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Introduction (History)
Microsoft is a multinational computer technology corporation. The history of Microsoft began on April 4, 1975 and is headquartered in Redmond, Washington, when it was founded by Bill Gates and Paul Allen in Albuquerque. Its current best-selling products are the Microsoft Windows operating system and the Microsoft Office suite of productivity software. Starting in 1980, Microsoft formed an important partnership with IBM that allowed them to bundle Microsoft's operating system with computers that they sold, paying Microsoft a royalty for every sale. In 1985, IBM requested that Microsoft write a new operating system for their computers called OS/2; Microsoft wrote the operating system, but also continued to sell their own alternative, which proved to be in direct competition with OS/2. Microsoft Windows eventually overshadowed OS/2 in terms of sales. When Microsoft launched several versions of Microsoft Windows in the 1990s, they had captured over 90% market share of the world's personal computers. The company has now become largely successful. As of 2008, Microsoft has global annual revenue of US$ 60.42 billion and nearly 90,000 employees in 105 countries. It develops, manufactures, licenses, and supports a wide range of software products for computing devices. Microsoft has acquired 128 companies, purchased stakes in 60 companies, and made 24 divestments. Of the companies that Microsoft has acquired, 99 were based in the United States. Microsoft's first acquisition was Forethought on June 29, 1987, which was founded in 1983 and developed a presentation program that would later be known as Microsoft PowerPoint. Till now Microsofts last acquisition is in 10 December 2009, the Company acquired Opalis Software Inc and Sentillion Inc.
Provide a structure through which management and the Board set objectives and monitor performance. Strengthen and safeguard their culture of business integrity and responsible business practices. Encourage the efficient use of resources, and to require accountability for stewardship of those resources.
Service/Product
Microsoft Corporation, incorporated in 1981, is engaged in developing, manufacturing, licensing and supporting a range of software products and services for different types of computing devices. The Companys software products and services include operating systems for personal computers, servers and intelligent devices; server applications for distributed computing environments; information worker productivity applications; business solutions applications; computing applications; software development tools, and video games. It operates in five segments:
Windows & Windows Live Division: Includes the Windows product family and is responsible for our relationships with personal computer manufacturers as well as online software and services through Windows Live.
Server and Tools: Software server products, services and solutions, including: Windows Server operating system, Microsoft SQL Server, Visual Studio, Silverlight, System Center products, Forefront security products, Biz Talk Server, and Microsoft Consulting Services.
Online Services Division: Consists of an online advertising platform with offerings for publishers and advertisers, and online information offerings such as Bing and the MSN portals and channels.
Microsoft Business Division: Includes the Microsoft Office suites, desktop programs, servers, and services and solutions; Microsoft Dynamics; and Unified Communications business solutions.
Entertainment and Devices Division: Consists of the Xbox video game system, including
consoles and accessories, Xbox Live operations, Zune digital music and entertainment device; Mediaroom, mobile and embedded device platforms, Surface computing platform, and Windows Automotive.
Industry analysis
Stock Data:
Recent Stock Performance: 1 Week 3.3% -9.5% 13 Weeks -3.5% 52 Weeks -13.6%
25.62 4 Weeks
Microsoft Corporation Key Data: Ticker: Exchanges: MSFT NAS FRA HKG MXK LIM Country: Major Industry: Sub Industry: 61,989,000,000 (Year Ending Jan 2011). U.S. Dollars June Common UNITED STATES Electronics Systems & Subsystems
2010 Sales
Employees:
89,000
Company Microsoft Corporation Oracle Corp. SAP AG Adobe Systems Inc. Salesforce.com Intuit Inc.
Abbreviation Guide:
MSFT CRM VTAL STV QADA AMAP = Microsoft Corporation = Salesforce.com Inc = Vital Images, Inc = China Digital TV Holding Co. Ltd. = QAD Inc. = AutoNavi Holdings Limited.
Key Statistics
Data provided by Capital IQ, except where noted.
Valuation Measures
Market Cap (intraday)5: Enterprise Value (Mar 31, 2011)3: Trailing P/E (ttm, intraday): Forward P/E (fye Jun 30, 2012)1: PEG Ratio (5 yr expected)1: Price/Sales (ttm): Price/Book (mrq): Enterprise Value/Revenue (ttm)3: Enterprise Value/EBITDA (ttm)3: 213.34B 184.30B 10.84 9.20 0.98 3.23 4.44 2.76 6.23
Financial Highlights
Fiscal Year Fiscal Year Ends: Most Recent Quarter (mrq): Jun 30 Dec 31, 2010
Management Effectiveness Return on Assets (ttm): Return on Equity (ttm): 19.34% 44.35%
Income Statement Revenue (ttm): Revenue Per Share (ttm): Qtrly Revenue Growth (yoy): Gross Profit (ttm): EBITDA (ttm): Net Income Avl to Common (ttm): Diluted EPS (ttm): Qtrly Earnings Growth (yoy): 66.69B 7.71 4.90% 50.09B 29.58B 20.57B 2.34 -0.40%
Balance Sheet Total Cash (mrq): Total Cash Per Share (mrq): Total Debt (mrq): Total Debt/Equity (mrq): Current Ratio (mrq): Book Value Per Share (mrq): 39.98B 4.76 9.68B 19.96 2.46 5.77
Cash Flow Statement Operating Cash Flow (ttm): Levered Free Cash Flow (ttm): 25.38B 17.55B
Trading Information
Stock Price History Beta: 52-Week Change3: S&P500 52-Week Change3: 52-Week High (Apr 23, 2010)3: 52-Week Low (Jul 1, 2010)3: 50-Day Moving Average3: 200-Day Moving Average3: 0.95 -12.56% 13.58% 31.58 22.73 26.17 26.49
Share Statistics Avg Vol (3 month)3: Avg Vol (10 day)3: Shares Outstanding5: Float: % Held by Insiders6: % Held by Institutions6: Shares Short (as of Feb 28, 2011)3: Short Ratio (as of Feb 28, 2011)3: Short % of Float (as of Feb 28, 2011)3: Shares Short (prior month)3: 59,822,000 43,650,600 8.40B 7.41B 12.01% 64.70% 86.23M 1.40 1.10% 87.86M
Dividends & Splits Forward Annual Dividend Rate4: Forward Annual Dividend Yield4: Trailing Annual Dividend Yield3: Trailing Annual Dividend Yield3: 5 Year Average Dividend Yield4: Payout Ratio4: Dividend Date3: Ex-Dividend Date4: Last Split Factor (new per old)2: Last Split Date3: 0.64 2.50% 0.58 2.30% 1.80% 23.00% Jun 8, 2011 May 17, 2011 2:1 Feb 18, 2003
Abbreviation Guide:
K = Thousands; M = Millions; B = Billions mrq = Most Recent Quarter (as of Dec 31, 2010) ttm = Trailing Twelve Months (as of Dec 31, 2010) yoy = Year Over Year (as of Dec 31, 2010) lfy = Last Fiscal Year (as of Jun 30, 2010) fye = Fiscal Year Ending 1 Data provided by Thomson 2 Data provided by EDGAR Online 3 Data derived from multiple sources or calculated by Yahoo! Finance 4 Data provided by Morningstar, Inc. 5 Shares outstanding is taken from the most recently filed quarterly or annual report and Market Cap is calculated using shares outstanding. 6 Data provided by Computershare Currency in USD.
Analyst Estimates
Earnings Estimated Avg. Estimate No. of Analysts Low Estimate High Estimate Year Ago EPS
Revenue Estimated Avg. Estimate No. of Analysts Low Estimate High Estimate Year Ago Sales Sales Growth (year/est)
Mar 10
Jun 10
Sep 10
Dec 10
EPS Trends Current Estimate 7 Days Ago 30 Days Ago 60 Days Ago 90 Days Ago
EPS Revisions Up Last 7 Days Up Last 30 Days Down Last 30 Days Down Last 90 Days 0 0 0 N/A 0 1 0 N/A 0 0 0 N/A 1 1 0 N/A
Growth Estimated Current Qtr. Next Qtr. This Year Next Year Past 5 Years (per annum) Next 5 Years (per annum) Price/Earnings (avg. for comparison categories) PEG Ratio (avg. for comparison categories)
Currency in USD.
MSFT
Industry
Sector
S&P 500
0.98
1.29
1.36
1.20
Major Holders
Breakdown % of Shares Held by All Insider and 5% Owners: % of Shares Held by Institutional & Mutual Fund Owners: % of Float Held by Institutional & Mutual Fund Owners: Number of Institutions Holding Shares: 12% 65% 74% 1771
Major Direct Holders Holder GATES WILLIAM H III BALLMER STEVEN A MARQUARDT DAVID F OZZIE RAYMOND E SINOFSKY STEVEN J Shares 580,976,087 333,252,990 1,180,243 998,739 737,951 Reported Feb 15, 2011 Nov 23, 2010 Feb 15, 2011 Nov 18, 2009 Jan 27, 2011
Top Institutional Holders Holder Capital Research Global Investors VANGUARD GROUP, INC. (THE) BlackRock Institutional Trust Company, N.A. Capital World Investors JP MORGAN CHASE & COMPANY Bank of New York Mellon Corporation NORTHERN TRUST CORPORATION FRANKLIN RESOURCES, INC Invesco Ltd. GOLDMAN SACHS GROUP INC Shares 306,154,198 286,630,111 202,049,526 174,408,700 141,270,955 115,986,472 99,657,062 90,767,250 89,260,254 87,226,881 % Out 3.64 3.41 2.40 2.08 1.68 1.38 1.19 1.08 1.06 1.04 Value* 8,544,763,666 7,999,846,398 5,639,202,270 4,867,746,817 3,942,872,354 3,237,182,433 2,781,428,600 2,533,313,947 2,491,253,689 2,434,502,248 Reported Dec 31, 2010 Dec 31, 2010 Dec 31, 2010 Dec 31, 2010 Dec 31, 2010 Dec 31, 2010 Dec 31, 2010 Dec 31, 2010 Dec 31, 2010 Dec 31, 2010
Top Mutual Fund Holders Holder GROWTH FUND OF AMERICA INC INVESTMENT COMPANY OF AMERICA VANGUARD TOTAL STOCK MARKET INDEX FUND VANGUARD 500 INDEX FUND CAPITAL WORLD GROWTH AND INCOME FUND VANGUARD INSTITUTIONAL INDEX FUND-INSTITUTIONAL INDEX FD SPDR S&P 500 ETF Trust COLLEGE RETIREMENT EQUITIES FUNDSTOCK ACCOUNT VANGUARD/WINDSOR II Powershares Exhg Traded Fd TrPowershares QQQ Tr, Series 1 Shares 127,840,100 88,265,800 82,156,540 67,413,857 67,005,000 % Out 1.52 1.05 0.98 0.80 0.80 Value* 3,568,017,191 2,463,498,478 2,292,989,031 1,881,520,748 1,870,109,550 Reported Dec 31, 2010 Dec 31, 2010 Dec 31, 2010 Dec 31, 2010 Dec 31, 2010
Dec 31, 2010 Sep 30, 2010 Sep 30, 2010 Oct 31, 2010 Sep 30, 2010
Value shown is computed using the security's price on the report date given. Currency in USD.
Insider Transactions
Insider Purchases - Last 6 Months Shares Purchases Sales Net Shares Purchased (Sold) Total Insider Shares Held % Net Shares Purchased (Sold) N/A 62,875,300 (62,875,300) 1.01B (5.9%) Trans 0 40 40 N/A N/A
Net Institutional Purchases - Prior Qtr to Latest Qtr Shares Net Shares Purchased (Sold) % Change in Institutional Shares Held (90,881,100) (1.7%)
Competitor analysis
Top Microsoft Corporation Competitors
Development Tools, Operating Systems & Utilities Software Computer Hardware Computer Peripherals Computer Input Devices & Speakers Computer Services Information Technology Services
Competitors
Direct Competitor Comparison MSFT Market Cap: Employees: Qtrly Rev Growth (yoy): Revenue (ttm): Gross Margin (ttm): EBITDA (ttm): Operating Margin (ttm): Net Income (ttm): EPS (ttm): P/E (ttm): PEG (5 yr expected): P/S (ttm): 214.01B 89,000 4.90% 66.69B 79.16% 29.58B 40.45% 20.57B 2.34 10.87 0.98 3.23 AAPL 321.38B 46,600 70.50% 76.28B 38.77% 22.61B 28.17% 16.64B 17.92 19.46 0.74 4.21 GOOG 188.49B 24,400 26.50% 29.32B 64.47% 11.78B 35.41% 8.50B 26.31 22.28 0.92 6.38 ORCL 168.47B 105,000 46.50% 31.99B 75.38% 12.63B 34.00% 6.78B 1.33 25.07 1.03 5.22 Industry N/A N/A 0.00% N/A 0.00% N/A 0.00% N/A N/A N/A N/A N/A
Abbreviation Guide:
AAPL = Apple Inc. GOOG = Google Inc. ORCL = Oracle Corp. Industry = Application Software
Software Companies Ranked By Sales Company Microsoft Corporation Oracle Corp. SAP AG CA Technologies Symbol MSFT ORCL SAP CA Price 25.47 33.35 61.42 24.01 Change -0.55% 0.89% 0.07% 0.63% Market Cap 214.01B 168.47B 72.91B 12.25B P/E 10.87 25.07 28.69 16.74
SOWT analysis
Some of the key issues facing Microsoft as it aim to maintain past successes include the following.
Synergies
In the past, Microsoft has been extremely successful in developing new products by promoting, or bundling, them with existing brands. The Windows operating system is perhaps the best example of this, where applications such as Internet Explorer and Media Player have become industry benchmarks due to their out of the box availability. By exploiting the monopoly power it has on PC operating software, it is in a position to influence the success of strategic areas of future performance. In an industry where the battleground for future dominance in the technology industry is likely to be aggressively fought, as companies increasingly move towards wholly integrated media devices, the strategic advantage of such a means cannot be overstated.
Legal Lawsuits
Due to an observed monopoly Microsoft enjoys in the home PC market, it could be considered inevitable that competitors will seek to undermine or diminish this power though legal means. It is, however, stated in Microsofts 2004 annual report that major progress has been made to stem legal action and improve relations with governments. Nevertheless, the threat of lawsuits remains one of the greatest threats to Microsofts current monopoly of its market position. Current examples:
The emergence of online global brands has led to strong competition, particularly within the media market, a developing Microsoft market according to Hoover (2005). Google and others are increasingly bringing a greater range of products to the market, many of which directly compete with Microsofts own product portfolios. What perhaps differentiates Microsoft from many of its more traditional competitors such as IBM is its globalised nature. Anholt (2000), as cited by Fill (2002) suggests that by using technology in place of more traditional physical distribution channels Microsoft was able to negate the inefficiencies associated with the latter. Upcoming online brands, on the other hand, do not suffer the same traditional barriers, and may in time create better conditions to compete effectively with Microsoft.
Discontinued Operations Total Operations Total Net Income Net Profit Margin Diluted EPS from Total Net Income Dividends per Share
Other Noncurrent Liabilities Total Liabilities Shareholder's Equity Preferred Stock Equity Common Stock Equity Total Equity Shares Outstanding (thou.)
8,852.0 39,938.0
7,550.0 38,330.0
6,621.0 36,507.0
Jun 10 Net Operating Cash Flow Net Investing Cash Flow Net Financing Cash Flow Net Change in Cash Depreciation & Amortization Capital Expenditures Cash Dividends Paid 24,073 (11,314.0) (13,291.0) (571.0) 2,673.0 (1,977.0) (4,578.0)
Income Statement
All numbers in thousands Period Ending
Total Revenue Cost of Revenue Gross Profit Operating Expenses Research Development Selling General and Administrative Non Recurring Others Total Operating Expenses Operating Income or Loss Income from Continuing Operations Total Other Income/Expenses Net Earnings Before Interest And Taxes Interest Expense Income Before Tax Income Tax Expense Minority Interest Net Income From Continuing Ops Non-recurring Events Discontinued Operations
Extraordinary Items Effect Of Accounting Changes Other Items Net Income Preferred Stock And Other Adjustments Net Income Applicable To Common Shares
18,760,000 18,760,000
14,569,000 14,569,000
17,681,000 17,681,000
Currency in USD.
Balance Sheet
All numbers in thousands Period Ending
Assets Current Assets Cash And Cash Equivalents Short Term Investments Net Receivables Inventory Other Current Assets Total Current Assets Long Term Investments Property Plant and Equipment Goodwill Intangible Assets 5,505,000 31,283,000 15,198,000 740,000 2,950,000 55,676,000 7,754,000 7,630,000 12,394,000 1,158,000 6,076,000 25,371,000 13,405,000 717,000 3,711,000 49,280,000 4,933,000 7,535,000 12,503,000 1,759,000 10,339,000 13,323,000 15,606,000 985,000 2,989,000 43,242,000 6,588,000 6,242,000 12,108,000 1,973,000
Accumulated Amortization Other Assets Deferred Long Term Asset Charges Total Assets Liabilities Current Liabilities Accounts Payable Short/Current Long Term Debt Other Current Liabilities Total Current Liabilities Long Term Debt Other Liabilities Deferred Long Term Liability Charges Minority Interest Negative Goodwill Total Liabilities Stockholders' Equity Misc Stocks Options Warrants Redeemable Preferred Stock Preferred Stock Common Stock Retained Earnings Treasury Stock Capital Surplus Other Stockholder Equity
1,501,000 86,113,000
62,856,000 (16,681,000) -
62,382,000 (22,824,000) -
62,849,000 (26,563,000) -
46,175,000 32,623,000
39,558,000 25,296,000
36,286,000 22,205,000
Currency in USD.
Cash Flow
All numbers in thousands Period Ending
Net Income Operating Activities, Cash Flows Provided By or Used In Depreciation Adjustments To Net Income Changes In Accounts Receivables Changes In Liabilities Changes In Inventories Changes In Other Operating Activities Total Cash Flow From Operating Activities Investing Activities, Cash Flows Provided By or Used In Capital Expenditures Investments Other Cash flows from Investing Activities Total Cash Flows From Investing Activities Financing Activities, Cash Flows Provided By or Used In
Dividends Paid Sale Purchase of Stock Net Borrowings Other Cash Flows from Financing Activities Total Cash Flows From Financing Activities Effect Of Exchange Rate Changes Change In Cash and Cash Equivalents
Currency in USD.
Current Event/News
Cloud Friendly' US Cities Microsoft interviewed more than 2,000 IT decision-makers in 10 U.S. cities. The survey indicates that cloud computing is helping to create new businesses and jobs in each city. New Innovations in IT Support Environmental Sustainability in Africa
This piece of cutting-edge technology illustrates how it is possible to create sustainable 21st century work environments, and is at the center of Microsofts green IT strategy. And implementing green IT policies like the highly efficient ITPAC data center is not only ensuring the buildings energy neutrality, but also demonstrating the crucial role that technology can play in environmental sustainability. The ITPAC technology uses fans to create negative pressure, drawing outside air through the container to cool equipment. As a result, the technology dramatically reduces typical data center carbon footprint and the consumption of materials such as water, concrete, steel, piping and copper, along with the additional carbon footprint associated with the packaging and transporting of servers, equipment and supplies.
.
The building is the first of its kind for the UN in Africa and is a global showcase of sustainable design and technology
Microsoft Reports Record $0.77 Earnings Per Share in Second Quarter Microsoft announced it has now sold over 300 million Windows 7 licenses, and Windows 7 is now running on over 20% of Internet-connected PCs. Windows Phone 7 launched during the quarter in 30 countries and on 60 operators and nine different devices. Microsoft announced developers are adding Windows Phone 7 applications to the marketplace at a rate of over 100 per day. Bing completed the integration of Yahoo! search in the U.S. and Canada and continues to gain share. Windows Azure developer momentum continued this quarter, with Pixar Animation Studios, ADP with NVoicePay and others demonstrating compelling uses of the platform. Internet Explorer 9 is Microsofts fastest downloaded beta browser of all time with over 20 million downloads to date. At International CES 2011 in early January, Microsoft announced that the next version of Windows will support System on Chip architectures. The company announced that during the quarter, it bought back $5 billion in stock and declared $1.3 billion in dividends.
HR (Org chart)
The company is run by a board of directors made up of mostly company outsiders, as is customary for publicly traded companies. Members of the board of directors as of June 2010 are: Steve Ballmer, Dina Dublon, Bill Gates (chairman), Raymond Gilmartin, Reed Hastings, Maria Klawe, David Marquardt, Charles Noski, and Helmut Panke. Board members are elected every year at the annual shareholders' meeting using a majority vote system. There are five committees within the board which oversee more specific matters. These committees include:
The Antitrust Compliance Committee, which attempts to prevent company practices from violating antitrust laws. The Audit Committee, which handles accounting issues with the company including auditing and reporting; The Compensation Committee, which approves compensation for the CEO and other employees of the company;
The Finance Committee, which handles financial matters such as proposing mergers and acquisitions; The Governance and Nominating Committee, which handles various corporate matters including nomination of the board;
Each committee performs its duties as assigned by the Board in compliance with Microsoft's Bylaws and its charter.
Director Independent Ms. Dublon Mr. Gilmartin Mr. Hastings Dr. Klawe Mr. Marquardt Mr. Noski Dr. Panke Non-Independent Mr. Gates Mr. Ballmer
Antitrust Compliance
Audit
Compensation
Finance
M M M C M
C M M M C C M M
Marketing (4ps)
Microsoft Business Division ("MBD") develops and markets software and services designed to increase personal, team, and organization productivity. MBD offerings include the Microsoft Office system (comprising mainly Office, SharePoint, Exchange and Lync), which generates over 90% of MBD revenue, and Microsoft Dynamics business solutions. We evaluate MBD results based upon the nature of the end user in two primary parts: business revenue, which includes Microsoft Office system revenue generated through volume licensing agreements and Microsoft Dynamics revenue; and consumer revenue, which includes revenue from retail packaged product sales and OEM revenue.
Global macroeconomic factors have a strong correlation to demand for their software, services, hardware, and online offerings. The current macroeconomic factors remain dynamic and uncertain. Irrespective of global economic conditions, they are positive about their relative market position, our current product portfolio, and future product pipeline. Because they offer a wide range of products and services that enable companies to improve productivity and reduce costs, including cloud-based services, they believe that Microsoft is well-positioned to create new opportunities to increase revenue as the global economy improves. They remain focused on executing in the areas we can control by continuing to provide high value products at the lowest total cost of ownership while managing our expenses.
1. Product:
Product refers to the goods and services that firms offer to their customers. Firms must place sufficient importance to the product/service as well as the other aspects associated with the product that attract customer attention. At Microsoft, the product is the full bundle of goods and services offered including software and after sales service. Product characteristics include the functionality, appearance, and support customers receive when Microsoft products are purchased. Product also includes the unique features, functions, and characteristics of Microsoft software that are not available from its competitors' products. It is important that Microsoft be able to continue to distinguish and differentiate its products from the competition. To that end, during fiscal years 2001, 2002, and 2003, research and development expenses were a staggering $4.38 billion, $4.31 billion, and $4.66 billion, respectively. Those amounts represented 17.3%, 15.2%, and 14.5%, respectively, of revenue in each of those years. Most of Microsoft's products are developed internally, but the company also purchases new technology, licenses intellectual property rights, and oversees third-party development of certain products. Microsoft's products include scalable operating systems for servers, personal computers, and intelligent devices; server applications
2. Price:
Price refers to the cost of a particular product or service. Price plays an important role in customers buying decision. As far as price is concern Microsoft has global annual revenue of US$ 60.42 billion. Their product price helps them to achieve such huge revenue. Segmenting the huge customers and valuing their demands and requirements Microsoft has a stack of different product offering different price. Their price diversification leads their products to capture the global market.
3. Place:
Place refers to the distribution channels used to get a firms products from the manufacturer/service provider to the end customers. Place is also known as channel, distribution, or intermediary. Microsoft has nearly 90,000 employees in 105 countries to distribute, sell, promotion and providing services to the valued customers.
4. Promotion:
Promotion refers to the awareness created of the introduction of a new product and availability of an already existing product by means of advertising and selling activities. The main objective of promotion is to make customers aware of product features, its uses and benefits. Microsoft invests a lot to promote their products globally in different countries in different languages. To do so they provide lots of information regarding the new products and existing products. For example they provide all necessary information about their products through their websites and webcasts. Today, with the increase in competition and with a wider variety of products and markets, other Ps of marketing mix are proposed by a number of researchers.
Conclusions
As the technology market evolves, it could be speculated that the successful companies within the industry will be the ones that are able to best suit the changing needs of consumers. If the upcoming trend towards technological integration of media products predicted by Microsoft and others does occur, the company is seemingly well placed to do this. The many analyzed strengths of Microsoft detailed in this essay appear to be particularly pertinent to the evolution of the markets needs. The company appears to have sensibly accepted the role of integrating competing products within its own products, which may in future assist it in maintaining its position from a legal perspective. Adaptability in the market place, as it has been in the past, may prove to be decisive as competition from Google and other online brands strengthens.