BOARD OF DIRECTORS
Company Profile
 Bill Gates, Chairman
 Steve Ballmer, CEO
 Dina Dublon
 Raymond V. Gilmartin
 Reed Hastings
 Maria M. Klawe
 Stephen J. Luzco
 David F. Marquardt
 Charles H. Noski
 Dr. Helmut Panke
 John W. Thompson
Microsoft Corporation
One Microsoft Way
Redmond, WA 98052-7329
USA
Tel: (425) 882-8080
Fax: (425) 706-7329
msft@microsoft.com
http://www.microsoft.com
SENIOR EXECUTIVES
 Steve Ballmer, CEO
 Tony Bates, President, Skype
Division of Microsoft
 Lisa Brummel, CPO
 Kurt DelBene, President,
Microsoft Office Edition
 Peter Klein, CFO
 Andrew Lees, President,
Microsoft Corp.
 Qi Lu, President, Online
Services Division
 Don Mattrick, President,
Interactive Entertainment
Business
 Craig Mundie, Chief Research
and Strategy Officers
 Terry Myerson, Corporate
VP, Windows Phone Division
 Satya Nadella, President,
Server & Tools Business
 Eric Rudder, Chief Technical
Strategy Officer
 Steven Sinofsky, President,
Windows & Windows Live
Division
 Brad Smith, General Counsel
an Executive VP, Legal and
Corporate Affairs
 Kirill Tatarinov, President,
Microsoft Business Solutions
Division
 B. Kevin Turner, COO
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Founded in 1975 as a software development company
Went public on Nasdaq (MSFT) in 1986
o Market cap: 249.38B
o Shares outstanding: 8.38B
Key products include PC and mobile device operating
systems, video games, and software applications for
business & personal use
Best known for Windows operating systems, Microsoft
Office Suite, XBOX video game console, and the Bing
online search engine. New products include the Surface
tablet computer
Major hardware partners include Dell and Hewlett-Packard
Competitors include Apple, Google, IBM, Yahoo!, and
Barnes & Noble
5 Divisions
o Windows & Windows Live
o Server & Tools
o Online Services
o Microsoft Business
o Entertainment & Devices
Global business based in the United States, with support
centers in Europe, Asia and the Americas
90,000+ employees worldwide
Financial Summary
Microsoft’s 10-K filing shows 2012 revenue as $73,723
million, up from 2011’s $69.943 million (an increase of 5%). 2012
profit was $56,193 million. The company is publicly traded on the
Nasdaq, with a 2012 high of $32.95/share. During fiscal year 2012,
 Nasdaq: MSFT
 Stock price July 27, 2012:
$29.75
 Fiscal Year 2012
o Stock high: $32.95
o Stock low: $23.79
 NAICS Codes
o 511210 - Software Publishers
o 334119 - Other Computer
Peripheral Equipment
Manufacturing
o 511130 - Book Publishers
o 511140 - Directory and
Mailing List Publishers
o 512110 - Motion Picture and
Video Production
o 541511- Customer Computer
Programming Services
o 541512 - Computer Systems
Design Services
o 541990 - All Other
Professional, Scientific, and
Technical Services
 SIC Codes
o 7372 - Prepackaged Software
o 7371 - Computer
Programming Services
o 7379 - Computer Related
Services, Not Elsewhere
Classified
o 7373 - Computer Integrated
Systems Design
o 7389 - Business Services, Not
Elsewhere Classified
o 3577 - Computer Peripheral
Equipment, Not Elsewhere
Classified
o 2731 - Book Publishing and
Printing
o 2741 - Miscellaneous
Publishing
o 7812 - Motion Picture, Video
Tape Production
Microsoft’s long-term debt increased to $13.2 billion. 13% of
revenue is spent on R&D yearly.
Mobile Technology
Microsoft’s 2011 partnership with Nokia resulted in the
Windows Phone, offered with service through AT&T. In 2012,
Microsoft announced a new tablet (“Surface”) that will compete
with Apple’s iPad tablet and feature the Windows 8 operating
system. A price has not yet been announced, but two versions of the
Surface are expected to debut in fall 2012.
E-Readers and E-Books
In spring 2012, Microsoft announced a partnership (referred
to as “Newco” in press releases) with bookseller and e-reader
developer Barnes & Noble. Barnes & Noble’s Nook is the second
most popular e-reader sold (behind Amazon’s Kindle), but the
company is still losing money on the technology. Microsoft has
invested $300 million into a partnership focusing on the Nook and
e-reader technology, as well as the bookseller’s digital book and
B&N College divisions. As a result, Microsoft will have a 1/6 share
in the new company, and may have the opportunity to increase their
customer base by incorporating Windows 8 software into the Nook
hardware. This will also allow other customers to take advantage of
Nook apps and e-books on mobile devices running on Microsoft
software.
The company’s previous foray into e-books and e-readers,
Microsoft Reader, was launched in 2000 as a PC-based application;
it will be discontinued effective August 30, 2012.
Investment Considerations
Pirating and free software offered by competitors are of
major concern for Microsoft, as the bulk of their profits come from
licensing fees. In addition, Microsoft was founded as a software
company and makes the most gains in this area; adding a major
focus on hardware development and production puts the company
into somewhat uncharted territory. Their 10-K filing admits that
they might not make “significant revenue from new product and
service investments for a number of years, if at all.” Investors
should also be mindful of the company’s long-term debt.
However, Microsoft’s recent partnership with the wellestablished Barnes & Noble and the resulting new company provide
an exciting opportunity for Microsoft to focus on its software
strength while entering into the competitive e-reader market.
BBC News. (2012). Microsoft invests in Barnes & Noble’s Nook e-books. Retrieved July 28, 2012, from
http://www.bbc.co.uk/news/business-17896534
Board of Directors. (2012). Retrieved July 29, 2012, from http://www.microsoft.com/en-us/news/exec/bod.aspx
Business & Company Resource Center. (2012). Retrieved July 25, 2012, from
http://www.microsoft.com.ezproxy2.library.drexel.edu
Closing the Book. (2012). Retrieved July 28, 2012, from
http://www.microsoft.com/reader/info/support/faq/closing.aspx
CNET. (2012). Microsoft Surface RT. Retrieved July 25, 2012, from http://reviews.cnet.com/tablets/microsoftsurface-rt/4505-3126_7-35332494.html?tag=mncol;txt
Facts About Microsoft. (2012). Retrieved July 25, 2012, from http://www.microsoft.com/enus/news/inside_ms.aspx#OperationCenters
Google Finance. (2012). Microsoft Corporation. Accessed July 29, 2012, from
https://www.google.com/finance?client=ob&q=NASDAQ:MSFT
Microsoft Corporate Logo Guidelines. (2012). Retrieved July 29, 2012, from
http://www.microsoft.com/about/legal/en/us/intellectualproperty/trademarks/usage/logo.aspx
Microsoft Corporation - 10-K form. (2012). Retrieved July 27, 2012, from
http://www.sec.gov/Archives/edgar/data/789019/000119312512316848/d347676d10k.htm
The Digital Reader. (2011). Microsoft to retire MS Reader, their ebook format. Retrieved July 28, 2012, from
http://www.the-digital-reader.com/2011/08/15/microsoft-to-retire-ms-reader-their-ebookformat/#.UBWMMrSFqSp
The Digital Reader. (2012). B&N spins off Nook & B&N College – MS to invest $300 million (a deeper look).
Retrieved July 28, 2012, from http://www.the-digital-reader.com/2012/04/30/bn-spins-off-nook-bn-collegems-to-invest-300-million-a-deeper-look/#.UBWMTrSFqSo
Wired. (2012). Microsoft finds a new nook in e-books. Retrieved July 28, 2012, from
http://www.wired.com/business/2012/04/microsoft-nook-investment/
The Wall Street Journal. (2012). Microsoft’s E-book deal with Barnes & Noble has familiar plot. Retrieved July
28, 2012 from http://online.wsj.com/article/BT-CO-20120430-718195.html
Senior Leaders. (2012). Retrieved July 29, 2012, from http://www.microsoft.com/en-us/news/exec/slt.aspx
Academic Honesty Statement
I, Amanda S. Palmer, certify that:

This paper/project/exam is entirely my own work.

I have not quoted the words of any other person from a printed source, online source, or a website without
indicating what has been quoted and providing an appropriate citation.

I have not submitted this paper / project to satisfy the requirements of any other course.
Signature
Amanda S. Palmer
Date July 29, 2012