Slashdot Mirror

if you're a day late with the info?

from here

PLAYBOY INTERVIEW: GOOGLE GUYS

A candid conversation with America's newest billionaires about their oddball company, how they tamed the web and why their motto is "Don't be evil"

Just five years ago a googol was an obscure, unimaginable concept: the number one followed by 100 zeros. Now respelled and capitalized, Google is an essential part of online life. From American cities to remote Chinese villages, more than 65 million people use the Internet search engine each day. It helps them find everything from the arcane to the essential, and Google has become a verb, as in, "I Googled your name on the Internet and, uh, no thanks, I'm not interested in going out Friday night."

In addition to being the gold standard of Internet search engines, Google is setting a new example for business. It's difficult to imagine Enron or WorldCom with a creed similar to Google's: "Don't be evil," a motto the company claims to take seriously.

This maxim was perhaps most apparent in May when the company announced it was going public. Google founders Sergey Brin and Larry Page explained their lofty ambitions. "Searching and organizing all the world's information is an unusually important task that should be carried out by a company that is trustworthy and interested in the public good," they wrote in an unprecedented letter to Wall Street. With the release of the letter, Newsweek reported, "The century's most anticipated IPO was on, and the document, revealing the search giant's financial details, business strategy and risk factors, instantly eclipsed Bob Woodward's Iraq book as the most talked about tome in the nation."

Page, 31, is the son of Carl Page, a pioneer in computer science and artificial intelligence at the University of Michigan. Larry was surrounded by computers when he was growing up and once built a programmable ink-jet printer out of Legos. Reticent but wide-eyed and reflective, he is Google's clean-cut geek in chief, the brilliant engineer and mathematician who oversees the writing of the complex algorithms and computer programs behind the search engine. His partner, Brin, 30, is a native of Moscow, where his father was a math professor. As Jews, the Brins where discriminated against and taunted when they walked down the street. "I was worried that my children would face the same discrimination if we stayed there," his father told Reuters. "Sometimes the love for one's country is not mutual." The family emigrated to the U.S. when Brin was six. A part-time trapeze artist. Brin is the company's earnest and impassioned visionary--a quieter, nerdier Steve Jobs. Early on, when Google CEO Eric Schmidt was asked how the company determines what exactly is and is not evil, he answered, "Evil is whatever Sergey says is evil."

Page and Brin met as graduate students at Stanford University. After years of analyzing the mathematics, the computer science and the psychological intricacies involved in searching for useful information on the ever-growing World Wide Web, they came up with the Google search engine in 1998. It was far superior to existing engines, and many companies, including Yahoo and MSN, licensed it. (Yahoo recently severed its ties with Google, introducing its own search engine. Bill Gates, who once admitted that "Google kicked our butts" on search-engine technology, has announced that Microsoft will launch its own search engine next year.) With its simple design and unobtrusive ads, Google has quickly become one of the most frequented websites on the Internet, and the company is one of the fastest growing in history. The financial press has estimated that after the initial public offering, Google will be valued at $30 billion, and Brin and Page, each of whom owns about 15 percent, will be worth more than $4 billion apiece.

The two are unlikely billionaires. They seem uninterested in the accoutrements of wea

Read the full text of the Playboy interview, compliments of the SEC. (Warning: It is a very long HTML file; wait for it to load. If your browser (such as IE) loses the fragment anchor, do a text search to find the beginning of Appendix B.) Of course, if you want the pretty pictures, you're going to have to buy it.

I've also picked up the Google/Playboy issue on my flagship blog.

The interview, as well as Playboy centerfold pics (just kidding) is now available online at the SEC. It seems once something is relevant to the law, Playboy's commercial interests are thrown out the window. I wonder how this might work to make music freely available over the Internet. Oh yeah, the interview

Here is what I've found about this case on the Net: http://www.sec.gov/litigation/opinions/34-45437.ht m ...beginning in February 1996, Kufrovich engaged in discussions of a sexual nature with a 14-year-old girl via an Internet chatroom. Kufrovich, who was 41 years old at the time, represented himself in these discussions to be a younger person, closer to the girl's age. These discussions resulted in Kufrovich arranging to meet the girl in March 1996 for sexual relations in a hotel room in another state, where she would be traveling with her mother. When she met Kufrovich at the hotel, the girl immediately realized the deception about his age, left the room, and alerted her mother, who reported the incident to the police.

In December 1997, Kufrovich agreed to plead guilty to two federal felony charges: (1) enticing and attempting to entice a minor to engage in an unlawful sexual act, in violation of 18 U.S.C. 2422(b), and (2) traveling interstate with intent to engage in a sexual act with a minor, in violation of 18 U.S.C. ?2423(b).

Now, let's compare "extent". Come to the door, see not 22 yo boy as expected, but 41 year old man - run. And has your domain name grabbed and abused. Which one is greater?

Anyway, she is lying that she was 13 years old, she is lying that she was raped, she is lying that it took her 2 years to put him to jail... And she (not Penguin) named her TV show Katie.com and her website is still full of bookcovers with bright Katie.com on them - right there, next to "apology" for Penguin's grabbing the domain name... I don't get it.

I was wrong, it's not integration. Much worse: just plain stupidity.

Look at this link: Recission. The offerings weren't registered but they weren't exempt either. My guess is they assumed they were exempt so didn't register them (where were their lawyers?) Since they were stock option plans, I assume they allowed for non-qualified investors (that would be boilerplate)--they must have gone over the dollar threshold for exemption. I think that complete recission may be their only option here... or civil penalties. They might be able to work something out with the SEC, since it seems a victimless and technical mistake.

I guess this article just shows that no one reads these SEC filings -- the rescission offer was disclosed in the very first S-1 filed at the end of April. (direct link to the original rescission offer disclosure) And it's not like it was buried. It has its own entry in the table of contents.

I think that most financial people who are thinking of buying shares have probably seen this, if they've been following the filings. Remember that there have already been 3 amendments to the registration statement, plus the S-1 to the rescission offer, totaling 5 different documents that disclose it. Also, the financial statements disclose it, so add the Form 10 that Google has filed and the 3 amendments to it, for a grand total of 9 different filings over the past 3 months that all mention it.

These people probably don't think it's a big deal, because of the relatively small liability (see Section 12 of the Securities Act of 1933), and probably no one will exercise the rescission right anyway (they'd be crazy to do that before the IPO). More importantly, this kind of stuff happens more often than you might think; some companies will just take the risk of this liability and not do a rescission.

Also, don't confuse section 12 liability (which is essentially about selling shares in unregistered/non-exempt transactions) with rule 10b-5 liability, which is what you hear about all the time (all those class actions are usually rule 10b-5 actions). 10b-5 is about fraud.

I guess this article just shows that no one reads these SEC filings -- the rescission offer was disclosed in the very first S-1 filed at the end of April. (direct link to the original rescission offer disclosure) And it's not like it was buried. It has its own entry in the table of contents.

I think that most financial people who are thinking of buying shares have probably seen this, if they've been following the filings. Remember that there have already been 3 amendments to the registration statement, plus the S-1 to the rescission offer, totaling 5 different documents that disclose it. Also, the financial statements disclose it, so add the Form 10 that Google has filed and the 3 amendments to it, for a grand total of 9 different filings over the past 3 months that all mention it.

These people probably don't think it's a big deal, because of the relatively small liability (see Section 12 of the Securities Act of 1933), and probably no one will exercise the rescission right anyway (they'd be crazy to do that before the IPO). More importantly, this kind of stuff happens more often than you might think; some companies will just take the risk of this liability and not do a rescission.

Also, don't confuse section 12 liability (which is essentially about selling shares in unregistered/non-exempt transactions) with rule 10b-5 liability, which is what you hear about all the time (all those class actions are usually rule 10b-5 actions). 10b-5 is about fraud.

No that anyone RTFA, much less supplemental information, but for historical purposes here's a link to the specific document in the Google SEC filing that talks about the "recission offer":

Form S-1 Registration Statement

This section in particular is a good summary of what they did.

No that anyone RTFA, much less supplemental information, but for historical purposes here's a link to the specific document in the Google SEC filing that talks about the "recission offer":

Form S-1 Registration Statement

This section in particular is a good summary of what they did.

Here's the registration form with the SEC that Google filed when they wanted to issue shares a few months ago. Although, they say that the stock price is based upon the auction format that they are setting up, which makes sense because then the people who buy into the IPO determine the price in this style of selling. Google or someone else is probably just estimating, based on surveying traders, what the market is willing to pay for stock in the auction.

While Google on the other hand is still running their company like they are actually interested in innovating and are forcing a number of fairly sizable companies to innovate to keep up which is always good for the consumer.

The problem is that public companies have to disclose a lot more information than private companies do. The SEC wants investors to have as clear a picture as possible into the operations (including "analysis of known trends, demands, commitments, events and uncertainties") of public companies. On the other hand, private companies (like the pre-IPO Google) have a lot more leeway in being able to keep major initiatives secret from their competitors until they're ready to be rolled out.

My prediction is that Google's much-touted culture of innovation goes into a tailspin after the IPO.

I've always been fascinated by people's fixation on the share price when it means absolutely NOTHING in the grand scheme of things.

A stock's value is calculated by the share price times the total number of shares outstanding. Now, Hemos was quick to comment on the share price, but lacks the understanding to figure out just how much cash the company is raising and what the total value of the company will be at these levels.

But who cares?

It really doesn't matter because the average investor doesn't know any better. This is the same reason that stocks go up when the company announces a stock split. The idiots eat these stocks up because they think that there's something magical about owning a stock through the split. "The company gives you more shares", responded an ignorant investor after I queried him on his voracious appetite for buying companies that are ripe for splitting. What he failed to realize is that the price drops proportionally - the value of the company (and each investor's holdings) is the same before and after the split. But nevertheless, owning these companies through the split is often a very profitable method of investing simply because of all the ignorance out there. Never underestimate the power of stupid people in large quantities.

It makes me want to shoot myself in the face.

I understand that they're struggling somewhat and they've taken bailout loan guarantees from the feds and there was talk of Chapter 11 filing. And yes, from their sec filings you can see they're putting greater pressure on their fleet/staff. But I figure they are the second largest low-fare carrier, next to Southwest, which is really the only airline kicking butt and taking names at this point, and they don't appear to be hiring for the kind of job I want (pricing/yield/revenue management), while America West does. And also, lean times at a company can present a real opportunity to distinguish yourself by merit.

But feel free to email me further if you've got more inside scoop. If I'd be walking into not just a challenge but a really adverse environment, I'd definitely be interested to hear about it (I would have emailed you already, but you don't have an address listed, so...)

From the link:

Except for the Exhibit G joint press release referenced herein, and except for the filing of this Settlement Agreement as an exhibit to Lindows' initial public offering registration statement and other required filings with the Securities and Exchange Commission (along with a description of the terms of this Settlement Agreement in such filings)

This thing is as confidential as Windows is non-generic -- IE, only under the letter of the law. These lawyers have been swallowing too many camels and strained at too many gnats. It's more amusing than Bush trying to have previously public documents declared classified.

This means that MS will have to port some software to Linux. Ouch!

Of course, this is all speculation but I wouldn't count on much for this except that it would be a legal replacement of the dll codecs that Lindows currently uses for WMP compatibility.

Notwithstanding the foregoing, for a period of (4) four years from the Effective Date of this Settlement Agreement, Lindows may use www.lindows.com and www.lindowsinc.com solely for the purpose of redirecting traffic to other websites. After (4) four years from the Effective Date of this Settlement Agreement, Lindows will assign the www.lindowsinc.com and www.lindows.com domain names to Microsoft by signing the Domain Name Assignment attached hereto as Exhibit A.

So Linspire gets to use the domain names for four years still as long as it's just to redirect people to the actual Linspire website.

Others have already posted shorter summaries, so I won't bother.

The ZDNET/C|net buggers barely scratched the surface.. Here's a link to the full text of the so called, Confidential Settlement Agreement and Mutual Release of Claims, dated as of July 16, 2004, by and between Microsoft Corporation and Lindows, Inc as filed with the SEC.

You can't short stocks on the NASDAQ when they're below $5.

Nasdaq Stock Market Securities

NASD Rule 3350 prohibits NASD members from short selling in Nasdaq National Market System securities at or below the inside best bid when the best bid is below the previous inside best bid for that stock. The inside best bid is the highest bid by all market makers quoting a particular stock.

When stocks fall under 4 they have a Federal Reserve Board margin requirement of 2. This makes shorting low priced stocks less attractive, but they may still be shorted.

An example of this is to short 1000 shares at 0.01 would require a deposit of $2000 to short $10 of stock. This may not be a concern if you have a large amount of marginable securities that you are not using for anything else, but for most people it is imprudent to short low value stock.

You can't short stocks on the NASDAQ when they're below $5.

Nasdaq Stock Market Securities

NASD Rule 3350 prohibits NASD members from short selling in Nasdaq National Market System securities at or below the inside best bid when the best bid is below the previous inside best bid for that stock. The inside best bid is the highest bid by all market makers quoting a particular stock.

When stocks fall under 4 they have a Federal Reserve Board margin requirement of 2. This makes shorting low priced stocks less attractive, but they may still be shorted.

An example of this is to short 1000 shares at 0.01 would require a deposit of $2000 to short $10 of stock. This may not be a concern if you have a large amount of marginable securities that you are not using for anything else, but for most people it is imprudent to short low value stock.

Microsoft would gain nothing in buying shares that they couldn't get without owning shares. Being a small shareholder does not gain you any extra information on business strategy that isn't already publically available through SEC filings. Regulation FD fixed that.

From Microsoft's most recent filing, dated 20030905, Form 10-K [emphasis added]:

We follow Accounting Principles Board Opinion 25, Accounting for Stock Issued to Employees, to account for stock option and employee stock purchase plans, which generally does not require income statement recognition of options granted at the market price on the date of issuance.

Am I reading that wrong? I understand the question is whether they should be required to expense options, which Microsoft is clearly stating that it is not required to do.

From Microsoft's most recent filing, dated 20030905, Form 10-K [emphasis added]:

We follow Accounting Principles Board Opinion 25, Accounting for Stock Issued to Employees, to account for stock option and employee stock purchase plans, which generally does not require income statement recognition of options granted at the market price on the date of issuance.

Am I reading that wrong? I understand the question is whether they should be required to expense options, which Microsoft is clearly stating that it is not required to do.

IPO On Ebay, they better make sure they follow the Sarbanes Oxley Act

Would be horrible to do 20 years in jail for Art.

Not the answer you were looking for, but Pixar's most recent 10-K has (gross) revenue for the most recent films. Way down in the page -- search for "revenue segment information by film category" -- you'll see a chart.

Also in the filing (under "Cost of Revenue") is the following:

ost of film revenue was $11.8 million in 2001, $41.0 million in 2002, and $38.0 million in 2003, and represents primarily amortization of capitalized film costs. Cost of film revenue as a percentage of film revenue for fiscal 2001, 2002 and 2003 was 19%, 21% and 15%, respectively.

I think we're getting close.

In the words of the SEC complaint filed with the U.S. District Court, "As of late 2002, MI's approximately 40 years of development has resulted in a prototype Skycar capable of hovering about fifteen feet above the ground."

Have google said what percentage of the company is being sold in this IPO? I can't see that information in their Form S1 filing but I may be overlooking it.

The filing says that the maximum aggregate offering is 2.7 billion dollars which presumably caps the launch price, though we don't know what it is capped to until the number of shares being sold is announced.

Read all about it here

Pixar was never a part of Disney -- Disney just had an agreement to distribute the pictures and take half the profits.

From their recent annual report:

Relationship with Disney

A critical component of our objective to maintain our position as a leading brand in the animated feature film market is to secure strong promotion, marketing and distribution of our films and related products. We believe that Disney is among the leaders in the marketing and distribution of animated feature films and related products and is one of the industry's most widely recognized brand names. We have enjoyed a long relationship with Disney that dates back to 1986, when we entered into a joint technical development effort with Disney that resulted in the Computer Assisted Production System ("CAPS"), a production system owned and used by Disney in some of its two-dimensional cel-based animated feature films. Disney first used CAPS for The Rescuers Down Under and has continued to use it for its subsequent animated feature films, such as The Lion King and Tarzan. In 1992, certain employees of Pixar and Disney were jointly awarded an Academy Award® for Scientific and Engineering Achievement for the development of CAPS.

In May 1991, we entered into the Feature Film Agreement with Walt Disney Pictures, a wholly-owned subsidiary of Disney, which provided for the development, production and distribution of up to three feature-length motion pictures (the "Feature Film Agreement"). It was pursuant to the Feature Film Agreement that Toy Story was developed, produced and distributed. In 1997, we extended our existing relationship with Disney by entering into the Co-Production Agreement. This agreement generally provides that we will be responsible for the development, pre-production and production of each Picture, while Disney will be responsible for the marketing, promotion, publicity, advertising and distribution of each Picture. The profits from the Pictures are shared equally between Pixar and Disney after Disney recovers a distribution fee and pre-agreed distribution costs. The term of this arrangement continues until the delivery of Cars to Disney, which we expect to occur in mid-2005.

The New York Times is a publicly traded company which sells advertising and subscriptions. They actually get about twice as much revenue from advertising as they do from subscriptions.

Let's dig into the New York Times finances. I start at www.sec.gov, click on Edgar filings, search for "New York Times", and grab the 10-K, the most recent annual filing.

New York Times 10-K

For the year ended 2003-12-28, their revenus was $3.2 billion. Here's a breakdown:

100% $3.2 billion total revenue
66% $2.1 billion advertising
27% $0.9 billion circulation
07% $0.2 billion other

Advertising revenue is up about 3.5% from 2002, but advertising volume, the number of inches of ads, dropped 3.8% from 2002 to 2003. The Times has been selling fewer ads but charging more for them.

Summary: the primary business line of the New York Times company is selling ads. Internet companies such as eBay are cutting into that ad business. And that's why the New York Times has been trash-talking Google and eBay lately.

Martha Stewart has in fact been charged by the SEC with committing securities fraud by engaging in illegal insider trading. This is a civil case file last June in the Southern District of New York. Peter Bacanovic, Martha'a broker at Merrill Lynch, was also charged.

Google also filed a form 10-12G today. This should be read in concert with the S-1.

bob wyman
CTO, PubSub Concepts, Inc.
http://pubsub.com

You are better off organizing an Investment Club. $100-$200 is not really enough to start investing.

SEC = Securities and Exchange Commission (currently DDoSed)

Do you mean to tell me that the SEC was Slashdotted?

Looks like they're going with the share auction plan. Seems like the SEC filing is buried, but the key details seem to be:

1) Underwriters manage the auction
2) You pre-qualify, etc.
3)You bid (and can multiple bid - ie, one bid for 9K shares at $20, another bid for 1K shares at $40, you'll get 10K shares if the price is $15)
4)The reject "manipulative" or "speculative" bids
5)They calculate a clearance price that'd sell all the shares offered according to the bids, and accept bids accordingly
6)They determine whether to hand out all the shares bid, give everyone 80% of what they asked for, give the bid/little guys everything they asked for, or let original bid price determine who gets everything they asked for.

I'd be really interested in what some professional equity people think of this process, it seems really interesting to me.

Here's the actual text of Google's filing to the Security Exchange Commission

• IPO = Initial Public Offerin
• SEC = Securities and Exchange Commission (currently DDoSed)

"In the filing, Google said that it generated revenues of $961.9 million in 2003 and reported a net profit of $106.5 million. Sales rose 177 percent from a year ago although earnings increased by just 6 percent." - LISnews.com.

More stories are available from CNN and The Associated Press.

Going private would make sense, but I doubt that with employee benefits such as options, they can effectively reduce the number of shareholders to fewer than 300 to make going private viable.

You say "they don't need to raise money for expansion". How do you know?! Have you seen their financials or have you spoken to their strategic planning team while having them on a polygraph?

Raising cash via corporate bonds as you describe might be a very good alternative. I think that most likely, if they decide to not IPO, they will split the company to avoid SEC reporting, IPO doesn't happen, corporate bond offering is made if cash is needed and they will go ahead with their new email product.

Even though timing of the above events is questionable, I would definitely argue that splitting (to avoid reporting) + bonds is the way to go if they want to stay out of long-term trouble, especially in this business, where they are enjoying a reputation of not such an obvious customer-screwer.

On a completely unrelated side note: Do you know that Google tracks your browsing habits? (Imagine how much power that gives them to skew their services for profit!!!!) When you visit Google, assuming you have cookies enabled (just like the 80% of the public who uses IE whether you like it or not), you get a cookie with a unique ID (check if you don't believe). This means that whenever you visit a site that participates in AdWords, the script that displays the ads has access to that cookie and from the referer, it knows where you've been! So if nearly every more or less important site participates in AdWords, Google benefits greatly. Simple, but not so obvious to an average joe visitor...

2) I have no idea what the precise lending terms were; on the other hand, I'm confident that the people behind "talk on the boards" also have no idea.

2) I have no idea what the precise lending terms were; on the other hand, I'm confident that the people behind "talk on the boards" also have no idea.

It list some of their customers: Cendant, Orbitz, priceline.com, Travelocity.com, Buy.com, FTD.com, Netflix, Shopping.com, AmericanSingles.com, Date.com, eHarmony.com, Matchmaker (Lycos, Inc.), Amerix Mortgage Corporation, ING Direct Securities, LowerMyBills.com, RateMyMortgage,goZing.com inPhonic, Motorola, Sprint.

It also refers to their strategic relationships with DivXNetworks, iMesh and Sharman Networks (KaZaA).

For the year ended December 31, 2003, they generated revenue of approximately $90.5 million, substantially all of which came from online advertising. For comparision, Ret Hat's revenue is $126 million for the last year.

The lead underwriter for the IPO is Deutsche Bank Securities.

Check out the filing:

www.sec.gov/Archives/edgar/data/1126167/0001193125 04059332/ds1.htm

It names quite a few of the advertisers, and some of them are large companies such as travel and hotel conglomerate Cendant and LowerMyBills.com.

As well, Brightmail, Advertising.com, and Shopping.com also filed IPO paperwork.

Cheers,
Doug

People need to send an email to enforcement@sec.gov and request a formal investigation into this stock situation with SCOX.

From the SEC Filing:

These risks and uncertainties include, without limitation: (a) risks that the Company will not be successful in its efforts to protect and enforce its intellectual property rights; (b) risks that the Company will not be able to expand and grow its core UNIX business and that such business may decline; (c) risks that the Company will face increasing competition from competing providers of operating system products and services; (d) risks that the U.S. and international economic and political conditions will worsen and adversely affect technology purchases; (e) risks that the Company's SCOsource licensing initiatives will yield fewer licenses or less licensing revenue than anticipated or that such licensing revenue will not be generated when or in amounts currently anticipated; (f) risks that the Company will require more capital than anticipated; and (g) other risks and uncertainties set forth in the Company's filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof, and the Company undertakes no obligation to update such forward-looking statements after the date hereof.

And from this one:

This press release contains forward-looking statements related to SCO's efforts to protect its intellectual property rights and evidence of copyright infringement by Linux of UNIX System V code. These forward-looking statements are subject to risks and uncertainties, including the risk that SCO may not prevail in pending or contemplated litigation or otherwise be successful in its efforts to protect its intellectual property rights. Other risks and uncertainties related to these forward-looking statements are set forth in SCO's filings with the Securities and Exchange Commission.

Nowhere do the words fucking or destroy show up. I'd say that these statements are, at best, sugarcoated. I, much like SCO, care not to speculate worst case scenario.

From the SEC Filing:

These risks and uncertainties include, without limitation: (a) risks that the Company will not be successful in its efforts to protect and enforce its intellectual property rights; (b) risks that the Company will not be able to expand and grow its core UNIX business and that such business may decline; (c) risks that the Company will face increasing competition from competing providers of operating system products and services; (d) risks that the U.S. and international economic and political conditions will worsen and adversely affect technology purchases; (e) risks that the Company's SCOsource licensing initiatives will yield fewer licenses or less licensing revenue than anticipated or that such licensing revenue will not be generated when or in amounts currently anticipated; (f) risks that the Company will require more capital than anticipated; and (g) other risks and uncertainties set forth in the Company's filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof, and the Company undertakes no obligation to update such forward-looking statements after the date hereof.

And from this one:

This press release contains forward-looking statements related to SCO's efforts to protect its intellectual property rights and evidence of copyright infringement by Linux of UNIX System V code. These forward-looking statements are subject to risks and uncertainties, including the risk that SCO may not prevail in pending or contemplated litigation or otherwise be successful in its efforts to protect its intellectual property rights. Other risks and uncertainties related to these forward-looking statements are set forth in SCO's filings with the Securities and Exchange Commission.

Nowhere do the words fucking or destroy show up. I'd say that these statements are, at best, sugarcoated. I, much like SCO, care not to speculate worst case scenario.

Scroll down about halfway through the document to see the results for each division of Microsoft. The Xbox and its games are part of the Home and Entertainment Division, and accounts for most of that division's revenues, and for most of that division's losses.

For the quarter ending Dec 31, the H&E Division brought in $1.2+ billion in revenue, but still lost $241 million dollars. Most of that money comes from the Xbox and its games, and most of that loss comes from losses on the Xbox hardware.

Since the launch of the Xbox, the Home and Entertainment division has lost over $2 billion, most of that coming directly from losses on the Xbox hardware cost to produce vs. MSRP.

Gates gave everyone the finger, and dumped all his stock?" Imagine what would happen to today's economy if Bill was pissed off enough to dump everything?

Well, the answer to that is simple. The SEC wouldn't let him.

Yes, but this is the Federal Government here we're talking about. All they have to do is come at them with the big guns.

Sigh. Why depend on the Google numbers and anecdotes? Apple itself reports Macintosh unit sales in its SEC filings. Look up the 10-K reports in EDGAR, and compare the Macintosh unit numbers. The Macintosh is not "making headway"; it is not getting significant numbers of switchers or new users.

The Mac has been stuck at 3-and-a-bit million units a year for several years now; in fact, it's only had one year since 1996 where it met or exceeded its 1996 sales.

So Apple has flat sales and declining profits. From a Money perspective, it's clear it's a lousy investment. And after all, the point of Money is to analyze things from the investment end.