Gartner Expects Media Push From Microsoft11 Apr, 2002 By: Hive News
As the federal government's antitrust case against Microsoft winds down, the company has built up a cash reserve of $38 billion and will be looking for acquisitions – some in the media market, according to a new research report from Gartner, Inc.
Gartner anticipates Microsoft making major acquisitions in video codecs, broadband technologies and digital protections.
By year-end 2005, Microsoft will spend as much as $1 billion to further its media goals but will not attempt major acquisitions with the goal of becoming a media company, Gartner forecasts.
"Rather than becoming a traditional media company, Microsoft is much more interested in becoming a strategic technology provider to traditional media companies," said David Smith, a Gartner VP and research director. "We expect more investments in broadband that will drive demand and ensure Microsoft technologies are considered by companies, rather than Microsoft acquiring Yahoo! for example."
Over the past 10 years Microsoft has acquired more than 60 companies, but its acquisition activity has slowed during antitrust proceedings. The largest recent acquisition was in December 2000.
"Holding off on acquisitions was cautious and sensible and maintaining significant cash on hand was a wise insurance policy in the unlikely event Microsoft had been forced to split into two or more companies,'' said Tom Bittman, a Gartner VP and research director. "Now that it appears Microsoft will come through the case somewhat unscathed, it will find a way to invest this cash through key acquisitions."
The Gartner report, Microsoft: Back and Stronger Than Ever, includes detailed analysis on Microsoft's outlook in various business segments.