Microsoft should split the core business

Computer Store News: Recently, Forbes conducted an interesting interview with Paul Jafari, the manager of the investment bank that helped Microsoft co-founder Paul Allen manage his personal assets and held Microsoft shares. Paul Ghaffari). The main content discussed during the interview is what Microsoft's next CEO should do. Jaafari said that both the investment bank and Allen themselves believe that Microsoft should spin off on its own.

Jaafari said at the Financial Times Investment Management Summit: "Microsoft's next CEO should consider splitting consumer businesses, including search advertising and Xbox games." . ”

Allen founded Microsoft in 1975 with Gates, who still holds $2 billion worth of Microsoft shares. Jaafari said that Allen is very concerned about the upcoming changes in Microsoft.

Jaafari said that most of Microsoft's profits are obtained by selling software and services to corporate users. Search business and even Xbox are dragging down Microsoft's overall performance, he hopes that Microsoft can focus on the most competitive products and services.

Jaafari said: "I think that Microsoft should probably split up a lot of business, or simply shut it down, and then focus on enterprise users and cloud business. ”

It doesn't make sense to keep a company permanently, it should also open up new business. A company is only a carrier for creating more wealth for shareholders. Therefore, the management of the company should put the interests of shareholders first, always thinking about the interests of shareholders, not the interests of the company itself. This means that every product and even every business must be considered in the overall situation, and measured by the criteria that can create value for shareholders.

For a company like Microsoft, Office, Windows, and enterprise solutions still cost a lot of cash, and it is expected that this phenomenon will continue for a long time. This creates a situation in which the company may adopt two different strategies. The first strategy is to reinvest cash into the already completed business and products. The second strategy is to hand over the right to use cash to shareholders. Decide how to use cash. But management's decision should be based on which of these two strategies can create more value for shareholders.

Therefore, Allen proposes to abandon those non-core businesses and products, focusing on core business.