The world’s largest software maker, Microsoft Corp. (MSFT - Analyst Report) will invest $100.0 million in a new research center in Rio de Janeiro, Brazil. The investment will cover research and development, and other entrepreneurial programs.
This will be the fourth Microsoft Research Advanced Technology Laboratory built by the company in Brazil (previously opened in Germany, Israel and Egypt). The lab will house the Bing search engine as well as a business accelerator that will support 15 startups in the following 2 years. The startups will be funded from an investment fund, which is a wholly owned subsidiary of Microsoft Brazil.
Microsoft’s investment is critical for the success of the new startups, which will lead to job creation and boost the nation’s growth. Also, Microsoft’s initiative will open new avenues for the IT sector in Brazil, which may become a critical part of the nation’s overall development in the future. The Latin American country can develop into a technology hub going forward.
Rio is an ideal choice for Microsoft’s investments. Stalwarts such as IBM Corp. (IBM - Analyst Report) and General Electric Company (GE - Analyst Report) have already opened research centers in Rio. Moreover, Cisco Systems, Inc. (CSCO - Analyst Report) and Intel Corp. (INTC - Analyst Report) are planning to expand in the region as well.
Microsoft has been investing in the Latin American nation since 2008. Earlier, the company started a project for opening cyber cafes throughout the country and further including educational and job-training activities for the youth.
Microsoft’s operating systems are installed on the majority of computers in the world. The company has been innovating on many fronts and has many new and exciting products lined up.
For the first quarter of fiscal 2013, Microsoft reported revenue excluding deferrals of $16.01 billion, down 11.4% sequentially and 7.9% from last year, missing estimates by 2.5%. The softness in Windows was expected, since customers were delaying purchases ahead of the Windows 8 launch.
Microsoft Corp. has a Zacks #3 Rank, which implies a Hold rating in the short term (1-3 months).