The bull run in Microsoft Corp’s stock this past year has helped the tech giant surpass ExxonMobil Corp and seize the rank of the second-most valuable company, behind Apple Inc.
Under new chief executive Satya Nadella, Microsoft has worked to overcome its reputation as a clumsy behemoth struggling to keep up with new tech trends and consumer habits.
Nadella has cut expenses — and jobs — while pledging to refocus the company on mobile technology and cloud computing. His efforts have fueled a stock surge that drove Microsoft’s total market value above US$410 billion on Friday. That leapfrogged ExxonMobil’s value of US$404 billion, which has been dinged by the drop in oil prices.
“Microsoft has made a strategic change,” FBR Capital Markets tech analyst Daniel Ives said.
He added that Nadella still faces challenges with a company that remains heavily reliant on the declining personal computer market.
However: “Microsoft has done the best job of trying to skate where the puck is going,” compared with other longtime tech stalwarts, such as IBM Corp, Hewlett-Packard Co and Oracle Corp, Ives said.
Apple is currently the world’s most-valuable company, with a market capitalization of more than US$668 billion. That is more than the US$616 billion that Microsoft was worth when it was No. 1 in December 1999. Microsoft shares fell sharply the next year.
However, the Redmond, Washington, company has earned greater cachet on Wall Street over the past 18 months. Its stock has risen nearly 70 percent since April last year, when activist investment firm ValueAct Capital announced it had taken a US$2 billion stake in the company and would scrutinize its strategy. Within a few months, longtime chief executive Steve Ballmer announced plans to retire. The move was described as unrelated.
Since then, Nadella has announced new initiatives to expand in cloud computing, which promises to be more lucrative than the traditional model of selling software that is installed on clients’ computers. Microsoft has also promised a redesign of its flagship Windows operating system and released versions of other popular software for smartphones and tablets, including devices made by competitor Apple.
Microsoft shares hit US$50.04 on Friday, its highest point since early 2000, before slipping to the US$49.50 range in afternoon trading.
Separately, Microsoft on Friday released a test version of Skype that lets people make Internet calls from Web browsers, eliminating the need to install special applications.
“It’s perfect if you prefer using the Web rather than an app: Perhaps you’re sitting at a computer that doesn’t already have Skype downloaded,” Microsoft said in a blog post. “Or maybe you’re on the go and using an Internet cafe or hotel computer while on vacation where you can’t download Skype at all.”
Skype for Web is to be available to a small number of existing users at first and be rolled out globally in coming months, Microsoft said.
Skype is used every day for more than 2 billion minutes of voice and video calling on the Internet, the company said.
Microsoft bought Skype in 2011 for US$8.5 billion, which allows online users to make high-quality calls to each other anywhere in the world for free. The company later built the service into Xbox One video game consoles.
Additional reporting by AFP
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