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Office for iPad rumors give Microsoft's stock a boost

Microsoft's stock is at levels not seen since 2000. Is this all because of the impending Office for iPad or is it because of a host of profound changes taking place at the software giant?

The expected arrival of Microsoft Office on the iPad is one of a number of reasons Microsoft's share price is on the rise.
The expected arrival of Microsoft Office on the iPad is one of a number of reasons Microsoft's share price is on the rise. Microsoft

Microsoft's share price hit levels Tuesday not seen since the dot-com boom days, with analysts attributing the rise to a report on Monday of Office finally landing on the iPad.

Microsoft's shares rose as much as 5 percent to $39.90 on Tuesday, adding $15 billion to the company's value, Reuters reported. The last time the software giant's shares flirted with $40 was in July 2000.

ZDNet, Reuters, and others reported on Monday that Microsoft has scheduled a March 27 press briefing in San Francisco where Microsoft's new CEO Satya Nadella will introduce the Microsoft Office for iPad suite of applications.

"We estimate that if 10 percent of the iPad install base were to subscribe to Office then this could add 15 million subscribers and generate $1.1 billion to $1.5 billion in consumer Office subscription revenue per year," Bernstein Research analyst Mark Moerdler said in a research note on Tuesday, as reported by Reuters.

The suite for the iPad is rumored to include Word, Excel, PowerPoint, and OneNote but no other Office client apps, according to ZDNet. It is expected to be a download on the Apple Store and may require a Microsoft Office 365 subscription, similar to the way Office Mobile for iPhone works, ZDNet said.

But to attribute the share price spike solely to Office is missing the bigger picture, according to said Bob O'Donnell, principal analyst at Technalysis Research, which follows Microsoft.

"iPad for Office is certainly a big deal should it come to pass," he said in a phone interview. "But they're also addressing emerging market needs [offering Windows Phone for free in India] and then don't forget what they're doing with the Nokia X phone," he said, referring to the Nokia phone that runs Android. (Note that the Nokia X phone was reported as getting one million pre-orders in China but that claim was later called into question.)

"This is the kind of change that only happens when you have a change at the top. All of this is related. Nadella taking over, less involvement from [former CEO Steve] Ballmer, and all these moves, all reflect things that I'm sure were being debated within the walls of Microsoft but are now happening as a result of the change in leadership," he said.