Or: "The Lost Articles on the $18 Billion Dollar Loss"
[I'm writing this fast, so don't mind the grammar]
If you are new to this, you are encouraged to read the links at the bottom
(Microsoft is not healthy with its old business model).
The industry _as a whole_ is cutting down. Many people are being sacked and
larger companies stop recruiting. Some companies are wealthy enough to play
financial games. Microsoft and IBM are on heavy buybacks, so this is
undeniable and inevitable. IBM sliced the wages (15%) and it carries on
offshoring. At the same time, it's able to manufacture this illusion that all
is well. So does Microsoft. Dell and Novell and totally bluffing while at the
same time axing jobs and sending _some of them_ abroad. Don't believe their
financial figures. It's called recession. Novell has admitted cooking the
books. Even SCO pretended to be doing well just before filing Chapter 11.
>From a reliable source I hear that it's the same old business. "If you can get
hold of this article, it is probably time to dig it out again and use in the
context of the current financial troubles. Microsoft execs bluff like
anything, but basically it seems much of the Vista sales aren't sales." I've
said that for over a year.
"Anyway, in 1998, Microsoft ran an $18-billion loss. Bill jumped ship as CEO."
"Share and share unalike", Aug 5th 1999, The Economist
http://www.economist.com/displayStory.cfm?Story_ID=230106&CFID=1608647&CFTOKEN=8842676
"Now he's jumping ship from his role as Chairman to be. Though that seems to
me so that admit he is full time politician and cause damage worldwide. Yes,
that's why he decided to 'retire'."
"The Economist article used to be readily available as well, until fairly
recently" (when it was apparently heavily cited)
I've actually been writing about this for over a year and below are only _some_
of the links which show that it's happening again (Microsoft lost over half of
its savings in the past two years).
Here is a new article from the Microsoft-affiliated Web site, Motley/MSN Fool
(published 2 days ago):
Dueling Fools: Microsoft Bear
,----[ Quote ]
| You don't need to watch the 'I'm a Mac, I'm a PC' commercials to see that
| Microsoft is taking a beating. You see it in the company's financials where
| its online unit, incredibly, is operating at a loss; overheating Xbox 360
| consoles find the company taking a huge warranty hit for a system losing
| market share to the Wii; and the upgrade wave of its flagship operating
| system has been more of a ripple than a tsunami. That last point is
| important. This was supposed to be Microsoft's final feast, the major last
| hurrah for its Windows Vista operating entry and its Office 2007 suite of
| applications before the inevitable embrace of cheaper open source operating
| systems and Web-based apps... In fact, even Microsoft will tell you that its
| fortunes peaked several months ago.
`----
http://www.fool.com/investing/value/2008/01/23/microsoft-bear-argument.aspx
Another source that has followed Microsoft for a long time adds (offline):
"Also, Microsoft has made lots of acquisitions, and so they will say that they
have gotten value their dollar (by buying companies) and they have returned
value to shareholders, which is an appropriate use of capital, if the
circumstances call for it. And the Microsoft shareholders were getting grumpy
because the stock was stagnating for a while, and Microsoft was sitting on a
pile of cash, which they disbursed in December 2006, I think it was. And I
seem to recall that it was the largest one-time cash dividend payment in the
history of the world. It was something like $40 billion USD, IIRC.
So the challenge for us here will be to show that the value was simply eroded.
I don't think that is the case.
I do think that Microsoft's sales have not kept pace with the growth of PC
sales, and that is the interesting thing. Or, to put it another way,
Microsoft is losing market share. IMHO, that might be easier to prove than to
say that they are experiencing a loss of capital.
Because, after all, it is far for the shareholders to expect a dividend
payment. So no one is going to be critical of Microsoft for expanding by
buying new businesses (unless they are expanding into areas where they do not
excel, which I think is the real problem for shareholders with their
acquisitions) or unless they buy bad businesses (not the case) or unless they
fuck up the acquisitions, which they sort of have done with hotmail, which
never caught up with Yahoo mail."
[...]
"To sort of summarize, my main point has always been that Microsoft cannot
compete in areas where it is not able to leverage its Microsoft Windows
monopoly, because Microsoft is not an innovator, except for a few minor areas,
such as their recent photosharing project, which did not take off in a
commercial sense. I even forgot the name of it.
The Xbox is popular, but not immensely profitable for Microsoft; certainly not
on the level of the Microsoft Office or Microsoft Windows cash cows. Halo
sold well, but not on the level of Microsoft Windows or Microsoft Office.
It's because they have real competition with Nintendo and Sony. Same for
MSNBC. In every area of their business except for Windows and Office,
Microsoft is just an ordinary revenue generator.
They are bullies, plain and simple. They are not innovators. Where they must
compete, they exhibit lackluster performance."
Related:
A Dozen Stocks For '07
,----[ Quote ]
| Millen also thinks $36 billion in planned share buybacks
| will help the stock.
`----
http://www.forbes.com/2006/12/05/stocks-markets-investing-pf-ii-cz_ag_1205stockpicks.html?partner=yahootix
http://tinyurl.com/yjzfbo
Microsoft counts on Vista to recharge stagnant stock
,----[ Quote ]
| There was a time in the 1990s when shares of Microsoft stock seemed to
| double every couple of years. 1996: college for the kids. 1998: a place
| on Whidbey. 1999: early retirement.
|
| Times have changed.
`----
http://seattletimes.nwsource.com/html/businesstechnology/2003437957_vista19.html
Commentary: Microsoft needs more than just buybacks to lift its shares
,----[ Quote ]
| Microsoft shares, which have been dormant for the last few years,
| have been looking up over the last couple months. The Dow industrials
| component has gained about 20% since hitting a 4-year low of $21.46 o
| June 13.
|
| To help move things along, Microsoft not only launched a $40 billion
| stock repurchase program that lasts through 2011, the company also said
| its previously announced 4-year, $30 billion stock buyback program was
| completed in just 2 years.
`----
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B685EFB89%2D5791%2D4E8B%2DAD6A%2D9688F5B6012A%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo
Software Notebook: Microsoft's cash pile isn't what it used to be
,----[ Quote ]
| But Microsoft has taken a series of steps to reduce its cash
| balance. Specifically, by Microsoft's count, the company has
| paid out nearly $100 billion through dividends and repurchasing
| its own stock in the past five years.
`----
http://seattlepi.nwsource.com/business/309852_software02.html
Microsoft Hides Its Mobile and Business Apps Divisions
,----[ Quote ]
| The company is folding its two worst-performing divisions -- Microsoft
| Business Solutions (its business applications unit) and its Mobile and
| Embedded units -- into the Microsoft Business Division and Microsoft Home
| and Entertainment units, respectively.
`----
http://www.microsoft-watch.com/article2/0,1995,1990243,00.asp?kc=MWRSS02129TX1K0000535
How Much is Too Much?
,----[ Summary ]
| Microsoft says it will stick with Xbox. But with years of heavy losses
| behind it, the pressure's on for the gaming division to make good
`----
http://www.businessweek.com/innovate/content/oct2006/id20061013_283856.htm?campaign_id=rss_topStories
http://tinyurl.com/yxdr4j
Microsoft stoic despite massive losses
,----[ Quote ]
| If you were to judge by the PR rhetoric, you'd think the 360 was
| an unstoppable commercial juggernaut. As usual though, PR lies.
`----
http://www.gamerscan.com/articles/06/10/09/microsofts.massive.losses/
Loot: Redmond, We Have a Problem, Or, What's Wrong With the Xbox 360
,----[ Quote ]
| At this point, Former becomes impassioned. That's not fair, he says;
| we always saw this as a long-term venture. To which we reply that we
| were talking about the original Xbox, and while other divisions of
| the company throw off more profits in a single quarter than the
| entire $5 billion or so lost in the home and entertainment division
| ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
| to date, the fact remains that, as we take-our-word-for-it predicted,
| the Xbox group has been spectacularly unprofitable for Microsoft.
| Hence, our heretofore unpublished Vietnam analogy. The rest of the
| night is a blur, but we digress.
|
| [...]
|
| The worst case scenario for Microsoft, then, is one in which the Xbox
| 360's bid for the mass market is blocked by the Wii for the next two to
| three years, at which point the aging and underpowered Wii gives way
| to a cheaper-than-it-is-now PS3 with a selection of AAA titles that's
| far wider than what the PS3 has at the moment; new installments of
| Playstation's own popular and casual-leaning games; and a slew of
| new franchises from Sony's much-larger studio operation.
`----
http://ncroal.talk.newsweek.com/default.asp?item=533168
The Secret Failures of Microsoft
,----[ Quote ]
| There is no choice involved; even most Linux users are forced to pay for a
| Microsoft license in order to obtain a brand name PC.
|
| [...]
|
| They are bound to an oath to swear allegiance to Windows XP Professional,
| and must never mention Linux and Windows in the same breath. If they step
| out of line in any way, Microsoft dramatically raises their OEM licensing
| fees and sends them to indoctrination camp, where they face chairs being
| hurled at them by angry monkeys.
|
| [...]
|
| Why do Windows enthusiasts exibit much hostility to an obvious fact?
| Because if they admit that 80% of the company's revenues come entirely
| from an OEM tax, and not from any choice on the part of consumers...
|
| [...]
|
| Microsoft's decade of investments in WinCE and Windows Mobile
| Smartphones have only barely matched the market share of Palm, which
| itself is a run down company out of ideas. Microsoft couldn't
| out-maneuver the incompetent Palm within a decade of trying; now both
| are ineffectually fighting over the dying PDA industry while Linux and
| Symbian slaughter them in the smartphone arena:
|
| Symbian 75%; Linux 14%; Microsoft 5%; Palm 5%.
|
| [...]
|
| (many more failures listed)
`----
http://www.roughlydrafted.com/RD/Q4.06/2E6D9BB2-FE1B-4556-8389-67BD581FBCCC.html
Wis. Bill to Require Tax Loophole Data
,----[ Quote ]
| Wisconsin Bill Would Require More Reporting on Tax Loopholes
|
| [...]
|
| A message left with Microsoft was not immediately returned.
`----
http://biz.yahoo.com/ap/071219/wi_corporate_taxes.html?.v=4
Ecuador Tax Agency Closes Microsoft Branch Offices For 7 Days
,----[ Quote ]
| "We have twice requested balances, payment reports and complete tax
| information, but the company hasn't given it to us, so in accordance with our
| laws we have proceeded with the closure," the SRI official in charge of the
| proceeding said.
`----
http://money.cnn.com/news/newsfeeds/articles/djf500/200710041610DOWJONESDJONLINE000810_FORTUNE5.htm
Microsoft Office raid in Hungary
,----[ Quote ]
| "Such behavior could lead to the exclusion of competitive products from
| the market and violate European Union rules, according to the authority
| known as the GVH."
`----
http://www.forbes.com/feeds/ap/2007/07/26/ap3957835.html
Microsoft's past stock options practice poses questions
,----[ Quote ]
| Microsoft in 1999 announced that it would end a policy of awarding
| options at monthly lows and said it would take a $217 million charge,
| though many details of that discontinued practice haven't been widely
| known, The Wall Street Journal said Friday.
|
| Those details raise questions about how Microsoft began the practice,
| what prompted the company to end it and whether the way the options
| were dated--at 30-day lows the month after they were
| granted--influenced other companies, it said.
`----
http://news.zdnet.com/2100-3513_22-6084617.html
Microsoft's Bach sold more stock before Xbox news
,----[ Quote ]
| Microsoft Corp. executive Robbie Bach sold $3 million more in company stock
| during the period leading up to an announcement about a costly flaw in its
| Xbox video game console than previously reported, according to a filing
| Monday with the Securities and Exchange Commission.
`----
http://www.marketwatch.com/news/story/microsofts-bach-sold-additional-stock/story.aspx?guid=%7BBECA3A50-EF33-4161-A111-A43BDC8B0462%7D&siteid=yhoof
|
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