Slashdot Mirror
Yahoo Deal Is Big, but Is It the Next Big Thing?
mattsgotredhair brings us a NYTimes article discussing how Microsoft's bid for Yahoo contrasts against one of the core philosophies of Silicon Valley: looking forward. From the Times:
"Microsoft may see Yahoo as its last best chance to catch up. But for all its size and ambition, the bid has not been greeted with enthusiasm. That may be because Silicon Valley favors bottom-up innovation instead of growth by acquisition. The region's investment money and brain power are tuned to start-ups that can anticipate the next big thing rather than chase the last one. 'This is the very nature of the Valley,' said Jim Breyer of the venture capital firm Accel Partners. 'After very strong growth, businesses by definition start to slow as competition increases and young creative start-ups begin to attack the incumbents.'"
Many investors aren't happy.
http://www.bloomberg.com/apps/news?pid=email_en&sid=am1odVZXMwjk
Yahoo is more than a search engine. The search part of the house is much smaller than the other properties.
Slashdot - The great and glorious cluster fuck of Internet wisdom.
It's only dilutive if Yahoo! is worth less than $45 Billion. The drop in the stock price is an indicator that some people think so(especially short term).
They currently have ~$1 billion a month in cash coming in, so even if it is a complete failure, they will have paid for it in a year or three.
Nerd rage is the funniest rage.
Yes, I definitely think that buying Yahoo was a smart move at a great longterm price...
The move was simply them "buying" marketshare in an attempt to trump Google.
Ummm, you are aware that Microsoft has not actually bought Yahoo, right? MS has made Yahoo an offer. Yahoo has not yet responded to that offer.
This guy's the limit!
$1 billion gross - $1.1 billion cost == net loss of $100mil a month, which is what you are finding if you check on their growth charts since 2000.
Only way for your math to work would be for them to cancel all R&D, tech support, and shut down every server, laying off everyone.
Karma Whoring for Fun and Profit.
Where are you getting your numbers? Here are good places to look for the net income for the last quarter and last year:
http://www.microsoft.com/msft/earnings/FY08/earn_rel_q2_08.mspx#income
http://www.microsoft.com/msft/reports/ar06/staticversion/10k_fh_fin.html
I see ~$4 billion for the quarter ~$12.5 billion for the year(2006, they have not reported 2007 yet).
Note that those numbers are after taxes and such, so they are the 'net' numbers, the operating income is somewhat higher.
Maybe you were talking about Yahoo!'s earnings?
Nerd rage is the funniest rage.
Totally agreed. MS is losing its way, and this yahoo deal would be a bad idea, they already have MSN/Hotmail.
This actually smacks of eliminating competition...
Seven Days with Ubuntu Unity
it worked when Microsoft bought Hotmail
Is Microsoft making money off Hotmail? Is Hotmail inducing anybody to buy Windows or Office? If not, it was a waste of money. And I don't think it is: Microsoft lost $77m on MSN in 2006.
Saying that the most wealthy, successful software company in the world is doomed to failure for going against silicon valley reasoning is futile when that's what they've always done and made more than anyone else while doing.
Microsoft is making money with their near monopoly: Office and Windows. Anything else is negligible or a money loser.
http://seattlepi.nwsource.com/dayart/20041022/MicrosoftResults.gif
http://www.newrowley.com/images/blog/2006/msft_profits606.jpg
It's a joke really. Nothing the company is doing is working. Even Xbox only has high revenue because it's subsidized so heavily and the company is bleeding money on it.
Well no, it can't be sustained, but there isn't any intention to sustain it, it was a one time thing to move that money off of their balance sheet.
Anyway, here is a page listing all the dividends Microsoft has paid to shareholders:
http://finance.yahoo.com/q/hp?s=MSFT&a=02&b=13&c=1986&d=01&e=3&f=2008&g=v
There are about 9 billion shares outstanding, and there has been the entire time they have been paying dividends, so we can calculate that they have given ~$40 billion dollars to shareholders since 2003.
Earlier, you complained that their cash on hand went from $50 billion to $17 billion, a decrease of $33 billion dollars, and used that to claim that they were not showing a profit. I am pointing out that they have taken more than that $33 billion off of their balance sheet in a way that is good for shareholders(this is what a dividend does, it transfers assets from the company to the shareholders), so you can't use that number to show that they are doing some sort of tricky accounting.
If you total up their net income over that same period(2003-2006):
http://www.microsoft.com/msft/reports/ar06/staticversion/10k_fh_fin.html
You end up with another $40 billion dollars. So out of $90 billion(your 50 on hand and my 40 in income), it is easy to account for the $40 billion in dividends paid, and the $34 billion that they had in cash and short term assets at the end of fiscal 2006, a total of $74 billion.
That leaves at least $16 billion to figure out what happened to(more if you want to factor in income before 2003), but that's a good deal less than the $40 billion that shareholders got paid(If shareholders had got paid $24 billion, there wouldn't be anything to figure out), so it doesn't demonstrate a loss(just some potential imprudence). It wouldn't be all that shocking for a $200+ billion dollar company to invest $16 billion back in itself over 4 years(or so, maybe more, over a longer period), so I wouldn't sweat it.
What it amounts to is that Microsoft is among the most profitable companies in the world. Their growth is amazing; they add as much new business each quarter as Google is adding in a year, but they are already so big, no one notices.
Nerd rage is the funniest rage.