More Trouble For Vista (MSFT)

Microsoft has had a resurgence of sorts. The stock trades near $30, up from a 52-week low of $21.46. There is excitement in some quarters that Xbox has gained enough traction to challenge Sony’s Playstation franchise. While the Zune is not a huge success, it is evidence that Microsoft intends to seek share in the consumer electronics markets. MSFT is even saying it will be more aggressive in promoting advertising at its MSN franchise.

But, Vista has to sell well. Without OS licensing revenue, Micosoft might as well be a stripped down version of IAC/Interactive, Barry’s Diller’s largely failed attempt to be a front line internet sucess.

And, Vista is beginning to show cracks, even in early release. Several serious bugs have been reported including one in the browser that could allow "rogue software" into PCs.

Since Microsoft has said that Vista is more secure than its predecessors, the news could be a disaster in  the making.

The news could be equally bad for the IT industry. Research firm IDC estimates that Vista will produce $70 in revenue in the tech sector during 2007.

If Vista has serious flaw, take a lot of the economic benefit away, along with a number of dollar off MSFT’s stock.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.