Search: Will It Deliver For Microsoft?

| About: Microsoft Corporation (MSFT)

There has been a lot of discussion and speculation about Microsoft's (NASDAQ:MSFT) recent partnerships and investments to strengthen its mobile and social search capabilities and, ultimately, its bottom line. First came Mimvi's (MIMV.OB) announcement a few weeks back that Microsoft had partnered and invested in Mimvi to develop complementary search and recommendation tools for Windows Mobile 8 and Windows Azure platforms. Next came Microsoft's investment in Klout, a social media reputation service that works with several social networks. Microsoft has already started to integrate Klout data into Bing search results. This investment and partnership with Klout shows Microsoft's commitment to enhancing Bing, particularly in the social search area.

Meanwhile Mimvi's partnership and investment deal with Microsoft is aimed at developing a number of products and services to complement Microsoft's Windows Azure and Windows Mobile 8 platforms. The agreement also involves Microsoft making investments in Mimvi in the form of engineering services, software and cash.

Things have been pretty quiet on this front since the announcement, which apparently hasn't been sitting well with short-term investors. So I decided to do a bit of snooping around and found several job listings on Mimvi's website requesting engineers with "Bing (Bing-powered Yahoo or Facebook) Search Results Integration" skill sets. "Currently," it continued, "we are looking for candidates that have experience in working with large search engines preferably Bing (or Bing-powered Yahoo or Facebook). Experience in integrating and combining search results into large scale consumer facing search interfaces. Experience scaling to hundreds of millions of users across geographies is important to have." It went on to state that Mimvi is "in the process of migrating thousands of Apple iOS and Google Android apps to the Windows 8 mobile platform." Of equal significance, the listing states "Mimvi is currently working closely with Microsoft in relation to releasing mobile apps that utilize the Windows Azure cloud services platform. "

These statements lead me to believe the partnership with Microsoft is going full bore ahead and Mimvi is already looking to substantially enhance its engineering resources to deliver on the stated goals of the arrangement. These developments also reveal that Mimvi's cash flow is sufficient to fund the substantial salaries of several highly skilled and specialized engineers. It is not clear whether these funds have come directly from Microsoft's investment in the company or from pre-existing reserves, But it is clear that Mimvi is strengthening its team to fully implement its requirements and grow its partnership with Microsoft. A partnership designed to rapidly develop software critical to Microsoft's mission to improve its mobile search capabilities and mobile app arsenal.


Microsoft's recent partnerships and investments in Klout and Mimvi bode well for the future of its social and mobile search capabilities. As a result of these moves, I consider Microsoft a good buy at its current valuation. Mimvi must be considered a great value at its current price of $0.33 and total market cap of $16.8 M. I believe its partnership and investment deal with Microsoft will take on a strategic importance over the coming weeks and months for both parties.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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