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Microsoft Revenue Up, Tries to Hook Third World

Posted by ryuzaki0 on from the one-born-every-minute dept.

rocketjam writes "Microsoft reported record revenue for the last quarter Thursday due to increased sales of personal computers. Analysts were impressed with the company's overall performance, however they expressed concern about the continuing drop in unearned revenue, reflecting Microsoft's difficulty in signing up customers for long-term, sustainable business contracts. The $400 million drop in unearned revenue was less than the drop in the last quarter but still exceeded many analyst's expectations. The company's continuing problem in gaining long-term contracts is generally attributed to growing security concerns among customers and company's unwillingness to go along with Microsoft's 'Software Assurance' upgrade subscription plan." Also in the news: Microsoft is donating a pile of software to the United Nations -- retail value, $1 billion; wholesale value, maybe $1 million or so -- attempting to hook the Third World on Microsoft software.

5 of 489 comments (clear)

  1. Come on, Michael... by grub · · Score: 5, Insightful


    Mikey adds " .. retail value, $1 billion; wholesale value, maybe $1 million or so "

    Do you have any real data to back this up, Michael, or is this yet another of your unnecessary and unwanted biased editorials? Not that I'm in the pro-Microsoft camp but a 1000-to-1 profit line sounds pretty high. This is shoddy "journalism".

    Feel free to bitch slap me and any subsequent thread.

    --
    Trolling is a art,
  2. "Hook" by Anonymous Coward · · Score: 5, Insightful

    attempting to hook the Third World on Microsoft software

    While I'm an avid Linux fan, why do I get the feeling that if a large Linux distributor like Red Hat arranged for a glut of software to be sent to UN countries, the headline would have been slightly more flattering? Something like "generously supplied Third World coutries with Linux software" instead of the negative connotations implied with "hook" that is attached to Microsoft's gesture.

  3. Definition of Unearned Revenue by RazzleFrog · · Score: 5, Informative

    For those of you who are not accountants:

    Unearned revenue is actually not a P&L item. It is a liability on a companies Balance Sheet. If I prepay for a service the company has to recognize that revenue over the life of the service. So if I pay for a years worth of service from Microsoft for $12,000 they can recognize $1000 each month as revenue and reduce the liability by $1000 until the 12 months are up and the $12,000 has entirely hit the P&L.

    The decrease in unearned revenue means that people aren't locking themselves into Microsoft but it doesn't reflect at all on what Microsofts future revenue will be. If anything companies that do end up sticking with Microsoft may pay more in the long run by not taking advantage of prepayment discounts.

    And yes - I am CPA.

  4. It's like this.. by loconet · · Score: 5, Insightful

    A friend of my put it best ..

    "In other news, crack dealers give first hit of crack for free to kids"

    --
    [alk]
  5. Are taxpayers donating to Microsoft? by Anonymous Coward · · Score: 5, Interesting

    Maybe an accountant can answer this question:

    How much does Microsoft get to declare as a tax deduction when it donates software?

    For example, say Microsoft donates a CD, and that CD cost $1 to manufacture, but it contains software that normally retails for $100.

    What does Microsoft get to deduct for their charitable donation? Is it $1? $50? $100?

    If it is anything more that $1, then Microsoft is making a profit. In effect, money would be being transferred from other taxpayers to Microsoft.