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A Former Microsoftie Forecasts Microsoft Doom
Chris Holland writes "Jeff Reifman, a columnist for Seattle Weekly, has written a toe-curling editorial analysis of Microsoft's past and current missed opportunities, contrasted with its financial success, while covering in fair depth some of the most serious threats to their business model. Beyond the many choice quotes, I've found this article to be a very interesting read from somebody who has not only been on the inside, but also significantly developed his professional career thru Microsoft solutions."
Revenue is what you take in. Income is what you keep. (AKA profit) Gives you a clue as to what their markup is (:-0)
Synchronization of our Internet bookmarks across all our computers
Firefox has an extension which does this very thing. Look for "Bookmarks Synchronizer" on the main extensions page.
Trolling is a art,
Because you don't pay Income Tax on your gross sales (revenue), you pay it on your net profits (income). So when companies are looking for write-off's, it means they are trying to find ways to reduce their net profits on paper, so as to to pay less taxes.
> By "Income" does he mean "Profit" or is MS actually predicting
> a 50% revenue drop over the previous year?
Revenue is the amount of money you bring in due to products that you sell. This normally does not include money from investments and selling plant, property, and equipment (PP&E). So if you sell 1 product for $1, but you sell a building you don't use any more for $1M, your revenue is only $1.
Income is the amount of money left over after all expenses. The first expense is cost of goods sold (this means the cost of the actually sold unit). For software, this is nearly 0. Money left over after the COGS is your direct margin. For Microsoft, I believe this is something like 90+% (but I'm too lazy to look up their income statement at this time)
After that, you subtract off the other expenses, like R&D (this includes software engineering and the like), sales general and administrative (SG&A--including marketing weasels, such as myself), and interest payments (e.g. long term debt).
Whatever is left over is your net income. Here's a simplified example:
INCOME STATEMENT
Revenue
(cost of goods sold)
----------------
Direct Margin
(R&D)
(SG&A)
(Interest Expense)
----------------
Net Income
So Income is your bottom line. If the number is positive, then profit! That means the standard Slashdot cliche becomes:
1. Make revenue from a product or service
2. Minimize your expenses
3. Profit!
What's interesting about Microsoft is they are one of a very small number of companies with NO long term debt (Apple, I believe, just joined this exclusive club). That makes MSFT's balance sheet fairly impressive to look at.
Insert simplistic political, ideological, or personal proselytization here.
It's because sometimes the cost of not having something now (this includes lost profits) is greater than the cost of interest payments.
Here's a simple example: suppose you have several job offers and the highest-paying offer requires that you have a car, but you do not own a car yet and do not have enough cash to afford one. Your choices are to either to borrow money to buy a car or to take a lower paying job. If the difference in pay between the best job and the second best job is greater than the cost of the interest on the car, then the best (fiscal) decision is to borrow the money for the car and take the best paying job.
My only political goal is to see to it that no political party achieves its goals.