"Business Week" article points out, Fast Company is a professional search engine company, Microsoft acquired it help make up for it in Web search gap with Google it?
In the highly profitable Web search and related advertising market, Microsoft has been behind Google's.It now intends to use its cash reserves to acquire Norwegian search engine company, a professional, and hope to gradually make up for it with Google in market share gap.Microsoft on January 8 announced that it will be 1.23 billion to buy Fast Search & Transfer Company to enter the growing enterprise search software market.The higher price than the market price of the latter 42%.
Fast enterprise users use a search engine company's sales network to its digital information within the search, which is Microsoft's own search engine functionality is lacking.Fast Company employees use the software can be found stored in a massive enterprise server folder and database performance data.Consumers can also use this technique for rapid on-line product catalog search.Best Buy retailers in the holiday period has been improved by Fast Company's software on its Web site search engine.
Better return?
Microsoft's business software division president Jeff Raikes will be called enterprise search technology company dealing with the explosive growth of the product and performance data issues an indispensable tool.He announced the deal after the conference call, said: "Enterprise search is on for the future of workers relative to the current significance of the Internet for consumers." Fast's software may also help Microsoft improve its networksearch engine, and support research and development in Europe.
The transaction is to obtain a satisfactory return mainly on two issues: whether Microsoft is using its network of direct sales force and resellers to rapidly increase sales of Fast Company Software, which is part of the revenue can Raikes ledbranch to make a greater contribution to the performance?Branches of commercial software products include the company's flagship Office suite, the total annual revenue reached 164 billion U.S. dollars.Another problem is that Fast Company's nearly 200 engineers are able to apply their professional knowledge of consumer Web search and online software?Because this part of the business is key to Microsoft's business.
In the deal before the news release, Fast Company is in a difficult period in its stock price fell over the past two years about half.Companies have been laid off, the last two quarters are also at a loss.Microsoft has agreed to $ 3.54 per share to buy Fast Company stock.This press release price stock market price Fast 41% higher.Fast Company, said the board of directors and largest shareholders have accepted the two of Microsoft's bid.Orkla shareholders made in December requires companies to rectify the board of directors.
Pacific Crest Securities senior vice president and research analyst Brendan Barnicle said that Microsoft's acquisition of Fast Company will use up less than three weeks of cash flow, it might give the company more than share buybacks and dividends to bring higher returns.Barnicle said: "Microsoft has been investing in cash of various things in the world, but are related to stock nothing to do." Microsoft's stock closed at on January 8 $ 33.45 per share, down $ 1.16, down 3.35%.Barnicle is expected in the next twelve months, Microsoft's stock target price of 42 U.S. dollars per share.
Compete for market share
The acquisition will enable Microsoft's enterprise search software market immediately in a large market share, as Fast Company has many high-end customers, including Merrill Lynch, Disney, Best Buy, Pfizer and Dell.The size of this market is now about 48 billion U.S. dollars, Fast Company's major competitors, including Google, IBM, Autonomy, Oracle and SAP, among others.Fast Company's sales target in 2008 is 2 billion dollars, about 2007 high of 20%.UBS analyst Heather Bellini in a report to clients, said Microsoft's direct sales force and reseller network will strive to achieve that goal.
Microsoft plans to Fast's technology with its own SharePoint server software together.It is also possible that Microsoft could increase Fast software customization company, AMR Research analyst Jim Murphy said, this is Google's enterprise search server features are not available.Microsoft can also use the Fast Company Live Series technology to increase their online software functionality, so users can more easily use that software to find the information they produce and store the information in enterprise data centers.
But Fast Company is to help Microsoft reduce it with Google Web search in the mainstream market, the gap is another matter.Microsoft's market share has been less in 11 months, it was only 9.8% market share, while Google and Yahoo's market share was 58.6% and 22.4%.Barnicle said: "I can not determine whether there are ways of Microsoft in Internet search technology to balance the Fast Company."