August 25, 2010

Microsoft Corporation

Is this a good thing?
Image by melted_snowball via Flickr
Microsoft is an American multinational computer technology corporation based in Redmond, Washington. Bill Gates and Paul Allen founded the company in Albuquerque, New Mexico on April 4, 1975 after Gates went on leave from Harvard University. Micro Instrumentation and Telemetry Systems (MITS), the company that created the Altair 8800 microcomputer, was based in Albuquerque. Gates visited MITS to show them his implementation of the BASIC programming language using their system. Microsoft moved its headquarters to Bellevue, Washington on January 1, 1979, and then to Redmond on February 26, 1986, where it still remains. The company's initial public offering was held on March 14, 1986. The stock, which eventually closed at US$27.75 a share, peaked at $29.25 a share shortly after the market opened for trading. At the time, Gates owned 45% of the company's 24.7 million outstanding shares, and Allen owned roughly 25% of the shares. After the offering, Gates was worth $233.9 million and Microsoft had a market capitalization of $519.777 million. Microsoft has acquired 128 companies, purchased stakes in 60 companies, and made 24 divestments. Of the companies that Microsoft has acquired, 99 were based in the United States. Microsoft has not released the financial details for most of these mergers and acquisitions. Microsoft's first acquisition was Forethought on June 29, 1987, which was founded in 1983 and developed a presentation program that would later be known as Microsoft PowerPoint. On December 31, 1997, Microsoft acquired Hotmail for $500 million, its largest acquisition at the time, and integrated Hotmail into its MSN group of services. Hotmail, a free webmail service founded in 1996 by Jack Smith and Sabeer Bhatia, had mo re than 8.5 million subscribers earlier that month. Microsoft acquired Seattle-based Visio Corporation on January 7, 2000 for $1.375 billion. Visio, a software company, was founded in 1990 as Axon Corporation, and had its initial public offering in November 1995. The company developed the diagramming application software, Visio, which was integrated into Microsoft's product line as Microsoft Visio after its acquisition. On July 12, 2002, Microsoft purchased Navision for $1.33 billion. The company, which developed the technology for the Microsoft Dynamics NAV enterprise resource planning software, was integrated into Microsoft as a new division named Microsoft Business Solutions, later renamed to Microsoft Dynamics. Microsoft purchased aQuantive, an advertising company, on August 13, 2007 for $6.333 billion, Microsoft's largest acquisition. Before the acquisition, aQuantive was ranked 14th in terms of revenue among advertising agencies worldwide. aQuantive had three subsidiaries at the time of the acquisition: Avenue A/Razorfish, one of the world's largest digital agencies, Atlas Solutions, and DRIVE Performance Solutions. Microsoft acquired the Norwegian enterprise search company Fast Search & Transfer on April 25, 2008 for $1.191 billion to boost its search technology. Since Microsoft's first acquisition in 1987, it has purchased an average of six companies a year. The company has purchased more than ten companies a year since 2005, and acquired 18 firms in 2006, the most in a single year, including Onfolio, Lionhead Studios, Massive Incorporated, ProClarity, Winternals Software, and Colloquis. Microsoft has made four acquisitions worth over one billion dollars: aQuantive, Fast Search & Transfer, Navision, and Visio Corporation. Microsoft has also purchased several stakes valued more than a billion dollars. It obtained an 11.5% stake in Comcast for $1 billion, a 22.98% stake in Telewest Communications for $2.263 billion, and a 3% stake in AT&T for $5 billion. Among Microsoft's divestments, in which parts of the company are sold to another company, only Expedia, Inc. was sold for more than a billion dollars; USA Networks purchased the company on February 5, 2002 for $1.372 billion. On August 17, 2006, Microsoft acquired 7.92% of its own common stock for $20 billion.

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