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Motley Fool Writes Off Microsoft
The Vista disaster has caught Wall Street's attention before but I've never seen the popular press understand the issues like this argument in the Motley Fool. The opposing argument is a weak statement of faith, essentially "as it was in the beginning is now and forever shall be." "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."
MSFT shares are up 3% today after another strong rise yesterday, after announcing their financial results and outlook.
Here's hoping HD DVD's troubles means that they'll remove all the "secure path" BS from Windows 7. They only did it to placate Hollywood, and it's a major reason why Vista had developmental problems. (Note, they'd have had to do it too if they were supporting Blu-ray instead - the point though is that I'd like to see Microsoft throw a tantrum and remove a "feature" they should never have added in the first place.)
You are not alone. This is not normal. None of this is normal.
AP
Microsoft Tops Street in 2Q; PC Sales Up
Friday January 25, 9:45 am ET
By Jessica Mintz, AP Technology Writer
Microsoft Beats Street in 2nd Quarter; Vista, Office, Xbox Games Helped
SEATTLE (AP) -- Microsoft Corp. forecast a rosy 2008 -- despite broader economic worries -- after it blew by Wall Street's expectations for a second consecutive quarter.
"We will be impacted just like everybody else," if the U.S. falls into a recession, Chief Financial Officer Chris Liddell said Thursday. "But overall, we feel very optimistic about our second half."
Company officials touted rising sales in each of Microsoft's business divisions, a slate of important upcoming business-software launches and the growing contribution from sales in non-U.S. markets.
Microsoft raised its outlook Thursday for the rest of its fiscal year, which ends in June, matching Wall Street's forecast and sending shares up in after-hours trading.
The software maker's quarterly earnings jumped 79 percent to $4.71 billion, or 50 cents per share, from $2.63 billion, or 26 cents per share in the second quarter a year earlier. Quarterly revenue climbed 31 percent to $16.37 billion from $12.5 billion.
What part of Microsoft's record earnings yesterday did Slashdot seem to overlook? I think the joke is on us.
http://www.news.com/8301-13860_3-9857633-56.html?tag=newsmap
'Mötley Crüe Writes Off Microsoft'
Gonna be a long day...
This is especially clear now that Windows 7 is on the horizon. And if MS can survive ME, it can survive anything.
But people failed to beat a path to the PS/2; they waited, and used things like EISA until PCI came along and was roughly as good as Micro Channel. IBM finally learned that they didn't own the PC market anymore.
IBM's still around but isn't a colossus astride the computing industry. Microsoft has now discovered that the competition is "good enough" and the Microsoft name isn't enough to force people to follow along with whatever they say. Like IBM, MS isn't going away... but they'll be one option among many in a few years, not the single dominant giant.
PHEM - party like it's 1997-2003!
There is a corresponding Bull Argument that argues the Counterpoint - each with its own rebuttal of the other argument.
/.!
So much for Motley Fool writing off Microsoft. Typically - guess which article gets highlighted in
But it's in the first article, not the second.
ZOMG, people are specifying XP instead of Vista! Sure, but they're still buying Microsoft. Apple is topping out its niche appeal, and corporations are run by lawyers who hate and fear Google Docs with a cold reptilian passion.
Wise up, nerds. Major purchasing decisions are not taken by people live with their parents in Wyoming. They are taken by grown ups who have mortgages and orthodentist bills to pay, and those people recommend, and will continue to recommend, Microsoft because nobody ever got sacked for doing so.
The upcoming recession may see a few smaller outfits switch to freeware in the hope of chiselling a few dollars off the budget, but that's probably a sign that they're doomed, and so wouldn't have been buying M$ one way or the other.
Still, I'm swimming against the tide of opinion here, if not of history, so feel free to get excited about the prospect of the Evil Empire toppling any day now. Let's compare notes in 5 years and we can spot where you went wrong.
If you were blocking sigs, you wouldn't have to read this.
Notice a trend? It would seem that MS' me-too policy (Xbox, Zune, live search, etc.) over the last couple of years has been pretty hard on their cash reserves. I think if they can turn a profit on these things it will have been worth it because $60 billion of cash reserves sounds like too much.... but if that trend continues, we'll see MS in debt by the time the coming recession is over.
Gentlemen! You can't fight in here, this is the war room!
Maybe Bill Gate's smartest move was knowing when to leave.
OK, I'm old enough to have been in this industry when IBM were as dominant as Microsoft are now. We didn't see them start to slide, either. We were only aware that IBM were falling when their decline was already well advanced and unstoppable. I think we're in that position with Microsoft now. Why?
We're heading for a recession. The rebuttal to the FA says:
That's true, of course. But GE's customers can't download an open source aircraft engine for free. Also, and significantly, aircraft engines wear out. If the airlines want to keep flying at all, they have to continue to buy spare parts, sub-assemblies, refurbished engines and, from time to time, new engines. No matter how tight the economy gets, unless all GE's customers go belly up, they will have to continue to buy parts - and GE can at least hope to get some of that business.
As the economy tightens up, one of the things that happens is people start looking at where they can save some money. Software does not wear out. Software carries on working just as well as it did when it was new, until the hardware platform which supports it wears out. And even then, it can usually be transferred to a new hardware platform. So as the economy tightens up, people simply stop buying new software. Where's the need to upgrade, when the software you have works acceptably well?
There are fewer reasons to buy software in a recession, anyway. The total number of seats is not increasing - most companies will be laying off staff. And hardware upgrades which had been planned will be put off, so there will be no need to buy software for new hardware...
And if people have to get new software for one reason or another, for every significant profitable product in Microsoft's inventory, there's a free alternative. Not 'cheap', free. Usually, of as high quality as the Microsoft product or higher. Increasingly, as easy to use as the Microsoft product. The tighter the economy gets, the harder it becomes to justify choosing 'expensive' over 'free'. Furthermore, unlike GE's competitors, Microsoft's free competitors are not subject to the normal rules of the financial market. they can't go bankrupt. The recession will not hurt them much - it is more likely to help them.
I won't hide the fact that I think it's bad for this industry to have one dominant player, be that IBM, Microsoft or Google. I didn't mourn IBM's fall and I shan't mourn Microsoft's. But I don't think you can any longer pretend it isn't happening.
I'm old enough to remember when discussions on Slashdot were well informed.
BTW, the XBox portion of MS (the games division) -has- stopped hemorraging cash.
http://games.slashdot.org/article.pl?sid=07/10/26/2052251
http://xbox360.ign.com/articles/847/847658p1.html
Yes, 2 quarters in a row now, it has turned a profit.
"If you make people think they're thinking, they'll love you; But if you really make them think, they'll hate you." - DM
Motley Fool: Bring out your dead!
Gearoid_Murphy: Here's one.
Motley Fool: Ninepence.
Microsoft: I'm not dead!
Motley Fool: What?
Gearoid_Murphy: Nothing. Here's your ninepence.
Microsoft: I'm not dead!
Motley Fool: 'Ere. He says he's not dead!
Gearoid_Murphy: Yes, he is.
Microsoft: I'm not!
Motley Fool: He isn't?
Gearoid_Murphy: Well, he will be soon. He's very ill.
Microsoft: I'm getting better!
Gearoid_Murphy: No, you're not. You'll be stone dead in a moment.
Motley Fool: Oh, I can't take him like that. It's against regulations.
Microsoft: I don't want to go on the cart!
Gearoid_Murphy: Oh, don't be such a baby.
Motley Fool: I can't take him.
Microsoft: I feel fine!
Gearoid_Murphy: Well, do us a favour.
Motley Fool: I can't.
Gearoid_Murphy: Well, can you hang around a couple of minutes? He won't be long.
Motley Fool: No, I've got to go to Sony's. They've lost nine today.
Gearoid_Murphy: Well, when's your next round?
Motley Fool: Tuesday.
Microsoft: I think I'll go for a walk.
Gearoid_Murphy: You're not fooling anyone, you know. Look. Isn't there something you can do?
Microsoft: [singing] I feel happy! I feel happy!
Apologies for spamming you with this Monty Pythin troll.
-mcgrew
mcgrew's razor: Never attribute to stupidity that which can be explained by greedy self-interest
I doubt Vista is a huge flop or a tremendous success.
What's much more interesting is the cash reserves. Dropping by over $10 billion per year? Really?! Are those numbers accurate?