Does Microsoft Corporation (MSFT) Think It’s Apple Inc. (AAPL)?

But Microsoft doesn’t; not at all. And it’s partially because its priorities are upside down

And that’s what leads us to this major shift. The company, quite frankly, has to let employees act and think more like those at both Google and Apple, which are less about monetization of a product segment, and more about making something innovative and amazing that consumers will love and flock to. And for both of these companies, this plan has absolutely worked. Google gives much of its consumer-facing products and services away (generating revenues from ad sales,) and still carries nearly the same net income margin as Microsoft, while growing at a much faster rate. Even if you ignore the market price reaction over the past 6 months, Apple has generated nearly $40 billion in income in the past year. That’s more than half of the total revenue that Microsoft Corporation (NASDAQ:MSFT) has generated, $76 billion, while Microsoft has focused on monetization. Which leads me to another quote from Ballmer’s email (bold mine for emphasis:)

“We are rallying behind a single strategy as one company — not a collection of divisional strategies. Although we will deliver multiple devices and services to execute and monetize the strategy, the single core strategy will drive us to set shared goals for everything we do. We will see our product line holistically, not as a set of islands.”

And this is what still concerns me about Microsoft. It may seem like some esoteric, fuzzy concept for a company to not think about profitability. And I’m sure that Apple Inc. (NASDAQ:AAPL) and Google both consider profitability before launching any product to the consumer market. However, Microsoft Corporation (NASDAQ:MSFT) tends to look at a segment first, from the perspective of monetization, and then determine whether or not, and how deep, to jump in. And it failed miserably at this with mobile a few years ago, not making a real attempt to go after this market. And this lack of foresight brings us to where we are today.

Foolish bottom line

And it’s this aspect; the inverse of Google’s and Apple Inc. (NASDAQ:AAPL)’s mentality when looking at innovative, disruptive ideas, that no level of reorganization can change. And until Microsoft demonstrates that it’s really driven by innovation and not monetization, Apple and Google will continue to be better long-term investments. And that’s from someone who owns all three.

The article Does Microsoft Think It’s Apple? originally appeared on Fool.com and is written by Jason Hall.

Jason Hall owns shares of Apple, Microsoft, and Google. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. Jason is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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