Hacker News Reader

Comment by gabrielroth | Hacker News Reader

Just a little thought experiment here: in the eyes of shareholders, which is more important at the end of each quarter -- innovation, or profit? So did the profitability of the Office division suffer from not engaging the tablet?

And yet shareholders are not, in fact, rewarding Microsoft for its consistent profitability: http://www.google.com/finance?chdnp=1&chdet=126531720000... msft&ntsp=0

View on HN

That's a link to Apple's chart, not MSFT. And MSFT has been tracking the overall market pretty closely over the past few years. It hasn't been tanking, nor booming. I'd say that's a validation of wglb's point, no? Investors don't care about anything but revenue, and revenue of a company this size tracks the economy, and thus it behaves pretty much the same as the market does.

Look closer. It's a link to a chart that compares the share prices of Apple and Microsoft over the past five years. Apple, driven by innovation, has increased by 400%. Microsoft, with its consistent profits, has remained almost perfectly flat.

This makes the previous poster's claim that investors have responded positively to Microsoft's approach look pretty weak.

MSFT has been able to maintain the stock price near $30 levels for sometime while paying dividends consistently

Dividends don't actually change the picture much. In the past five years (02/03/2005 through 02/03/2010), total shareholder return (including dividends) for AAPL was 412% whereas MSFT only returned 19%.

Well AAPL and MSFT are two different ball games. AAPL hit the jackpot with iPhone, post iPhone Apple has been a second coming of Apple, its no longer the same company for investors. For investors, due to consistent profitability and revenues, MSFT is a safer bet than Apple which reflects in the returns.

"AAPL hit the jackpot with iPhone, post iPhone Apple has been a second coming of Apple"

And before the iPhone, AAPL hit the jackpot with the iPod, post iPod Apple has been a second coming of Apple. And before the iPod, AAPL hit the jackpot with the iMac, post iMac Apple has been a second coming of Apple.

The apple price would factor in the constant innovation they bring, if this were to stop then I'd imagine they would lose a lot of value.

Reply on news.ycombinator.com