Microsoft Trumps Google, Yahoo! R&D Budgets

Rob writes to mention a Computer Business Review Online article on Microsoft's commitment to out-spend Google and Yahoo! on innovation in the coming year. From the article: "Microsoft Corp will spend over $1bn on R&D just in its MSN unit, for the fiscal year starting in July, chief executive Steve Ballmer told an audience of would-be advertising customers. The money, part of the surprise spending package that recently gave Microsoft's share price its biggest single-day drop in five years, comes as the company struggles to catch up to Yahoo! Inc and Google Inc in the search and online advertising market."

Comments

What about that other big $$$ project?

[RevDobbs]

Nowadays everybody wanna talk like they got something to say
But nothin comes out when they move they lips
Just a buncha gibberish
And muthafuckas act like they forgot about Vista

ROI?

[gEvil (beta)]

It's nice to know that MS will outspend Yahoo! and Google. However, isn't ROI a more important factor when it comes to things like this? I'm crystal-balling that MS will have the lowest ROI of the three over the next few years.

Re:ROI?

[Herkum01]

If you also notice, they are going to double spending from $500~ million on MSN to $1 Billion. I don't know many companies that believe they improve their performance just by doubling their budget. After you take into account just trying to rearrange the organization to accomodate that amount of growth can take several years.

This is just another organization that believes that if they throw enough money at a problem it will fix anything.

If you are a stockholder you are in for a wild ride for the next couple of years. Unlike a real rollcoaster, I would get sick from all the ups and downs!

Re:ROI?

[jo42]

Bigger Budget != Better Product

Re:ROI?

[tomhudson]

Poster wrote:

This is just another organization that believes that if they throw enough money at a problem it will fix anything.

Balmer believes if he throws enough chairs at a problem it will fix anything.

Microsoft Corp will spend over $1bn on R&D just in its MSN unit

That's a lot of chairs ... anyone buying stock in office furniture supply companies?

Re:ROI?

[mschaef]

This reminds me of an exchange between Thomas Watson of IBM and Seymour Cray of CDC:

"Last week Control data... announced the 6600 system. I understand that in the laboratory developing the system there were only 34 people including the janitor. Of these, 14 are engineers and 4 are programmers.. Contrasting this modest effort with our vast development activities, I fail to understand why we have lost our industry leadership position by letting someone else offer the world's most powerful computer." - Watson

"It seems like Mr. Watson has answered his own question." - Cray

It looks like that might happen again...

1bn dollar on search-based advertising?

[pimpimpim]

Maybe they should first optimize the search, and then optimize the advertizing. It doesn't work the other way around, as people don't use search engines for the ads that are there.

As long as google's search engine is better, everyone will search there. On the other hand google's search engine is still far from flawless, so msn could do a nice job if they improved on that. When people will have an actual reason to use MSN search, advertizers will have a reason to get their ads there.

Outspend... on innovation...

[Colin Smith]

So who're they going to buy to get their innovation from then?

Rushes to set up a company "CS Innovation Ltd". A mere snip at $20 million.

Common misconception

[jarek]

It is not the number of heads you hire that makes the difference, it's the creativity of each individual that counts. Common view by CEO's is that a certain problem requires so and so many people wich have a given set of buzz words on their CV.
If fact, what you need is to identify the creative (and unique) individuals and it does not matter how many people you have hired unless there is process in place in the company that identifies those individuals and gives them the lead.

Yes, the cat got my tongue...

[Savage-Rabbit]

Microsoft Corp will spend over $1bn on R&D just in its MSN unit, for the fiscal year starting in July...

That is an impressive figure to be sure but I still think it isn't enough to acheve world domination, why MS can't even develop a sealth fighter for that price let alone a whole fleet of Borg cubes fully armed, warp capable and sporting a giant Windows logo on each side.

Mythical man money?

[gstoddart]

Is this a case of Microsoft assuming they can throw vast amounts of money at any problem and solve it better than other people?

I mean, nine women can't have a baby in one month. Maybe, just maybe, the reason why Google is out innovating them is they either have smarter people, better development practices, or don't have a bunch of historical baggage of other products they need to slavishly support.

I guess from Microsoft's perspective, it's good to spend money on R&D. Hopefully they'll make better products, and at a minimum they'll probably get to write it off on their taxes.

In the long run though, I wonder if Google won't simply out-do them with fresh thinking, new ways of doing things, and a completely different business model than Microsoft. This may not simply be a matter of keep throwing vast amounts of money at the problem until it becomes easier.
    This may require some more fundamental changes.

Outspend?

[19061969]

They'll do even better when they start out-thinking their competitors.

They've been outspending Apache for years in the webserver market. What are their respective market shares again?

Re:from the

[TheJediGeek]

Is that the problem or the money that goes away?

Yes.

Microsoft R&D == Roach Motel

[Eponymous Coward]

I've heard MS Research described as a roach motel. They employ *lots* of extremely talented people. But it seems that once they check in, they never check out. You see them at conferences and the odd paper trickles out, but they definitely tend to drop off the radar.

I've always wondered what happens to these formerly incredibly productive people. Are they stuck in bureaucratic hell? Are they working on stuff so far into the theoretical that products are years off? Or is it the ultimate cushy job and they just get fat drinking free snapple behind their closed door?

It's true they do surface from time-to-time (like Anders Hejlberg) so you know they are working on something, but this happens so rarely you have to wonder what the hell is going on in there. Why do they get such a lousy return from their huge R&D budget?

-ec

Re:They just don't get it

[Haeleth]

To-date, Microsoft's search results on Linux are way biased toward switching to them.

This is demonstrably false. To test it, I entered "linux" into search.msn.com and into google.com.

MSN's first page of results: linux.org, linux.com, kernel.org, Wikipedia's Linux article, Gentoo, IBM's Linux portal, Debian, Red Hat.
Google's first page of results: linux.org, Debian, linux.org.uk, kernel.org, Ubuntu, Mandrake, linux.com, Gentoo, Red Hat, Linux Format.

Pretty similar stuff. The fun is in the sponsored links.

MSN's sponsored link at the very top of the search results: Linux webhosting from webhosting.net.
Google's sponsored link at the very top of the search results: www.microsoft.com/getthefacts.