Microsoft's the Impostor, Not Amazon

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NEW YORK ( TheStreet) -- We can classify two of the bigger earnings reports that hit last week as some form of surprise or spectacle.

There's Microsoft , which surged on an earnings beat , prompting some investors to not only buy the stock but suggest the company might not be as bad off as some of us suspect.

Then there's Amazon.com reporting a loss on strong revenue, triggering the same old knee-jerk landslide of reaction.

The smart money doesn't question Jeff Bezos's 15-year long streak of success , while the usual suspects tell us the Amazon story rests on nothing other than hope . They consider Amazon an "impostor," yet give the nod to Microsoft, a company so confused its CEO had to announce his retirement.

No circuitous bush-beating from me: Every word I wrote last week in Apple's Plan to Destroy Microsoft and With Leadership Like This, Microsoft is Doomed still stands.

If you think Microsoft's strong balance sheet (which is nothing new) and reported strength in enterprise software means anything, relative to what Apple is up to, you likely suffer from the same syndrome of denial that plagued BlackBerry believers when the company was still RIM.

Don't use the stock market to gauge anything. It's a chaotic, psychotic and schizophrenic place. There's no way to make sense of how it values individual companies. It prices some on the basis of confidence borne out of history, while it knocks others down on concerns over the future. It attaches a low number to some stocks because of poor past performance, but a high number to others because it expects big things tomorrow. And everything in between.

All you really need to know is that, in the aggregate, over time, the stock market continues to go up.

In other words, you can't automatically form an opinion about a company and apply it to the stock -- or vice versa -- but that doesn't mean you shouldn't invest.

If we're going to set up a Microsoft/Amazon dichotomy, as some people did last week, we need to look at the potential for continued strength in each company's core businesses.

For Amazon, that's a quick assessment. The company's e-commerce ecosystem dominates and will continue to dominate brick-and-mortar retailers who have a) shifted some sales online a decade too late and b) struggle with overhead that bears very little fruit. Amazon spends money as part of a logical growth plan, as a means to the ends of seizing massive opportunity that never seems to go away. Most other retailers do little other than follow Amazon's lead and, relatively speaking, lose in the process.

At Microsoft, however, the combination of the PC's pending death, the company's ongoing tablet-PC confusion, Apple's now-obvious decision to crush Windows/Office with consumers and in the enterprise, not to mention Google's emerging suite of software platforms, spells nothing other than death. The type of death most observers, particularly the ones who qualify last week's earnings as a vote of confidence, only see in their rearview mirrors.