This is a brief post but I just saw some stats that were interesting about Microsoft.
Using standard valuation metrics the company has an overall enterprise value of $399.3 billion. This estimate implies a fair-value share price of about $47 — Microsoft shares closed Friday at $25.30.
Microsoft’s Business Division, accounts for more than half the company’s total enterprise value. This is the business unit responsible for Office and Dynamics.
The Windows unit accounts for more than a quarter. The Server and Tools segment adds 14%.
Everything else — the Xbox gaming platform, the Bing search engine, MSN, Windows Phone — contributes negligibly to Microsoft’s value.
I got these stats from an LA Times article I read. I actually thought Windows business unit would be doing a lot more than 25% of revenue. Whenever you hear about almost 500 million licenses of Windows 7, it just seemed like it would be a much bigger share than 25%.
Interesting that Office and Dynamics are so important. That raises some interesting questions. How will Windows 8 impact businesses?
Stay tuned for more analysis of that question here…