Susan

The 15 Most Cash Rich Companies

MSFT Cash is much lower than it was a few years ago. This is due to both their dividend paying and aggressive acquisitions (like AQuantive for 6B).

In addition, their growth has slowed down significantly. MSFT highly favorable ecosystem were computers costing ~$500-1000. Machines at this price range may justify a $150 OS (plus another $200+ for 'Office software'), but this ecosystem is rapidly shrinking.

Computing devices from iPhones (no Microsoft software at all) to $200 notebooks are quickly becoming "the personal computer market". MSFT can no longer charge $150 per copy of the OS when the whole machine costs $200 or less. They are forced to offer crippled versions of their OS for $50 or less per copy just to remain in the game and even so, there are a few takers. These lower ASPs are ensuring that Microsoft's best days are long gone. Cash, unfortunately will not help a company whose business model has hit a wall.

Please don't get me wrong, MSFT will keep on living for a long long time because many less informed people will keep on buying their software despite much better (including free) alternatives. But I think it is safe to assume that the nice growth and the good old golden-egged goose days are not coming back.