's an HTML-Web browser with a zoom function that expands the size of the screen when you tap your finger. Alas, you cannot "pinch" the screen to expand Web pages as you can on an iPhone.
The interface, which I want to test out more, has potential. I like the way you can drag menus down from the top of the screen.
That said, in an era when good looks and fashion count nearly as much as the smarts, especially with consumers, the 5.6-ounce G1 won't win any beauty contests. The hardware is frankly homely-looking next to an iPhone or one of the newer Research In Motion BlackBerry's. The device, which is made by HTC, comes in black, white or brown.
The G1 is targeted for now at consumers rather than the large enterprises that RIM dominates with the BlackBerry. There's no Microsoft Exchange support for corporate email at this stage.
Indeed, there's something of an unfinished feel to the device. "Part of it feels likes an iPhone wannabee," says Michael Gartenberg an analyst with Jupitermedia. "As a first effort it's not bad."
"Not bad" is about my take too, at least based on the little bit of time I've had to actually pick the thing up. Whether "not bad" is good enough in this highly-competitive space remains to be seen, though having Google's market power and financial resources ought to help. "If it was anyone else but Google we wouldn't be here," Gartenberg said.
T-Mobile is only now pushing out its 3G or third generation network in certain markets; the phone presumably will not work as well in areas of marginal 3G coverage. (That's where Wi-Fi may help in certain instances.)
Google is also pushing Android's "openness" with third party developments. Google's Andy Rubin says that makes it "future-proof." But for all the benefits to openness with developers, ordinary consumers can't distinguish an "open" platform with a closed one such as Apple's. All they want are fun and/or useful applications.
I did spend a few minutes playing Pac-Man (poorly) on the device. I briefly checked an application called ShopSavvy which lets you compare prices and bring up product information by scanning the barcode on the product. Another app I got a quick peek at is called Ecorio, which helps you track your "carbon footprint" based on your recent travels.
I'm looking forward to testing the G1 out in the real world.
By Ed BaigPhoto: Mark Lennihan, AP
Adobe announced a whole new suite of Creative Suite 4 software upgrades Tuesday for its flagship image, web and video editing applications, such as Photoshop, Premiere and Dreamweaver.
If you want them all, it’ll cost $2,500 when they go on sale in October. Or you can get stand-alone versions, (such as Photoshop) for $699, or $199 for an upgrade.
We spoke to Adobe senior product manager John Nack about the new Photoshop CS 4, which he says runs faster and more efficiently because Adobe took advantage of something new: video cards.
The graphics cards for desktop computers have gotten cheaper, and much more powerful. Adobe was able to tap into the power of the cards to make productivity much faster, he says.
“A good graphics card will now blow away other computers that don’t have them,” says Nack. He recommends any card that supports “Shader Model 3.”
Nack demonstrated a 442 megapixel image (a composite of many, many images) to show the speed of the new Photoshop. Nack was able to open it quickly, and more importantly, zoom around the image and make adjustments without waiting and waiting for rendering.
Photoshop was last upgraded in April, 2007. Since then, Adobe has also added a free, entry-level web version of Photoshop, Photoshop Express, an update to the consumer level $99 Photoshop Elements, and a new addition to the library, Photoshop Lightroom, for photographers to quickly zip through large collections and make minor edits.
So why spend more money with Adobe on yet another new Photoshop program?
“Some people will be perfectly happy with what they have,” he says. “But for anyone who wants the latest, best technology, this is it.”
By Jefferson GrahamPhoto: Adobe
ProShow Gold and ProShow Producer, software programs beloved by photographers, now supports burning to high-definition Blu-Ray discs, the next generation DVD discs.
We know what a difference high def makes with video. But for photos? There's no such thing as a high-def JPG. So what’s the big deal?
Paul Schmidt, the founder and president of Austin, Texas based Photodex, which makes the programs, set us straight.
“It’s like taking a picture with a 1 megapixel camera, and then moving to a 6 megapixel,” he told us. “You have six times the resolution—or six times as many dots. You see more definition, more colors, your show is sharper.”
Photo slideshows -- a string of pictures set to music -- have become really popular thanks to the explosion of digital photography, and ease of posting on the Web. While many software programs (Roxio’s Easy Media Creator, Nero, Slide.com) let you make slideshows, ProShow Gold (the $69.95 consumer application) and Producer ($249.95, targeted to professionals) offer more controls and sharing options.
Shows can be posted online to blogs or websites, direct to YouTube, and burned.
Photodex’s programs also work with video clips, but it’s with photos where the high-def is more dramatic, says Schmidt. “When I show people photos on DVD, and then the same show on Blu-Ray, they are blown away,” he says.
To go the Blu-Ray route, you’ll need at pick up a Blu-Ray burner (we found a Lite-on for $239 at Newegg.com). For the living room, if you don’t already have one, a Blu-Ray player as well—Newegg.com offers a Panasonic for $339.
Then there’s digital media, which is substantially more expensive than regular DVD media. Schmidt says he’s found recordable Blu-Ray discs for $7 each. Regular DVDs can be found for around 25 cents. But if you want to start using Blu-Ray for backup, you get a lot more room—25 gigabytes, vs. 4.7 GB on standard DVD.
By Jefferson GrahamPhoto: Photodex
The Force is with this game. Star Wars: The Force Unleashed, released last week (Tuesday in the USA), could become the best-selling Star Wars game of all time. Already the game has sold over 1.5 million copies worldwide, publisher LucasArts says. For its launch, the company shipped more than 4.3 million copies of the game (for all popular game systems), which lets players wield the magical "Force" as Darth Vader's secret apprentice. The storyline falls between the end of Star Wars, Episode III: Revenge of the Sith and the first theatrical Star Wars film, Episode IV: A New Hope.