http://www.fool.com/investing/value/2008/01/23/microsoft-bear-argument.aspx

The article goes on to point out that their competition gets all of the critical praise -- critics don't praise MS software like Vista, but they often praise Adobe/Apple software, for example.

It's a brutally frank glance at Microsoft, but it's complete with a "rebuttal", which doesn't really rebutt.

[edit]

I should clarify: MS' financials were 'positive', but not great considering that Vista sales were supposed to help them significantly.  If you look at MS over the last 5 years, it performs well under the S&P 500.  Other companies are doing a lot better and MIcrosoft is possibly in danger of slowly losing its golden goose.  I think that's the Fool's point. 

Meh Ms needs to get it's ass in gear -_- Their OS can suck my happy areas. Frankly I'm surprised that a company highly regarded for how much money it has can put out such a shoddy product.

They have been highly regarded on Wall Street because of their financial results, not the quality of their product.  Financially, Microsoft has been a big perennial winner.  When something like that happens, it doesn't get questioned much.  It just gets supported and becomes the next big company.

For all of MS' success, it has had more failure.  It can't seem to generate a profit outside of the high margin software space, and, as they're arguing at Motley Fool, that's going away.  Microsoft is huge, and in being huge it lost its agility. It doesn't seem to be getting any serious traction with its Xbox 360, which is worrying for a company that desperately needs to diversify. 

If it could suck 'happy areas' it would sell more than.... a really popular thing that sells loads.

(I may edit this later if I think of something other than bread.)

Strange the guy would say that considering that the Entertainment and Devices Division which was a drain on the company is now making money and the warranty issues were paid for in advance last year. It's almost like his article is 6 months out of date.

If he sees problems with Microsoft with it's record revenue and profits it'll be interesting to see what he says about Sony which will likely lost many hundres of millions of dollars because of the PS3.

 The prob though ledgend is that MS's MAJOR income is from Operating systems, if and when the 360 starts to make them money, it won't be anywhere near what their OS brings in, which is declining in consumer base, hell even at PS2 sales, it woulden't be anything near what their OS did. Sony on the other hand has roots in almost every form of entertainment media, the PS3 is one of MANY aspects of their company, not a crutch. 

The 360 is making money, but nowhere near as much as losing market share on your OS. 

Have you looked at the overall health and trend for the company.  MS is not doing as well as the S&P 500, nor are they comparing well to key competitors like Apple and Sony.  They just released their OS refresh -- the first in 5 years -- so it's expected that profits would be way up.  But MS isn't doing as well as many expected (note that MS always beats 'expectations' despite not doing as well as its competitors).

He also points out that MS is losing money in various segments where they're supposed to be making money.  Including the online segment where they're hemhorraging money against competitors like Google.

The problem seems to be that MS is outmatched -- every where they have competition there are better, smarter, faster companies selling better products.  Apple, Sony, Google, Adobe.  They're all better in their respective areas than Microsoft is. This suggests that MS will move away from dominance. 

Their Windows sales are not in any danger since all the people who aren't choosing Vista are just buying XP instead. Despite the hype Macs still have almost no foothold against PCs in the actual market.

M$ will be in decline until they release their next OS, or possibly the one right after that. They made a crucial mistake by basically forcing customers to either upgrade or buy a new computer when most of them don't even need one with XP working just fine. If they make their next OSes more light weight but with powerful tools, then they'll be back on the horse as by then people will have upgraded their computers or purchased new ones and they'll be able to get the extra jump in power they needed to be capable of handling it.

Now, they might stop the decline and stagnate, but I don't see them clawing back anything they lost to Apple or Linux since they're both becoming more mainstream.

 Yah the big prob I see with  that though is that Mac's used to be within what 1% of the market? I've heard in recent reports that they're around 10% now, and with iPods, Macbooks, and iPhones of the sort making HUGE waves in our economy, I'd say word is getting around pretty quickly and recognition is startting to spread. The gap from 1 percent to 3 took forever, they gap from 3 to 10 did not. Microsoft isn't gaining any ground here. In a sense they have nowhere to go but down, and that's not good for investors, they demand growth, I feel their Entertainment devision cant sustain that.