On Saturday, I opined, that since Microsoft has failed to profitably launch, any software beyond Windows and Office, it should stop wasting shareholder value, stick to its core products and either dividend its cash or invest it in profitable acquisitions.

I also pointed out that Microsoft no longer has the DNA of an inventor. Innovative companies attract entrepreneurial talent by stock options. By definition innovative companies stock prices must be going up to do so. And must continue to do so. Because once that "music stops", a company stops attracting and retaining entrepreneurial talent. In short it becomes Microsoft.

Two things to point out today. One is I went back and looked at the stock prices of Microsoft and Apple over the last 10 years. Even though Microsoft earned $4.52 billion last quarter and Apple earned $3.25 billion, investors pay for growth. And that explains why Microsoft stock trades at 55% less than it did in 2000. In contrast Apple stock trades at a staggering 829% more than it did in 2000. If you were an entrepreneurial innovator would you be attracted to a stock options that grew 829X or stock options that were out of the money by 45%?

Put another way if you were offered 10,000 stock option in Apple in 2000, they would now be worth $8.2 million dollars (10,000 times 829X). If you were offered 10,000 options in Microsoft in 2000, they would be worthless.

The second thing to point out, is now obvious. Stock options potential to grow in value, is the single most important factor in business success. Stock option growth is the only way to attract top talent. And in technology, the main engine of growth, is human intellectual capital.

In the immortal words of Big Tom Callahan in Tommy Boy, "you are either growing or you are dying".

- John Jazwiec