What’s Next for Microsoft? Maybe Foursquare

by Alyssa Oursler | August 30, 2013 11:16 am

What’s Next for Microsoft? Maybe Foursquare

In the wake of Steve Ballmer’s announcement that he will step down within the next year[1], the future of Microsoft (MSFT[2]) is anything but certain.

But one possible focus could be social.

Rumors are floating around that Microsoft is in talks to invest in Foursquare — the social media app that lets users “check in” to places. And the investment could have its advantages, according to Bloomberg[3]:

“A stake in Foursquare would give Microsoft, the world’s largest software maker, a bigger role in social media and mobile, areas where it has lagged behind competitors such as Apple Inc. (AAPL[4]). Microsoft has previously put money into other startups, notably with a 2007 investment in Facebook Inc. (FB[5]). That has grown in value and helped unite the software makers against their common foe, Google Inc. (GOOG[6]).”

But Microsoft isn’t the only one with an eye on the growing company. According to Bloomberg, Foursquare’s appeal has increased in the wake of a successful new advertising approach, and American Express (AXP[7]) is reportedly competing for a bid. The social media site would allow the credit-card company to improve its marketing and loyalty programs.

Of course, Microsoft and Foursquare already have history. While many developers hesitated to develop apps[8] for the software giant’s Windows 8 operating system, Foursquare didn’t.

Still, investors obviously would be warned against betting on Microsoft based on its potential social strategy.

Speculation is already rampant about the tech giant’s future — who will lead it, for instance, or what it should do next. InvestorPlace‘s Brad Moon weighed in on three possible successors[9]: Stephen Sinofsky, Bill Gates and Nokia (NOK[10]) CEO Stephen Elop — aruging Elop seems the most plausible. But regardless of who is doing the leading, writers at Businessweek[11] think Microsoft’s future will lie in focusing on fewer products, while making them better.

If that’s really the recipe for success, adding Foursquare to the mix wouldn’t make much sense.

Regardless, MSFT and Foursquare are only in talks; no formal investment has been made. So we can add Foursquare to the ever-growing “wait and see” column for Microsoft.

As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.

Endnotes:
  1. step down within the next year: http://investorplace.com/2013/08/steve-ballmer-stepping-down-at-microsoft/
  2. MSFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSFT
  3. according to Bloomberg: http://www.bloomberg.com/news/2013-08-29/microsoft-is-said-to-be-in-talks-to-invest-in-foursquare.html
  4. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  5. FB: http://studio-5.financialcontent.com/investplace/quote?Symbol=FB
  6. GOOG: http://studio-5.financialcontent.com/investplace/quote?Symbol=GOOG
  7. AXP: http://studio-5.financialcontent.com/investplace/quote?Symbol=AXP
  8. hesitated to develop apps: http://investorplace.com/2013/03/microsoft-still-struggling-with-app-shortage/
  9. weighed in on three possible successors: http://investorplace.com/2013/08/3-steve-ballmer-microsoft-ceo-replacements/
  10. NOK: http://studio-5.financialcontent.com/investplace/quote?Symbol=NOK
  11. writers at Businessweek: http://www.businessweek.com/articles/2013-08-29/post-ballmer-microsoft-must-focus-on-products-to-avoid-extinction#p1

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