Microsoft effectively defined the nature of modern computing in the 1990s, though it later lost its crown to Google and Apple. Bill Gates and his colleagues didn't invent computers, the graphical interface or internet browsing. But they came to dominate most users' experience of all three in the 1990s and 2000s. As a result, for several years, Microsoft was the world's most valuable corporation, with a market capitalisation bigger than businesses five times its size by revenues. However, it was also the industry's most hated entity, juggling a string a lawsuits from smaller rivals it had elbowed into oblivion. More recently, peace has broken out at Microsoft. This partly because the company worked hard to rebuild bridges, using part of its huge cash stockpile to settle legal rows with rivals and forge strategic alliances. But just as important was the fact that its role as the big bad giant of the industry was to some extent transferred to Google. Microsoft has attempted to keep pace with Facebook and other rivals with a string of high-priced - but often ill-fated - acquisitions including internet advertising giant aQuantive, online phone service Skype, and Nokia mobile phones. Skype continues but Microsoft shuttered its mobile handset business in 2017. Search engine Bing and tablet Surface have also struggled at times to justify their existence, while Xbox too has proved mercurial. Yet the oldest products are still Microsoft's bread and butter. Despite their age, Windows and Office continue to dominate most PC users' daily activities. The company's biggest acquisition to-date was business-oriented social network LinkedIn in 2016 for a mammoth $27bn. After a slow start, it is gradually beginning to justify its purchase. The new joker in the pack is Microsoft's cloud computing platform Azure. It has quietly come to dominate its market in both revenues and profitability, prompting an unexpected spike in Microsoft's share price. In 2019, the company overtook all its younger tech rivals to yet again seize the crown of the world's most valuable corporation, worth in excess of $1 trillion. The rebirth of Microsoft has been overseen by Satya Nadella, who succeeded Steve Ballmer as CEO in 2014. For the year to June 2020, Microsoft reported record revenues of $143.0bn and best-ever profits of $44.3bn.
Capsule checked 21st August 2019
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Historical profile information for Microsoft
Adbrands Daily Update 13th May 2021: The Cannes Lions Festival - which will be virtual this year after last year's cancellation - named Microsoft as recipient of the Creative Marketer of the Year. That's as much a tribute to the global McCann network as it is to Microsoft. More or less all of the company's most acclaimed campaigns over the past decade have been produced by McCann for Xbox. Microsoft follows in the footsteps of previous winners Apple (2019), Google (2018), Burger King (2017), Samsung (2016), Heineken (2015), McDonald's (2014) and Coca-Cola (2013).
Adbrands Daily Update 12th Apr 2021: Microsoft added to its reach with the acquisition of speech recognition specialist Nuance Communications. With a price tag of $16bn plus $3.9bn of assumed debt, the deal is the second biggest to-date agreed by CEO Satya Nadella. Nuance is a pioneer in its field, and supplied the technology for the first version of Apple's Siri system. Voice assistance is a market where Microsoft still lags some way behind Apple, Amazon and Google. However, Nadella envisages Nuance as a stepping stone to developing more sophisticated voice assistant services not for the consumer market but for the healthcare industry. The two companies already collaborate on several projects in this area.
Adbrands Daily Update 26th Mar 2020: Still intent on expanding its footprint in social media, Microsoft has entered exclusive negotations to acquire the messaging platform Discord. Price tag is expected to come in at around $10bn. Now accessed by around 140m users a month, Discord is most widely known within the gaming community as a platform for text, audio and video chatting between players. As such, it would fit neatly alongside Microsoft's Xbox business and might also be expanded to partner the software giant's business social service LinkedIn. The deal, if it materialises, would be Microsoft's biggest since LinkedIn itself, five years ago. [Updated 21st Apr: Those talks later ended without agreement, and Discord is said to be mulling an IPO instead.]
Adbrands Daily Update 22nd Sep 2020: Microsoft was no doubt pleased to be able to walk away from the increasingly chaotic TikTok negotiations, and instead signed off on its biggest-ever purchase of a games developer. It has agreed to acquire ZeniMax Media, owner of Bethesda Softworks and seven other development studios, for $7.5bn. Games titles under the ZeniMax umbrella include the Doom, Quake, Fallout and Elder Scrolls franchises.
Adbrands Daily Update 14th Sep 2020: Oracle was the unlikely victor in the auction to take control of TikTok in the US. President Trump had said he would ban the Chinese social media sensation unless it was acquired by a US company, on grounds that it constitutes a threat to national security. Microsoft, with backing from Walmart, had been considered the most likely purchaser of TikTok. However its Chinese owners preferred a late bid from Oracle, which appears to have less far-reaching implications with regard to ownership. Terms have not yet been disclosed, but Oracle is being described as TikTok's partner rather than a purchaser. This arrangement must still be approved by the White House and the Committee on Foreign Investment in the US. However, Oracle's founder and CEO Larry Ellison is an high profile fundraiser for Donald Trump, which makes approval more or less certain. That's the way things generally work in the Trump White House. Microsoft CEO Satya Nadella is not known to be a Trump supporter.
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