Microsoft Corp. (MSFT) shares dipped to a new 52-week low Friday after the company said it planned to significantly beef up investments in many areas where it is not dominant, but refused to provide details.

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Analysts said such investments, while risky, may pay off in the long term but could hurt more immediate financial results at the world's largest software maker.

Microsoft shares fell $3.02, or more than 11 percent, to $24.23 in midday trading on the Nasdaq Stock Market. Shares have traded between $24.25 and $28.38 over the past 52 weeks.

The change in strategy was particularly stinging because Microsoft executives have long been touting a wave of major product launches, whetting many analysts' appetites for profits in the coming months and next fiscal year.

"Wall Street had been kind of primed for massive product launches, thinking, 'OK, this is it, after years of waiting we're finally going to get a big increase in earnings," said analyst Jonathan Geurkink with Ragen MacKenzie.

But when the company surprised analysts Thursday by signaling it intends to spend a big chunk of money on new products, there was "the sense of feeling like the rug has been pulled out," Geurkink said.

The company announced the change in strategy as it forecast lower-than-expected earnings for its current fiscal fourth quarter, which ends in June, and its 2007 fiscal year. At the same time, it reported earnings for its fiscal third quarter that fell below Wall Street expectations.

Analyst Mary Meeker of Morgan Stanley downgraded the stock to "equal weight" from "overweight," citing concerns that the company was not going to be able to get more leverage from such a large rash of product releases.

"We are shaking our heads," she wrote in a research note Friday.

Microsoft further confounded analysts when it refused to immediately disclose details of its new investments. Instead, the company pointed generally to more than a dozen initiatives under way, including selling software as a service over the Internet, security and further investments in its Windows Live and MSN online properties.

Microsoft already has been investing in these areas, amid growing competition from companies such as Google Inc., Salesforce.com Inc. and Yahoo Inc. (Nasdaq:YHOO - news) But, when pressed for more details on how the new spending would help the company compete, Chief Financial Officer Chris Liddell demurred, saying that would be addressed at a financial analysts' meeting in July.

"They were explicitly inexplicit, and that doesn't give people a lot of comfort," said analyst Charles Di Bona with Bernstein & Co.

Still, analysts, including Di Bona, said it is probably necessary for Microsoft to start spending more money to beat its competition where it is not dominant.

Microsoft has expanded considerably from its origins as a PC software maker, offering everything from videogame consoles to free e-mail accounts, but the company still makes most of its money from its Windows operating system and Office productivity suite. That's a problem because those markets are becoming saturated, and yet Microsoft is still struggling to make inroads in some of the developing markets.

Geurkink said there is reason to be concerned about such a change, in that Microsoft has in the past poured money into major initiatives that haven't panned out, such as its broad ".NET" online agenda that had to be tweaked considerably after consumers balked.

But he said there's also an upside to Microsoft taking new risks.

"I'm a little bit excited to see what seems to be the company standing up and saying, 'OK, there's a competitor in the crosshairs and let's go after them,' ... rather than sitting back and counting the dollars rolling in from Windows and Office," Geurkink said.

Analyst Mark Stahlman with Caris & Co. welcomed the news of Microsoft's massive new investments, saying he believes many analysts have forgotten how important it is to invest for the long term, even if it comes at the expense of short-term profits. Stahlman sees potential for Microsoft to dominate the living room experience with things like the media-centric version of Windows and its Xbox 360 videogame console. He also thinks the company has an opportunity to become a leader in providing technology for small- and mid-sized businesses, an area where it has recently placed a lot of emphasis.

"I am old school, and what Microsoft is doing here is vital to the long-term survival of Microsoft," Stahlman said.

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