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10 Fun Facts That You Might Not Know About Microsoft

Microsoft (MSFT) was founded by Bill Gates and Paul Allen on April 4, 1975. Gates and Allen were childhood friends with a passion for computer programming. The original purpose of the company was to develop and sell BASIC interpreters for Altair 8800. In 1972, well before Microsoft, the duo founded their first company, named Traf-O-Data, which provided a computer that tracked and analyzed street traffic data.


It seems that this titan of technology has been with us forever. As with many long-lived organizations, there are interesting tidbits that are not well publicized. Below are several fun facts about Microsoft:


1. Microsoft Was Originally Hyphenated As "Micro-Soft"

As noted in an October 1995 Fortune Article by Brent Schlender, Paul Allen came up with the original name of "Micro-Soft." The name was a combination "microcomputer" and "software." By November 1976 the name lost its hyphen when "Microsoft" was officially registered as a company.


2. MS-DOS Was Not Microsoft's First Operating System

MS-DOS is the operating system that a lot of us old timers cut our teeth on. Much to the dismay of my younger colleagues, I still use the command prompt to write/run batch files. However, MS-DOS was not Microsoft's first operating system. That honor goes to Xenix.

Xenix is a discontinued version of the Unix operating system. It was originally licensed from AT&T (T) in the late 1970s. The Santa Cruz Operation (SCO) later acquired exclusive rights to the software. It was eventually replaced it by SCO UNIX. MS-DOS was not developed in-house. Microsoft licensed 86-DOS from Seattle Computer Products and then later renamed it to the familiar MS-DOS.


3. Windows Was Originally Named Interface Manager

Windows 1.0 was released on November 20, 1985. However if you step back a few years to the 1983 Comdex Microsoft previewed Windows as Microsoft Interface Manager. Two lessons were learned here: 1. Engineers should never name products, 2. Contrary to popular belief, marketing types can add value. Could you imagine having to say "My Microsoft Interface Manager has crashed again," several times a day?


4. It Took Microsoft 23 Years To Drop The Ball

Most younger people look at Apple (AAPL) as a company that executes flawlessly. However there was a time where Apple continuously tripped over itself while Microsoft roared like an exotic sports car. In 1986 Microsoft went public. It took 23 years after that before Microsoft reported its first-ever drop in revenues.


5. =rand(200,99)

When you type “=rand(200,99)” into Microsoft Word it converts it to ‘The quick brown fox jumps over the lazy dog.’ This sentence contains all 26 letters of the alphabet.


6. Office Was First Released On Apple's Macintosh

Microsoft released Mac versions of Word 1.0 in 1984, the first year of the Macintosh computer. Then Excel 1.0 in 1985 and PowerPoint 1.0 in 1987. In 1989 Microsoft Office for use on Macintosh was released before being launched for the Windows platform in November 1990.


7. Windows First Virus

The first Windows virus, WinVer 1.4 was released in 1992. Since then Windows has seen an untold number of virus released for it and life will never be the same again.


8. Dividend Early Adopter

Microsoft was one of the first large tech companies to pay its shareholders a cash dividend. Microsoft paid its first dividend on March 7, 2003. Before Microsoft, Intel (INTC) paid its first cash dividend back in 1992. With the addition of other tech majors paying a dividend such as Oracle (ORCL) in 2009, Cisco (CSCO) in 2011, Apple (AAPL) resuming its dividend in 2012, virtually all the large tech companies are now paying a dividend. Noticeably missing from the list is Google (GOOG).


9. Deep Pockets Can Overcome Major Mistakes

Over the years Microsoft has made some very questionable decisions. Strong cash flow and persistence has been the ticket for overcoming lapses in judgment. Some of the more notable include: An agreement to buy Nokia's mobile unit for $7 billion on September 3, 2013, Surface RT tablet released on October 26, 2012, Windows 8 release on September 4, 2012 with a new "metro" design and no start button, Windows Vista, released in January 2007, was probably a bigger failure than Windows 8, the 2006 Zune release was no answer to Apple's iPod. You get the idea.


10. Microsoft Reinvented Itself

When it looked like phones and tablets would totally displace traditional computers, Microsoft made a bold move and bet on the cloud. From all appearances it looks like they won the bet. On October 14, 2011 I opened my position in Microsoft at $27.11 and put out a strong buy recommendation. I aggressively bought until April 2015. The stock is now trading over $100 per share. I guess you can teach an old dog a new trick.

Full Disclosure: Long MSFT, CSCO, AAPL, T. See a list of all my Dividend Growth Portfolio holdings here.

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