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Microsoft To Buy Back $40bn of Its Shares

phantomflanflinger writes "As you may have heard already, Microsoft have announced their intentions to buy back $40 billion in stock from their investors, in the biggest single buy-back plan in business history. The announcement has given Microsoft shares a small gain but they still stand significantly below their level in January — before Microsoft's unsolicited bid for Yahoo!. The announcement of the plan has also created new speculation about a now-or-never deal with Yahoo!."

345 comments

  1. BUY BUY BUY! by davidangel · · Score: 4, Funny

    ...a mac. right now.

    1. Re:BUY BUY BUY! by sadgoblin · · Score: 2, Funny

      I'd respond, but I'm more mature than you.

    2. Re:BUY BUY BUY! by davidangel · · Score: 1, Informative

      Nice response.

    3. Re:BUY BUY BUY! by Achromatic1978 · · Score: 1, Informative
      You have all the logic of... well, god only knows what.

      "Desktop computers and office business model from the 80s won't survive a recession/depression", the same way they didn't survive the dot com crash, or Wall St crash, right?

      "Advertising will" - advertising for what? All the businesses that aren't surviving the recession/depression?

      You live a sad sad life, twitter.

    4. Re:BUY BUY BUY! by elrous0 · · Score: 2, Informative

      Thanks to bootcamp and Intel chips, Mac and Windows are no longer exclusive.

      --
      SJW: Someone who has run out of real oppression, and has to fake it.
    5. Re:BUY BUY BUY! by V!NCENT · · Score: 1

      Don't you even dare to considder anything besides Linux, FreeBSD, NetBSD, OpenBSD and DragonBSD you anti-open sourcer!

      Burning thou shallt, in the fires of hell!

      --
      Here be signatures
    6. Re:BUY BUY BUY! by Foofoobar · · Score: 2, Funny

      Yeah, you can now install Vista on your Mac and get all those nifty viruses you've been missing out on!!

      --
      This is my sig. There are many like it but this one is mine.
    7. Re:BUY BUY BUY! by mrchaotica · · Score: 5, Funny

      FreeBSD, NetBSD, OpenBSD and DragonBSD

      It's funny how you couldn't just say "BSD" because then you'd be including Mac OS X too.

      --

      "[Regarding the 'cloud,'] ownership was what made America different than Russia." -- Woz

    8. Re:BUY BUY BUY! by abigor · · Score: 1

      OS X isn't really BSD, so he's fine. And the parts of OS X that are derived from BSD are open anyway.

    9. Re:BUY BUY BUY! by ejdmoo · · Score: 4, Informative

      Seriously though, my MacBook Pro is one of the best Windows machines I've ever used, simply because the hardware support is dead simple. The drivers are solid, and I can download them from one place.

    10. Re:BUY BUY BUY! by Anonymous Coward · · Score: 0

      Yes, they make fine Windows machines. And you can boot into OS X when you get home. :-)

      I've been using VMware Fusion to create and test a Debian live cd on the weekends.

    11. Re:BUY BUY BUY! by falconwolf · · Score: 1

      ...a mac. right now.

      Actually from an investment position it's a good idea to by MS stock. If MS follows through and buy back some of it's stock the stock price should rise. You may then make enough to buy a Mac.

      Falcon

    12. Re:BUY BUY BUY! by Patchw0rk+F0g · · Score: 2, Funny

      I'd respond to your response, but that would just be tautologically wrong...

      --
      When the going gets weird, the weird turn pro. ~~ Hunter S. Thompson
    13. Re:BUY BUY BUY! by elrous0 · · Score: 1, Informative

      And for the first time in decades, you can play some decent games on a Mac.

      --
      SJW: Someone who has run out of real oppression, and has to fake it.
    14. Re:BUY BUY BUY! by Shakrai · · Score: 2, Insightful

      Macs may be the best Windows PC but all installing Windows does is install crapware. After buying and using Windows PCs for more than 10 years I finally got too aggravated with them and bought the MacBook Pro I'm typing this on last year.

      So you replaced one proprietary system with vendor lock-in with another?

      --
      I want peace on earth and goodwill toward man.
      We are the United States Government! We don't do that sort of thing.
    15. Re:BUY BUY BUY! by molarmass192 · · Score: 1

      OS X is based on FreeBSD, but that's primarily outside the kernel. However, Darwin is open source, so it's not "anti-open source". :P

      --

      Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws-Plato
    16. Re:BUY BUY BUY! by electrictroy · · Score: 1

      Never say never, no not in nary a way nor shape nor form.

      --
      The government is not your daddy. Its purpose is not to raid middle-class neighbors' wallets and give it to you.
    17. Re:BUY BUY BUY! by V!NCENT · · Score: 1

      Well I couldn't say "anti free softwarer" because that sounded like crap, just open source because the Mac OS X kernel is open source or *BSD because Mac OS X is somewhat like a BSD :)

      --
      Here be signatures
    18. Re:BUY BUY BUY! by wastedlife · · Score: 1

      After buying and using Windows PCs for more than 10 years I finally got too aggravated with them and bought the MacBook Pro I'm typing this on last year.

      Wow, Macs really must pretty advanced if you can reply to this Slashdot thread last year.

      --
      Said, "It's just like dice but it's got more sides And it tells me who lives and who dies"
    19. Re:BUY BUY BUY! by Foofoobar · · Score: 1

      I've been playing all the games on Windows for Mac for years WITHOUT Windows. The same way I do with Linux. I use Cedega. I get a better framerate, can overclock the games easily and can often customize them to see through walls and other neat things. :)

      I still love hearing that old propaganda though about no games. Makes me and the thousands that play Warcraft on their Macs laugh and laugh and laugh.

      --
      This is my sig. There are many like it but this one is mine.
    20. Re:BUY BUY BUY! by falconwolf · · Score: 1

      So you replaced one proprietary system with vendor lock-in with another?

      I'm not locked into anything. If I want to I can install Ubuntu, which I was planning on at first, or another Linux distro. I'm typing this in a Firefox tab. My office suite is NeoOffice, the original native Mac port of Open Office. I also have other open source programs installed. Because I installed Fink and MacPorts I can install a lot of software for Linux. I can install Debian packages using .deb or apt-get as well as packages using Redhat's .rpm. And if I need to, though I haven't yet, I can get and install Cross Over for Macs so I can run Windows software.

      Fact is is a Mac can run more software than any other OS/hardware combination. And don't try to say Macs are more expensive either. Macs have not been more expensive than Windows PCs in years. Actually before I got mine, I compared it's price to prices of Windows laptops that had similar configurations. Most OEM PC were about the same price, though some cost more. Dell's was about $200 more.

      Hardware wise my laptop isn't any more vender lockin than a Windows laptop either. I'm still using the same router I got for my Windows PC, then used with my Linux PC, and am now using with my Mac. My Epson scanner works fine with it as does my Iomega external drives and my Canon printer.

      Falcon

    21. Re:BUY BUY BUY! by badkarmadayaccount · · Score: 1

      quartz isnt, so it pretty much is antiopensource. Ever heard of a darwin powerd router?

      --
      I know tobacco is bad for you, so I smoke weed with crack.
  2. $40,000,000,000 by Tubal-Cain · · Score: 4, Interesting

    Isn't that almost all of their spare cash?

    1. Re:$40,000,000,000 by mpapet · · Score: 5, Informative

      Not really. They allocate that much over the length of the project and spend it over a period of a few years.

      This is generally viewed as the company believing they are under-valued. It's a great time to "buy low" so they can sell them later at a higher price and keep the spread.

      Also generally speaking, there's a bit of wealth destruction going on when a company does this because the premium for shares rises over the course of the buy-back.

      It's also worth noting they've increased their dividend so investors are getting impatient with all of the cash they have laying about a couple of different ways.

      --
      http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html
    2. Re:$40,000,000,000 by yerpo · · Score: 1

      Well, they are giving it to themselves, so no fuss there :P

    3. Re:$40,000,000,000 by Colin+Smith · · Score: 0, Offtopic

      It's also putting all your eggs in one basket, so a single really big problem (like Linux, Open Document Format, or Google) could wipe out virtually all of your money at once.

       

      --
      Deleted
    4. Re:$40,000,000,000 by Penguinisto · · Score: 3, Informative

      If they blew it all right now, it'd be 2x their available cash.

      OTOH, they'll more likely spread it over a few years, and skim it off the top of inbound money.

      In fact, IIRC they just got done with something similar, and that this is just pretty much a new iteration of that (which probably explains why Wall Street collectively yawned in its direction yesterday).

      /P

      --
      Quo usque tandem abutere, Nimbus, patientia nostra?
    5. Re:$40,000,000,000 by MightyYar · · Score: 3, Insightful

      It's also putting all your eggs in one basket,

      Yeah, but MS isn't a mutual fund - they should concentrate on making good (or at least profitable) products and not worry about investing. As a stockholder, YOU should be the one diversifying - not MS. And the simpler they keep their business plan, the easier that is for you.

      --
      W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
    6. Re:$40,000,000,000 by Tubal-Cain · · Score: 1

      If you buy MS stock, you can't do much to increase its worth. But MS, they have the means to improve its value.

    7. Re:$40,000,000,000 by Anonymous Coward · · Score: 0

      ....
      Are share buybacks good or bad? As is so often the case in finance, the question may not have a definitive answer. If a stock is undervalued and a buyback truly represents the best possible investment for a company, the buyback - and its effects - can be viewed as a positive sign for shareholders. Watch out, however, if a company is merely using buybacks to prop up ratios, provide short-term relief to an ailing stock price or to get out from under excessive dilution.

    8. Re:$40,000,000,000 by NatasRevol · · Score: 1

      It means that the company can't think of anything better to do with it's cash than put it into stock, which is usually doing very poorly.

      If they can't come up with better investments/research/technologies to put their money in, then I'd avoid the stock like the plague.

      That's the reason growing, healthy companies rarely do buybacks.

      --
      There are two types of people in the world: Those who crave closure
    9. Re:$40,000,000,000 by Intron · · Score: 4, Interesting

      1. Announce plan to buy Yahoo!
      2. Watch stock plummet
      3. Buy back $40bn
      4. Profit. Yahoo!

      --
      Intron: the portion of DNA which expresses nothing useful.
    10. Re:$40,000,000,000 by Reziac · · Score: 1

      So my small bit of M$ stock should go up in value, yes?

      When I bought it, it was doubling and splitting regularly, and was a good investment; along came XP and activation and M$'s stock went flat and has stayed that way ever since. I'd like to see it earn its keep again for a while before I sell it.

      --
      ~REZ~ #43301. Who'd fake being me anyway?
    11. Re:$40,000,000,000 by gbjbaanb · · Score: 4, Funny

      so therefore.... they should invest that $40bn in something like Linux, Open Document Format, or Google...

      wow.. that chair nearly hit me, where did that come from?

    12. Re:$40,000,000,000 by zubikov · · Score: 5, Informative

      Actually it demonstrates that your company is in great shape; so great that you think your own shares are cheap and you want a piece of the action. Getting money from stock is not the only way that companies fund their operations. There's cash, bonds, etc...comprende?

    13. Re:$40,000,000,000 by McBeer · · Score: 0

      Mod parent overrated. Mod grandparent insightful.

      Microsoft is a corporation whose purpose is to increase wealth for its shareholders. If it does not issue dividends or increase the value of it's outstanding shares, it is not serving its purpose.

      Companies should stick to their core competencies. Microsoft is a not an investment company. It should increase the wealth of its shareholders by doing what its good at (software) so they can invest in the next big thing. Boneheaded investments in "the next big thing" (*cough*ebay/skype*cough cough*) are usually poorly received in the investment world.

      --
      Hikery.net - The best hiking site ever. Made by yours truly.
    14. Re:$40,000,000,000 by Korin43 · · Score: 1

      Or in means that M$ in confident in it's future. I think I'd prefer to invest in something I controlled.

    15. Re:$40,000,000,000 by uncqual · · Score: 5, Insightful

      It's not always the case that putting more money into your core business gives the best return to your owners (shareholders). There tend to be levels of diminishing returns - the first billion dollars of investment often returns more than the tenth billion dollars of investment does. In particular, this is likely to be true in a business that relies more on IP which is "develop once, sell N times at minimal incremental cost" than, for example, manufacturing where as long as there is persistent unmet demand for the products, investing more in production likely is a good use of cash. Cash is like drinking water -- you need enough, but vast quantities are of minimal additional value and it can become a distraction to figure out how to dispose of it efficiently.

      If I were a Microsoft shareholder, I'd much rather see excess cash returned to the owners (shareholders) than invested in unrelated things (like sub-prime mortgages!) in which Microsoft has no need for expertise except to invest their spare cash. In this case, I'd rather diversify my own portfolio through pure plays rather than through muddled investments in what is supposedly a software company but which in fact is more of an investment company. So, I'd like the cash returned to me - the most obvious ways are through dividends or increased stock valuation via buybacks.

      Obviously, if the buyback leaves Microsoft cash starved so they later had to borrow money for new development and operations, the buyback would likely (although, not necessarily) have been a Bad Idea. However, if this were to happen, the problem would have been that the board was stupid, not that a buyback authorization was a bad idea since I believe this buyback is at the discretion of the board and they may not buy back a single share.

      A buyback can be an effective way to return tax advantaged assets to investors. First, there have been many times when what are now called "qualified dividends" were taxed at ordinary income levels while capital gains were taxed at lower levels - and "tax reform" seems much more likely to repeal preferential tax treatment of "qualified dividends" while retaining some preferential treatment for capital gains than doing the inverse - so it's best to bet on capital gains rather than qualified dividends. Second, dividends are taxed in the year they are paid out - so in order for a long term investor to compound gains, they would have to infuse more outside cash with the "pay dividends" strategy (to cover the taxes paid prematurely on dividends) than to simply "buy and hold" a block of stock for many years and let it increase in value, in part, as a result of buy back rather than dividend payments.

      --
      Why is there an "insightful" mod and why isn't it "-1"? If I wanted insight, I wouldn't be reading /.
    16. Re:$40,000,000,000 by Anonymous Coward · · Score: 0

      like the Internet, AI, or...

      Who the fuck's Al?

    17. Re:$40,000,000,000 by Anonymous Coward · · Score: 1, Interesting

      That's about the stupidest thing I've ever heard. Companies don't survive today to deliver shareholder value year over year unless they diversify both their product portfolios and sales regions. Its a simple fact, big companies weather financial difficulties much better. I work for a fortune 100 company that has 3 major divisions in 150 countries with a very diverse product portfolio.

    18. Re:$40,000,000,000 by amorsen · · Score: 2, Interesting

      So my small bit of M$ stock should go up in value, yes?

      Not necessarily. You'll end up with a larger slice of a smaller pie. Your stock changes value only if "the market" decides the buyback is a particularly good or bad idea.

      --
      Finally! A year of moderation! Ready for 2019?
    19. Re:$40,000,000,000 by Anonymous Coward · · Score: 0

      There seems to be some disconnect here: You assume that "investing" and "Making profitable products" are separate goals, rather than aspects of "Make profit", the actual intent.

    20. Re:$40,000,000,000 by mattack2 · · Score: 1

      So then Nintendo should have stayed as a playing card company?

    21. Re:$40,000,000,000 by the_B0fh · · Score: 1

      Well, no. Clearly they should have an online website with playing cards that you can, uh, play with.

    22. Re:$40,000,000,000 by DECS · · Score: 5, Insightful

      No, spending your capital to buy back stock indicates that you have no ideas for using that capital to build your business, and are instead converting it into value for shareholders (the opposite of diluting your stock by creating new shares).

      Essentially, Microsoft is doing what Dell thought Apple should have done ten years ago: shut things down and give the money back to shareholders.

      If Microsoft had any implementable ideas, it would be using that $40 billion to make more money, just like Apple has used its capital to rapidly expand its business while earning more cash on hand. Apple isn't buying back its stock because it thinks it can make more for investors building new business than it can by simply giving the money back.

      Google's Android Platform Faces Five Tough Obstacles

    23. Re:$40,000,000,000 by rdavidson3 · · Score: 0

      Are they buying back stock just to sell it later at a higher price OR are they buying back stock and writing it off the books?

    24. Re:$40,000,000,000 by Anonymous Coward · · Score: 0

      This isn't "wealth destruction" at all. In light of the current economy, I would say it makes Microsoft one of the safest investments around.

      Gone are the days when "leveraged debt" made a company look good. The "new" measure of stability are cash on hand and low, or no, debt.

      If Microsoft thinks their company is worth putting $40 billion of their OWN money into, it sounds like a safe bet their finances are sound and their future bright. You didn't see conservative Republicriminals putting money into Bear Sterns or Enron before it collapsed (they left that all to taxpayers... after the collapse).

      I had my 401k lean heavily on Bershire Hathaway. I'll be adding gold and Microsoft to the mix now.

      And your comment about dividends shows you know very little about finance. While a dividend can be nice, I'd rather see a company reinvest that money back into the business. Or, as is the case in Microsoft, they can do both.

    25. Re:$40,000,000,000 by Abreu · · Score: 5, Insightful

      Please do not tell moderators what to do.

      If you disagree with a poster, you should just respond to the post and explain your point of view.

      This is a discussion forum, for crying out loud!

      --
      No sig for the moment.
    26. Re:$40,000,000,000 by geekoid · · Score: 1

      Or you want other people to think that.

      --
      The Kruger Dunning explains most post on /. http://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect
    27. Re:$40,000,000,000 by Anonymous Coward · · Score: 0

      The only reason you're asking that is because you were downstairs fucking with your computer while he was upstairs fucking with your mom.

    28. Re:$40,000,000,000 by mollymoo · · Score: 4, Informative

      If Microsoft had any implementable ideas, it would be using that $40 billion to make more money, [...]

      I think it's much more likely that Microsoft has implementable ideas, they just don't need all of that $40bn to implement them. They're absolutely rolling in cash. They can easily implement all the good ideas they have, many of the bad ideas and many of the pie-in-the-sky ideas and still have $40bn spare. I imagine it must actually be pretty hard to spend $40bn and make a profit with the resulting business. No tech industry in the history of the world cost anything like that much to set up. They'd have to burn money at XBox rates on half a dozen projects and I just don't think there are that many markets big enough to justify that kind of investment.

      --
      Chernobyl 'not a wildlife haven' - BBC News
    29. Re:$40,000,000,000 by bogjobber · · Score: 1

      Apple isn't buying back its stock because it thinks it can make more for investors building new business than it can by simply giving the money back.

      Apple also doesn't have $40 billion in cash. Microsoft is already spending plenty of money on R&D and marketing, it's not like they're cutting this amount from those budgets. They've determined that the money will be better put to use this way. I'm inclined to believe them until they're proven otherwise, especially with the markets looking the way they are currently.

    30. Re:$40,000,000,000 by khuber · · Score: 1

      Insightful? 8.5% of Microsoft's income in 2007 was from investments. Do you think big companies keep their cash under a mattress?

    31. Re:$40,000,000,000 by DECS · · Score: 4, Insightful

      Pundits like to point out that Apple has 5% of the PC market. Yet Apple is sitting on $20 billion in cash.

      No, Apple isn't blowing billions on products that don't work, it's turning that capital over to earn more.

      Now, name implementable ideas Microsoft has rolled out lately. There's certainly nothing at all in consumer electronics. It only barely started breaking even on Xbox sales after having blow billions to develop it, and the 360 is now reaching its end of life and sales are rapidly tapering off. That's Microsoft's BIG SUCCESS! Everything else is in flames: Windows Mobile, Windows Media DRM, Zune, and every other product it has trotted out at CES over the last decade.

    32. Re:$40,000,000,000 by DECS · · Score: 4, Insightful

      Microsoft spins its R&D into an "Other" category in its earning statements, and that segment blows through crazy billions of dollars. The problem is that nothing tangible results from all of that spending.

      Apple has $20 billion, which for a company that earns haft as much revenue and a third the profits, is proportional to Microsoft. The difference is that Apple is growing and building new products and businesses, while Microsoft is servicing the same three monopolies it had ten years ago: Windows, Office, and Servers. Outside of those high profit cash cows, Microsoft hasn't done a damn thing in ten years. All three are now under attack.

    33. Re:$40,000,000,000 by dh003i · · Score: 1

      Or it indicates they think they don't have enough value-adding projects to spend money on. Buying back shares may be more tax-efficient for investors than issuing dividends.

    34. Re:$40,000,000,000 by peragrin · · Score: 1

      Actually take a look. last I saw Apple had $15 billion in cash.

      MSFT is spending ton of money on R&D the problem is they get very little on the ROI in R&D.

      Apple spends 10 million in R&D and makes a 100 million dollars off the product.

      MSFT spends a Billion and makes a million off of 20 products.

      I can't fathom the amount of waste MSFT generates. if Windows and or office were ever to stop selling MSFT would be bankrupt within 3 years. longer if they started spinning off the other divisions that actually generate positive cash flow.

      --
      i thought once I was found, but it was only a dream.
    35. Re:$40,000,000,000 by irae · · Score: 0, Redundant

      You forgot "???" !!!

    36. Re:$40,000,000,000 by ozmanjusri · · Score: 5, Informative
      Actually it demonstrates that your company is in great shape

      Not necessarily.

      A significant portion of the salaries Microsoft pays its employees is in the form of stock options rather than cash. Compared to the rest of the industry, Microsoft employees are on mediocre rates. The way it attracts and retains employees is stock options.

      It's a good technique because it saves a substantial amount of tax, but the downside is that the constant issuing of shares to employees dilutes the value held by existing shareholders. When the company is growing fast, that's fine, but now there's a downturn, a lot of threats and a whole slew of new companies trying to attract employees.

      MS can not afford a major drop in the value of their shares, so they're pre-emptively propping them up with their spare cash instead of issueing the cash as dividends or reinvesting. This isn't a sign of a company in good shape. This is Microsoft girding their loins and settling in for a siege.

      --
      "I've got more toys than Teruhisa Kitahara."
    37. Re:$40,000,000,000 by MightyYar · · Score: 1

      Nintendo is still a game company, is it not? I obviously expect MS to stay relevant and keep up with technology, but I would rather they leverage their strengths and not branch out into other things just to blow through money.

      It's a big, mature company - there's no reason not to enjoy the profits. It doesn't have to act like a growing company, because there is a lot of value in an established company that consistently turns a profit.

      --
      W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
    38. Re:$40,000,000,000 by Tubal-Cain · · Score: 5, Funny

      Please do not tell moderators what to do.

      Mod parent up!

    39. Re:$40,000,000,000 by melikamp · · Score: 1

      Please do not tell posters what to do. If you think that a post is offtopic, mod it as such instead of explaining your point of view, which itself is even more offtopic than that of GP!

    40. Re:$40,000,000,000 by MightyYar · · Score: 2, Interesting

      Nice tone.

      You don't think MS is diversified? Are you serious? They have 90% of the consumer PC market, nearly 100% of the business PC market, roughly half of the server market, about 1/3 of the video game console market, and a substantial chunk of the smart phone and PDA market. They have nearly 100% of the office software market, and many of their other products are successful as well.

      I'm not saying that they shouldn't keep spending money on R&D, but I think they have that covered. As a big and mature business, there is nothing wrong with directing some profit toward the stockholders.

      --
      W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
    41. Re:$40,000,000,000 by melikamp · · Score: 1

      Please do not reply to your own post.

      Oops...

    42. Re:$40,000,000,000 by bogjobber · · Score: 1

      Listen, I'm not saying Apple is a poorly run company, or that Microsoft is getting a good return on R&D spending. Not every Microsoft post has to turn into an MS vs. Apple flamewar. I don't give a shit if you think Apple is the better company, at this point I probably agree. It doesn't matter how much cash Apple has or their business model. This is about MS.

      I'm saying *at this specific point* it makes sense to do the buyback. It's a poor idea to have that much cash sitting around unless you plan on using it immediately. The Yahoo deal fell through, so they're doing the most prudent thing at this time. You don't need $40 billion in cash to plan for the future.

    43. Re:$40,000,000,000 by MightyYar · · Score: 1

      You are right - "investing" doesn't have to mean diversifying, but that is how I interpreted it in the context of his comment.

      --
      W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
    44. Re:$40,000,000,000 by MightyYar · · Score: 2, Informative

      Insightful? 8.5% of Microsoft's income in 2007 was from investments.

      Nice snark. How can you be so sarcastic when you are making my point for me? Way too much of their income is from non-core business activity. They seem to agree, and are buying back stock rather than investing the cash some other way.

      --
      W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
    45. Re:$40,000,000,000 by Lally+Singh · · Score: 1

      Quick patch.

      1.5 Fuck it up.

      Btw, reasons like that are why programmers count by 10 :-)

      --
      Care about electronic freedom? Consider donating to the EFF!
    46. Re:$40,000,000,000 by poached · · Score: 1

      Technical jargon, I understand. But this is making my head spin. Who modded this up must be full of shit because I don't think anyone could understand this.

    47. Re:$40,000,000,000 by Highrollr · · Score: 1

      Basically, the man is saying that buying back shares and paying a dividend are both ways of returning money to investors. Dividends return the cash directly. Buying back shares "returns" the cash to the remaining shareholders by raising the value of their shares. Imagine Company A has assets worth $1 million and 1 million shares outstanding. Each share is worth $1. If Company A buys back 500,000 of the shares, each of the remaining 500,000 is worth $2, because the company has $1 million in assets. Because of various tax shenanigans, it can sometimes be better for the shareholders to have a buyback than a dividend. This example is oversimplified, but I hope it conveys the basics.

    48. Re:$40,000,000,000 by johanatan · · Score: 1

      I second that!

    49. Re:$40,000,000,000 by Anonymous Coward · · Score: 0

      I've seen somewhere before that Microsoft's assets are $58 trillion with 3% fall (I think it was a Q4 2006 financial report). At the same time, Google's assets were $17 trillion with 50% increase.

    50. Re:$40,000,000,000 by Anonymous Coward · · Score: 0

      It is just an announsment to the public to calm down stock panic. Nothing more

    51. Re:$40,000,000,000 by Anonymous Coward · · Score: 0

      Why the troll mod? I thought this was a reasonable comment.

    52. Re:$40,000,000,000 by HuguesT · · Score: 1

      This is partly true. Microsoft is funding actual research (like in math, computer vision, research OS, etc). This is long-term stuff, I'm sure that if MS is smart they can make a lot of money from that just like IBM and others did. If they are not they can have yet another Xerox PARC on their hand.

      On the other hand Apple is funding lots of development but not research. I'm not aware of anything that Apple does that would be publishable in a peer-reviewed academic journal. This is a shame BTW.

    53. Re:$40,000,000,000 by rtb61 · · Score: 1

      In this case however the stock buyback is simply a means by which M$ can raise it's stock price in light of the failure of the latest version's of it's operating system and office suit and well as the continued failure of it's game console to generate returns to cover it's losses and as for server market share, that's simply a marketing lie hidden behind servers shipped with a operating system, versus the reality the most servers are not shipped with an operating system and of course let's not forget the continued dismal failure of MSN and live search and of course the edsel of music players 'ZUNE'.

      Basically the stock buy back is simply because tmanagement lack the skill or imagination to effectively invest for the future so that they can diversify out of the OS and Office suite which is continually coming under greater threat. It is all a rather simply way for ballmer to point to himself and say that he improved M$ share price as he desperately tries to hang on for the next '10 YEARS' good luck M$. So I would not call making sound well thought out investments into MSN to be R&D, more just the logical change of direction for M$, a change they have touted for years, in fact more than a decade, but due to incompetence they have failed and, were desperate enough to try and buy themselves out of their failure.

      --
      Chaos - everything, everywhere, everywhen
    54. Re:$40,000,000,000 by MightyYar · · Score: 1

      MS isn't doing as poorly as you make them out to be. But your points illustrate exactly what I'm talking about. MS's core competency is making software for PCs... all these other adventures have been mostly a waste of money and the money spent would have been better off returned to the investors. XBox, Zune, etc leveraged their core competency in software very poorly.

      --
      W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
    55. Re:$40,000,000,000 by Anonymous Coward · · Score: 0

      And basically all except Office and OS are money sinks. Especially their game console division.

    56. Re:$40,000,000,000 by hesaigo999ca · · Score: 1

      dude, you are soooo wrong, get your facts straight.....
      100% of the business PC market my arse.

    57. Re:$40,000,000,000 by Bigmilt8 · · Score: 1

      This is the dumbest post regarding business that I have ever seen. They are buying back the stock because they are going to raise the dividend. Thus creating more cash for themselves. Oh, and their products ARE profitable. How do you think they got the money in the first place.

    58. Re:$40,000,000,000 by MightyYar · · Score: 1

      So then you are trying to make my point for me? That they should stick with core competencies and let the investors do the investing?

      I don't currently own any MS because they tend to dump money into such stupidity, but I'd be quite happy with them if they just made Applications and OSes and paid a healthy dividend. It's called a mature business and it's nothing to be ashamed of. They only need to spend enough on R&D to stay relevant.

      --
      W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
    59. Re:$40,000,000,000 by MightyYar · · Score: 1

      Did you miss the "nearly" qualifier? Who else has any significant market share in business PCs?

      --
      W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
    60. Re:$40,000,000,000 by MightyYar · · Score: 1

      Wow, so rude. Did you reply to the right guy? I never said that their products were unprofitable.

      Anyway, when a business is growing it makes a lot of sense to pay no dividend and reinvest profits into growing the business. Sell stock to raise even more cash. However, when you've conquered your entire target market you don't need nearly so much capital. MS is a big, mature company and doesn't need to act like a startup.

      Throwing money at every "next big thing" just isn't necessary unless they are trying to keep up growth. Growth for the sake of growth is silly - just concentrate on your core competencies and don't let yourself fall behind.

      I don't think MS would make a very good GE or Johnson and Johnson. But hey, there seems to be some investment banking spots open on Wall Street, so why not? MS brand mortgage-backed securities.

      --
      W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
    61. Re:$40,000,000,000 by VTBassMatt · · Score: 1

      Except it's not true. MSFT grants stock awards, not options, and has since 2001. These can never be underwater the way options would be, although they do go up and down in value.

      Also, your average MSFTie's salary is just fine compared to industry averages. It's the other companies' ability to grant options (unbounded upside) that makes MSFT total comp. appear less rosy.

    62. Re:$40,000,000,000 by Anonymous Coward · · Score: 0

      And RENUM. Don't forget RENUM.

    63. Re:$40,000,000,000 by peragrin · · Score: 1

      True, Apple doesn't do a lot of pure research. but then again they do push existing technology to it's limits(and sometimes beyond) .

      MSFT singularity is an awesome project the problem with it, it will never be used in a commercial system. by the time MSFT marketing gets their hands on it it will look like vista and be twice as slow. MSFT has a lot of great engineers. The problem is that market has higher ranks so actual products suffer.

      --
      i thought once I was found, but it was only a dream.
    64. Re:$40,000,000,000 by rtb61 · · Score: 1

      No, you are as wrong as you can be. They are a technology company not a software company. Just like every other emerging industry, it changes over time and companies within an evolving industry must change and adapt or die out. M$ is a corporation and is only as effective as it's executive team, the current team is just a abject failure at making the transition to a web based and services company, mostly as a result of their total failure to change their attitudes towards the customers.

      Their pay for the privilege beta testing, believe the marketing instead of the warranty, it is always their fault, customers. While this amazingly enough did work for software companies for a while, the clear transition is to open source software (back to where it originally started) and, it most certainly and has failed when it comes to the supply of web based and services company. Computer hardware has also changed, it is now fully a consumer electronic product rather than specialist hardware.

      So the hard brutal reality is M$ needs to separate into two distinct companies, a web based and services, company with management who is capable of generating a positive income and growth and which leaves the proprietary software part which basically milks as profit as it can out of existing product range without throwing away additional investment in it and, good example is XP and vista, how much better financially and image wise would M$ had been if they had dumped ballmer prior to his being able to produce vista ie. if M$ had simply stuck with Bill's XP.

      As for hardware, what if M$ had the least bit of business acumen, rather than just B$ marketing skills (which inevitably fails) and monopoly exploitation (which history has proven over and over and over again, inevitably fails) and, bought Sony to get into the games console marketing, rather than keep losing money on their own games console.

      --
      Chaos - everything, everywhere, everywhen
    65. Re:$40,000,000,000 by Anonymous Coward · · Score: 0

      No, I'm just countering your point that MS is highly diversified. Nothing more.

      And if they don't diversify succesfully, they're in deep trouble when there monopoly in OS and office ends.

    66. Re:$40,000,000,000 by Anonymous Coward · · Score: 0

      Oh my god. Did I really do that? it's "they're", damnit.

    67. Re:$40,000,000,000 by MightyYar · · Score: 1

      LOL, you mean "their". :)

      I don't know about "highly" diversified, but they are certainly sufficiently diversified to survive any long-term changes in the industry. It's not as if their monopoly will end instantly - and even if one monopoly ends it's not like the other necessarily will at the same time.

      They have TWO monopolies in two highly lucrative markets.

      --
      W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
    68. Re:$40,000,000,000 by MightyYar · · Score: 1

      They are a technology company

      What does that even mean? "Technology" encompasses the entirety of human invention... don't you think that's a bit broad?

      They ARE a software company. They make some hardware, but haven't been overly successful at that. Most of their income comes from software.

      MS might take your ideas more seriously if you stopped using a dollar sign as the S. Are you a stockholder? If not, why are you so wound up about their executives? If you think the company is so poorly run, just sell your stock.

      --
      W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
  3. well by ionix5891 · · Score: 1

    the couldn't but yahoo, so they had to do something with all that money

    tho they should have done this earlier, good thing the yahoo deal collapsed, it would have been a bad idea

    1. Re:well by Ethanol-fueled · · Score: 1, Insightful

      Now if they would only buy back all those crappy Vistas they pushed on PC manufacturers.

  4. Why do companies do this? by Finallyjoined!!! · · Score: 2, Interesting

    Why not spend $40bn on other stock.

    Doesn't make sense to me, come on you stockmarket guys, explain the rationale.

    --
    If I had an Ass, I'd call it Fanny Bottom, then I could slap my Ass; Fanny Bottom, on the Arse.
    1. Re:Why do companies do this? by Rayeth · · Score: 2, Informative

      Essentially this is a move to prop up their stock price to make the other investors (the ones who don't sell the stock) happy.

    2. Re:Why do companies do this? by Ubergrendle · · Score: 5, Informative

      You improve your P/E ratio, ultimately meaning that your dividends get spread across a smaller pool of stocks...makes the stocks more valuable as a blue chip commodity, raising their price. its a good strategy when you're taking a long view, and don't anticipate any future rapid growth. The $40b is controlled by the board of directors, and ultimately belongs to the shareholders. its not a funny money fund. Ultimately the best use of the $ is to improve the shareholder's value.

      --
      John Maynard Keynes: "When the facts change, I change my mind. What do you do?"
    3. Re:Why do companies do this? by Tubal-Cain · · Score: 1

      This pulls those stocks off the market, reducing the number of stockholders (and the votes that come with them). And hopefully if they need cash in the future, they could sell the stock for a higher price.

    4. Re:Why do companies do this? by AuMatar · · Score: 1

      Its a payout to current investors. Buy 1B shares at $40, and see the price instantly increase as buying it at anything under 40 is now a steal. The real question is why not just issue dividends.

      --
      I still have more fans than freaks. WTF is wrong with you people?
    5. Re:Why do companies do this? by Anonymous Coward · · Score: 0

      When a company buys back its own stock, it is reducing the number of outstanding shares, so therefore the earnings of the company increases per the remaining shares.

    6. Re:Why do companies do this? by Anonymous Coward · · Score: 0

      Check out this article for a decent breakdown of motives.

      http://www.investopedia.com/articles/02/041702.asp

      see the section labeled "motives"

    7. Re:Why do companies do this? by dgatwood · · Score: 1

      There are only two good reasons I can think of to buy back stock:

      • To allow a reverse stock split to avoid delisting.
      • To defeat a hostile takeover attempt by ensuring that the company and its board own more than 50% of the stock.

      So it's pretty obvious. They're afraid their stock is going to collapse to the point that they can be bought by SGI. :-D

      In other words, I haven't the slightest idea what is going through their heads, but then again, computer people have been wondering what Microsoft could possibly have been thinking for years, so I guess that's nothing new....

      --

      Check out my sci-fi/humor trilogy at PatriotsBooks.

    8. Re:Why do companies do this? by Anonymous Coward · · Score: 5, Funny

      Could you rephrase that in a car analogy?

    9. Re:Why do companies do this? by Stan+Vassilev · · Score: 1

      Why not spend $40bn on other stock.

      Doesn't make sense to me, come on you stockmarket guys, explain the rationale.

      Because they want to raise the price of the Microsoft stock, not someone else's.

    10. Re:Why do companies do this? by jmauro · · Score: 4, Informative

      The third reason is to have shares on hand to re-issue as options to current executives and employees without diluting the existing share holders.

    11. Re:Why do companies do this? by Rayeth · · Score: 3, Interesting
      Mod Parent Up Informative

      Also note that by doing this Microsoft isn't required to use all of that $40bn either. If they see something more attractive they can always shift the money around later.

      Also note that just sitting on a ridiculous amount of money (like the ~$30bn Microsoft has) is a terrible financial move. The board is right to do something with that money, and if they can't get Yahoo (all or part) with it, then best to do something worthwhile rather than sit on their hands and hope something good comes along

    12. Re:Why do companies do this? by dvice_null · · Score: 1

      I can think of two reasons:
      - They buy the stocks now when they are low, because hey think the stock will go up and then they can sell them with profit.
      - They buy the stocks to get the price up (and then sell them with profit).

      Normally the stocks go up, down, up, down, etc. so if you buy when they have gone down, you will gain money later when they go up. But this isn't always the case. E.g. if you bought SCO stocks, you probably lost a lot.

      Personally I would not risk my money on their shares. Firefox is eating their bread, OpenOffice is eating their butter and people are getting more and more aware of Linux. Not to mention iPod and Wii beating their other products.

    13. Re:Why do companies do this? by McBeer · · Score: 1

      Buying it back reduces the amount of outstanding stock, so the earnings per share from future dividends is likely to be higher. 40 billion is about 6% of the outstanding MSFT stock, so all future dividends will be split among the other 94% and each share will be a bit larger. From an investors standpoint, this is roughly equivalent to issuing a dividend. The advantage, from MSFTs perspective over a dividend is that this will A) make the stock stats look better longer and B) gives the investment world a signal that they believe their stock to be undervalued. Also executive bonuses are often tied to EPS :/

      --
      Hikery.net - The best hiking site ever. Made by yours truly.
    14. Re:Why do companies do this? by Anonymous Coward · · Score: 5, Insightful

      You're a car manufacturer. You buy a bunch of cars when they're not very valuable, particularly old used cars on the secondary market. You destroy these cars in mass. This in the long term creates better higher demand (thus price/value) for newly-produced cars in the future, because there are overall fewer cars in circulation, particularly old clunkers that people might otherwise use instead of getting a new car.

    15. Re:Why do companies do this? by lavalyn · · Score: 1

      This is effectively a dividend increase. They think the rate of return on other companies is not good enough at the moment, and the cash is just sitting there. So they'll return it back to shareholders.

      Consequences: lower float -> higher earnings per share.

      --
      Doing the Right Thing should not be preempted by making a buck.
    16. Re:Why do companies do this? by Anonymous Coward · · Score: 0

      That's a bunch of crap. MS could use that money to pay a dividend to their shareholders rather than buying up stock. Yes, buybacks do reward shareholders, because they create market demand for the stock and result in a low number of shares on the market (in finance speak, the float of the stock is reduced). There are about 9B shares of MS stock outstanding. They could pay a dividend of over $4/share with their $40B rather than buying back stock!

    17. Re:Why do companies do this? by vux984 · · Score: 4, Informative

      Doesn't make sense to me, come on you stockmarket guys, explain the rationale.

      It reduces the number outstanding shares. This good on several points:

      1) It counters stock dilution caused from issuing stock options, and previous financings, by reducing the shares outstanding adds shareholder value. (The remaining shares each represent more of the company than they did before.)

      2) It improves certain financial markers like 'earnings per share' (and others) because with fewer shares, the EPS and other figures look better. (One can argue this is just a sleight-of-hand to make earnings look better than it is, but the counter argument is that the lower EPS isn't representative of the companies actual strength, because it doesn't account for the 40 billion just sitting there...)

      3) A buyback is also an indirect way of distributing value to shareholders. (The direct option is dividends); a buyback by creating a demand and reducing the supply for the shares tends to bolster the prices, providing value to shareholders.
      4) MS is sitting on pile of cash and not doing anything with it, that's not in the shareholders best interests, so they should do -something- with it. If the shares are depressed, due to, for example, an unrelated global credit crisis, then a buyback may represent best investment of that money for the shareholders.

    18. Re:Why do companies do this? by Ubergrendle · · Score: 0

      Ummmm....ok.

      Instead of have 4 shitty Chrystler Neons performing badly, Microsoft is selling them and buying one BMW. Which one looks shinier?

      --
      John Maynard Keynes: "When the facts change, I change my mind. What do you do?"
    19. Re:Why do companies do this? by OpenSourced · · Score: 1

      Basically it means that, as a company, you are telling your investors that you cannot really think of a more productive way of spending the money you have. Buying back your company is like giving money back to investors, with the added bonus (from the company side) that you can get it back with no ifs or buts. Also have the advantage of not having to be ever really made. You can make the announcement, and then after a year say that you changed your mind, or the markets are not favorable anymore. It's great.

      But, as said, is basically Microsoft saying that they cannot think of any investment, enterprise, new product, etc that is worth its salt, for using that money. Which is all well and good, of course, only a bit disappointing.

      --
      Rome taught me patience and assiduous application to detail. Virtues which temper the boldness of great, general views.
    20. Re:Why do companies do this? by Anonymous Coward · · Score: 0

      You improve your P/E (Power/Engine) ratio, ultimately meaning that your car races with a smaller pool of other stock cars...makes your car more valuable with its blue chip mod, raising its price. It's a good strategy when you're driving the Indy 500, and don't anticipate many pit stops. The $40b is controlled by the car's sponsors, and ultimately belongs to the shareholders of the sponsor. it's not a Funny Car. Ultimately the best use of the $ is to improve the sponsor's value and your car's ability to compete.

    21. Re:Why do companies do this? by moderatorrater · · Score: 4, Informative

      IE loses them money and is still the dominant browser, Open Office just got passed up by Google Docs, and Linux hasn't even captured 10% of the market. Last numbers I saw put Linux + Mac at less than 10% of the total market. The 360 is the console that gets the most love for games with serious graphics.

      Overall, yes, Microsoft is declining, but their core windows products have declined by less than 10%. It's a little early to be writing their eulogy.

    22. Re:Why do companies do this? by Anonymous Coward · · Score: 0

      1. Sell shitty Os (Vista) and cause share price to fall
      2. Buy stock back at low point.
      3. Release proper OS (windows 7) and watch Share price rises
      4. ???
      5. Profit !!


      sorry, just couldn't resist :-)

    23. Re:Why do companies do this? by Culture20 · · Score: 1

      Yahoo might want 40bn in MS stock as partial payment.

    24. Re:Why do companies do this? by Anonymous Coward · · Score: 0

      Its a payout to current investors. Buy 1B shares at $40, and see the price instantly increase as buying it at anything under 40 is now a steal. The real question is why not just issue dividends.

      MS will buy the stock on the open market or arrange private deals at near-market prices. The stock is presently trading at $26. They are NOT going to bid for 1B shares at $40. Think about what happens if they bid $1B for 40 shares. As soon as their order is filled, the price tanks back to $26. There are plenty of mutual funds that own more than $1B in MS stock and would unload at a heart-beat for $40.

      M$ is going to buy shares slowly over a period of time, at market value, to create a steady demand for shares which puts upward pressure on share price.

    25. Re:Why do companies do this? by OldManAndTheC++ · · Score: 5, Interesting

      Listen to the words of the oracle of Omaha, Warren Buffett, from the Berkshire-Hathaway 2005 Annual report:

      Too often, executive compensation in the U.S. is ridiculously out of line with performance. That
      won't change, moreover, because the deck is stacked against investors when it comes to the CEO's pay.
      The upshot is that a mediocre-or-worse CEO - aided by his handpicked VP of human relations and a
      consultant from the ever-accommodating firm of Ratchet, Ratchet and Bingo - all too often receives gobs
      of money from an ill-designed compensation arrangement.

      Take, for instance, ten year, fixed-price options (and who wouldn't?). If Fred Futile, CEO of
      Stagnant, Inc., receives a bundle of these - let's say enough to give him an option on 1% of the company -
      his self-interest is clear: He should skip dividends entirely and instead use all of the company's earnings to
      repurchase stock.

      Let's assume that under Fred's leadership Stagnant lives up to its name. In each of the ten years
      after the option grant, it earns $1 billion on $10 billion of net worth, which initially comes to $10 per share
      on the 100 million shares then outstanding. Fred eschews dividends and regularly uses all earnings to
      repurchase shares. If the stock constantly sells at ten times earnings per share, it will have appreciated
      158% by the end of the option period. That's because repurchases would reduce the number of shares to
      38.7 million by that time, and earnings per share would thereby increase to $25.80. Simply by withholding
      earnings from owners, Fred gets very rich, making a cool $158 million, despite the business itself
      improving not at all. Astonishingly, Fred could have made more than $100 million if Stagnant's earnings
      had declined by 20% during the ten-year period.

      Fred can also get a splendid result for himself by paying no dividends and deploying the earnings
      he withholds from shareholders into a variety of disappointing projects and acquisitions. Even if these
      initiatives deliver a paltry 5% return, Fred will still make a bundle. Specifically - with Stagnant's p/e ratio
      remaining unchanged at ten - Fred's option will deliver him $63 million. Meanwhile, his shareholders will
      wonder what happened to the "alignment of interests" that was supposed to occur when Fred was issued
      options.

      A "normal" dividend policy, of course - one-third of earnings paid out, for example - produces
      less extreme results but still can provide lush rewards for managers who achieve nothing.
      CEOs understand this math and know that every dime paid out in dividends reduces the value of
      all outstanding options. I've never, however, seen this manager-owner conflict referenced in proxy
      materials that request approval of a fixed-priced option plan. Though CEOs invariably preach internally
      that capital comes at a cost, they somehow forget to tell shareholders that fixed-price options give them
      capital that is free.

      It doesn't have to be this way: It's child's play for a board to design options that give effect to the
      automatic build-up in value that occurs when earnings are retained. But - surprise, surprise - options of
      that kind are almost never issued. Indeed, the very thought of options with strike prices that are adjusted
      for retained earnings seems foreign to compensation "experts," who are nevertheless encyclopedic about
      every management-friendly plan that exists. ("Whose bread I eat, his song I sing.")

      Getting fired can produce a particularly bountiful payday for a CEO. Indeed, he can "earn" more
      in that single day, while cleaning out his desk, than an American worker earns in a lifetime of cleaning
      toilets. Forget the old maxim about nothing succeeding like success: Today, in the executive suite, the alltoo-
      prevalent rule is that nothing succeeds like failure.

      --
      Soylent Green is peoplicious!
    26. Re:Why do companies do this? by nomadic · · Score: 2, Funny

      Linux hasn't even captured 10% of the market.

      But Linux has only been around for 16 years; I promise you, next year will finally be the year of Linux on the desktop!

    27. Re:Why do companies do this? by Amouth · · Score: 1

      Taxes.. and they market view.. and the cost of doingit

      if they where to issue dividens.. they would have to cut checks.. alot of them.. to alot of people.. this costs money. a good amount.. then the people get them would have to pay taxes on them (and ms would have to send tax forms for them) all of this transfering of money ot 9b shares is expensive.

      if they buy back .. then they only have to deal with the paperwork and movement of mony for 1b or less shares. then their stock price will also go up as the amount avaliable is lessened. ontop of that the people who keep invested see their wealth increase and don't have to pay taxes on that at the moment.. and theones that want to cut their losses get to sell their shares. on top of that with the new higher stock price if MS needs quick funds they can just resell some of the shares they are holding at the new increased market price

      when dealing in the volume of shares that they are dividens just don't make sence.. they sound nice.. but they don't add any value to the company.

      --
      '...if only "Jumping to a Conclusion" was an event in the Olympics.'
    28. Re:Why do companies do this? by dave562 · · Score: 2, Insightful

      But their products keep getting worse. I have been using Microsoft products since DOS 3.3. They have boxed themselves into a business strategy that requires forced upgrades. The room for serious innovation in the market place is petering out. There might be some new features here and there, but there isn't much that can be done with an entire office suite, or operating system. Just look at Vista and Office 2007. I've used both and they suck compared to XP and Office 2003. There isn't any value added for the consumer that would incline the consumer to purchase the newer versions. Microsoft has to force consumers into newer versions by end of lifing (EOL) the previous version. That makes for unhappy consumers when they are forced to replaced something that works just fine. In the long term, Microsoft is destined to fail if they keep up the same strategy. What they should do is freeze things where they are and refine them before they completely destroy them.

    29. Re:Why do companies do this? by morgan_greywolf · · Score: 1

      Sure. The pool of outstanding stocks is like a gas tank. You make each drop of gasoline more valuable decreasing that gas tanks' size.

      (Bet you didn't think I could do it! Ha!)

    30. Re:Why do companies do this? by gbjbaanb · · Score: 1

      yeah, but to date MS products have been better than the alternatives (linux fanbois regardless).

      However... fast forward to today. Linux is not just as good (at least, lets not get into arguments here), but its making big inroads into the server marketplace - Oracle sells Oracle, and you get a free OS to run it on (redhat^H^H^H^H^H^H'Unbreakable' linux). VMware sells you the best enterprise virtualisation product... that runs on Linux (RedH^H^H^H ESX).

      The desktop is getting close to being good enough to use everyday. If there were more games, home users would go for it in a much stronger way. At the moment, they're tentatively checking it out - at least the non-technical blogs I read have more and more people asking "if anyone has tried this Ubuntu, I need to upgrade and I thought I'd see what it was about".

      and so on. That's just Linux, it doesn't count the growth importance of Google, smartphones and web-based computing. (remember there's about 300 million people with internet access, 3 billion have mobile phones, how's that marketplace going to mature over the next 5-10 years?).

      Microsoft is still the dominant player, but its fading. Evans Data surve that said there were 74% of all developers targeted Windows in 2006 became 65% in 2007. That worried MS enough to start coughing up cash to PHP and Apache, and starting their own opensource initiatives. They're worried, and rightly so.

    31. Re:Why do companies do this? by Anonymous Coward · · Score: 0

      First of all, this is all fuck blow.

      In addition, this blue chip shit is all MS B.S. MS is not blue chip. You cannot cash blue chip.

      P/E RATIOS DO NOT CHANGE. THEY CANNOT CHANGE. BLUE CHIP WILL NOT P/E.

      yOU DO NOT LOONEY THE BOARD. THE BOARD WILL NOT REAPPORTION STOCK IN THIS MANNER.

      YOU WILL NOT FIND THE ANON.

      1:48 pm Tuesday the 23rd of September

    32. Re:Why do companies do this? by HungSoLow · · Score: 1

      Well done sir.

    33. Re:Why do companies do this? by jedidiah · · Score: 1

      > The 360 is the console that gets the most love for games with serious graphics.

      This is shorthand for: "if you ignore the market leader, our product is doing well".

      Mac marketshare is growing. Firefox marketshare is growing.

      Even if OO marketshare isn't growing, Google presents a threat
      to the MS hegemony upon which all of it's future earnings are
      based.

      When you're on top of the world, there's only one way to go.

      Market saturation's a bitch.

      --
      A Pirate and a Puritan look the same on a balance sheet.
    34. Re:Why do companies do this? by Anonymous Coward · · Score: 0

      Well done.
      (golf clap)

    35. Re:Why do companies do this? by Not_Wiggins · · Score: 1

      And to add to this, with the stock they purchase in the treasury, they could always use it to purchase other companies using stock in place of cash. I agree with you completely... this move signals that the business believes in its future and is taking advantage of being both over-capitalized and a weak market.

      --
      Diplomacy is the art of saying, "Nice doggie!" until you can find a rock.
    36. Re:Why do companies do this? by Anonymous Coward · · Score: 0

      MS doesn't give options - they give actual stock. So that's a very good reason to buy back.

    37. Re:Why do companies do this? by IntlHarvester · · Score: 1

      IE loses them money and is still the dominant browser

      Very doubtful. If Firefox can make tens of millions per year through the home page and search box, Microsoft with their much larger market share must be pulling down a whole lot more.

      At the very least IE is propping up the whole MSN division.

      --
      Business. Numbers. Money. People. Computer World.
    38. Re:Why do companies do this? by city · · Score: 5, Funny

      I agree, except that you don't destroy the cars, you just take them out of the market place and keep them in your Treasury. The Treasury cars can then be scrapped for parts and given out to employees as an Employee Scrap Parts Options Program.

      --
      I am a v1ral sig. Plse c0py me and h3lp me spread. Thank y0u?
    39. Re:Why do companies do this? by nizo · · Score: 1

      Once Linux is no longer jailbait the love will start rolling in.

    40. Re:Why do companies do this? by jimmux · · Score: 1

      Someone needs to write a book that takes all those things that people have trouble getting their heads around (let's say... string theory for example) and explain them all with car analogies.

      This would sell, I'm sure. I would write it myself but I don't understand cars.

    41. Re:Why do companies do this? by moderatorrater · · Score: 1

      This is shorthand for: "if you ignore the market leader, our product is doing well".

      No, that's shorthand for, "This market's very different than other console markets that have come before, like comparing business laptop sales to the grows of OLPC sales. The Wii is a fundamentally different platform, where the Wii's hardware's less than half of what you get with the other consoles, the controller is unusable for anything but motion controls, and the target market is a decade or two younger. Therefore, coming in second to the Wii with more serious hardware lands you a market segment that the Wii doesn't touch, which has traditionally been very lucrative and driven the sales of consoles. Only time will tell if the Wii can pulverize the other consoles like the PS2 did, but right now it could easily be argued that the Wii doesn't even compete with the XBox and PS3."

      You were close though.

    42. Re:Why do companies do this? by dgatwood · · Score: 1

      Good point. However, that's typically buying back a fairly small number of shares at a time. $40 billion in shares is on the order of 1.5 billion shares. That's enough to give every Microsoft employee close to 17,000 shares of stock apiece if my employment stats are correct---a roughly $450,000 bonus per employee from the janitorial staff up through the CEO....

      --

      Check out my sci-fi/humor trilogy at PatriotsBooks.

    43. Re:Why do companies do this? by Jorophose · · Score: 1

      IE loses them money and is still the dominant browser,

      And how many people have firefox preinstalled?

      Otherwise, your argument is worthless. More people in the US and Canada drive transmission, because they like it. Not because it's the more common option. Oh of course not.

      (afaik)

      Open Office just got passed up by Google Docs,

      Again, 210MB office suite, or a Google product? What are you more likely to use as a random user?

      and Linux hasn't even captured 10% of the market.

      Because we can count linux users, and every windows user wants to use windows, right?

      Last numbers I saw put Linux + Mac at less than 10% of the total market.

      Again, that does not mean anything.

      The 360 is the console that gets the most love for games with serious graphics.

      "Serious graphics"?

      You want serious graphics?

      Build a gaming computer.

      "Hidef gaming" (aka 1024x768 or 1280x720) my ass.

      You want fun?

      Buy a Wii/DS, or OpenPandora and play your classics.

    44. Re:Why do companies do this? by Anonymous Coward · · Score: 0

      Can we somehow mod parent informative, insightful, AND funny?

    45. Re:Why do companies do this? by mrchaotica · · Score: 1

      if they where to issue dividens.. they would have to cut checks.. alot of them.. to alot of people.. this costs money. a good amount..

      I'm pretty sure Microsoft issues dividends anyway. All it'd have to do is change the amount, and that's just one number.

      then the people get them would have to pay taxes on them

      This is true, though -- but it accounts for the entire cost, not just part of it.

      (and ms would have to send tax forms for them)

      Likewise, MS currently sends tax forms anyway for its current dividends.

      --

      "[Regarding the 'cloud,'] ownership was what made America different than Russia." -- Woz

    46. Re:Why do companies do this? by MHolmesIV · · Score: 1

      I'd love for this to be true, but as much as Linux has improved on the desktop, it still just plain sucks unless you're a computer geek, and even then.

      I installed ubuntu on a laptop that will no longer install windows, and after a few months of using it, I would go back to windows in an instant if it would install. Just getting _anything_ done in Linux requires half an hour of googling, only to find that it's not really supported, and you have to install fifteen other products that _almost_ work.

      For instance, mapping network drives. I just couldn't for the life of me get SMB mapped drives to just work (to my FreeBSD server). In the end I just gave up and used scp. Two different versions of windows work beautifully. Permissions just translate across, and I don't even have to think about it.

      Microsoft is in no danger from the Linux crowd yet...

      Even in the server side, Apache has declined from over 70% of websites in 2005 to less than 50% now, while IIS has increased from ~20% to 35% in the same timeframe.

    47. Re:Why do companies do this? by alexander_686 · · Score: 1

      Sure. Your car is a very special car. It is called a Taxi. Your have a partner [or perhaps an ex-wife] that gets 10% of your post tax Taxi income. You go to the bank, use the car as collateral, pay your parnter lump sum to go away. The Partner will do it because they like the lump sum and it is tax advantage. The Bank will do it becasue you have a pile of cash and a great debt rating. You car has not changed. Your taxi income has not changed. [Well, it has. The debit is a nice tax sheild]. What you have done is gained more risk. After all, if you made a lot of losses your partner could not repo you car - The bank can. On the other hand, you don't have to share any of the up-side with your parnter - it's all yours. This has nothing to do with Microsoft's investments or anything like that. All that they are doing is shfiting the ownership structure. Microsoft may be underpriced [Balmer thinks so]. On the other hand, intrest rates are low, and there are few AAA companies issuing debt out there. I am betting the CFO saw a good time to move. So I have this to say - Nothing to see. Move along. Just some fancy people shuffling paper. Nothing to do with computers.

    48. Re:Why do companies do this? by Nevyn · · Score: 1

      when dealing in the volume of shares that they are dividens just don't make sence.. they sound nice.. but they don't add any value to the company.

      A couple of problems: 1) MSFT already has a dividend, so they already have all the cons. 2) Pretty much all large companies (which mostly have large numbers of shares) give a dividend.

      Also historically dividend producing companies tend to perform better, on average, than non dividend producing companies.

      --
      ustr: Managed string API with ave. 44% overhead over strdup(), for 0-20B
    49. Re:Why do companies do this? by DECS · · Score: 1

      You've fallen for the market share myth.

      Linux, Apple and Microsoft aren't companies selling competing widgets. Apple sells PCs that don't have Microsoft's OEM software on them, while Linux is used as an alternative to Microsoft's software. Rather than directly competing for "sales," Apple and Linux both serve to compete with Microsoft for attention (development) and air supply.

      Comparing "market share," particularly when talking about Linux, which isn't even sold, is absurd. You might as well be describing a man in a sealed room with a fire burning in one corner as safe because the fire only consumes a very small portion of the the room's "cubic inch share." The real problem is that it is eating up the room's oxygen and putting out toxins.

      Microsoft has worked well with a monopoly over the PC OS and software markets. But with competition from non-Windows PCs (both Macs and Acer/Dells running Linux) and from alternative server software (open source servers, which power more web servers than Windows Server), Microsoft is now finding its air supply getting cut off while its proprietary business model is poisoned by the insidiously opportunistic spread of open source. That's why Microsoft calls it a "cancer."

      Microsoft is still making craploads of money, but Windows has hit a brick wall with Vista, its consumer products have all tanked and are losing crap loads of money, and competition is just barely getting started.

      Apple is growing 10x faster than the PC market in general, and the top PC makers (HP, Dell, Acer) are all actively working to find new ways to use Linux or develop their own OS in imitation of Apple. Even if Windows 7 turned out to be a good product in 2010, it wouldn't matter, because nobody wants to pay for a PC OS anymore.

      Microsoft is fundamentally screwed. The worst part is that it is not taking any effective stabs at building a new model or innovating itself out of crisis. Shifts happen all the time. If big companies can't adapt, they die, and Microsoft isn't proving it can adapt. It's merely reacting with stock buybacks and imitative advertising (including its $300 million ads that primarily draw attention to Apple's brand.)

      Microsoft's "I'm a PC" Millions Actually Promoting the Mac

    50. Re:Why do companies do this? by maxume · · Score: 1

      It is a way of increasing the value of each outstanding share without imposing tax consequences on the various shareholders. I guess that might not be a good reason (if you think that they could do a better job putting the money to work than shareholders). As much as anything, it looks to me like they are growing about as fast as they can given their size, so shedding the excess cash to shareholders actually makes sense.

      (they are growing their absolute revenues quite a bit faster than Google, hardly the sign of a quick death:

      http://finance.yahoo.com/q/is?s=MSFT&annual
      http://finance.yahoo.com/q/is?s=GOOG&annual

      Microsoft's revenue growth also appears to be a little more efficient than Google's (but not by a large amount). People bat around what a threat Google is to Microsoft. Microsoft is a much bigger threat to Google.)

      --
      Nerd rage is the funniest rage.
    51. Re:Why do companies do this? by maxume · · Score: 1

      They are decreasing the shares outstanding, which is slightly different than decreasing the float. Decreasing the float does not change the number of shares used to calculate eps, it just changes the number of shares trading on the open market.

      Things like an insider (who is subject to special rules) buying or selling the stock can impact the float, independent of a share buyback.

      --
      Nerd rage is the funniest rage.
    52. Re:Why do companies do this? by bogjobber · · Score: 1

      Agreed. Microsoft is only declining in market share, and that was inevitable. Ten years ago, neither Apple nor Linux were viable competitors for the huge majority of consumers. That's changed, so naturally more users would migrate to both. But MS still has incredible sales. Vista has been selling like crazy, even with all the bad press and lower market share. It's just that they're no longer the only game in town.

    53. Re:Why do companies do this? by bogjobber · · Score: 1

      This is shorthand for: "if you ignore the market leader, our product is doing well".

      Mac marketshare is growing. Firefox marketshare is growing.

      You fail at logic. However, you do win the prize for shortest distance between contradicting statements. Congratulations!

    54. Re:Why do companies do this? by Anonymous Coward · · Score: 0

      this is nothing more than a scheme to take employee compensation off the expense portion of the income statement.

      1. pay employees with stock, don't count as employee expense.
      2. buy back stock - employees get paid well, dilution doesn't occur and reported income is inflated.

      i'm not sure if the rules changed a few years back, but this was the tech scheme du jour a few years ago.

    55. Re:Why do companies do this? by Anonymous Coward · · Score: 0

      Except of course Microsoft doesn't issue options any more, they moved to issuing stock grants directly. Also, Microsoft stock has been relativly flat for the last 7 years making these options mostly worthless...

    56. Re:Why do companies do this? by ArsonSmith · · Score: 1

      Come on, I can do much better than that:

      It's like a traffic jam of stock. They're taking some cars off the road in order to get the left over ones moving again.

      --
      Paying taxes to buy civilization is like paying a hooker to buy love.
    57. Re:Why do companies do this? by ciaohound · · Score: 3, Funny

      I understand cars and would love to help you out, but, unfortunately, I don't understand analogies. Are they anything like cars?

      --
      Oh, yeah, it's not easy to pad these out to 120 characters.
    58. Re:Why do companies do this? by morgan_greywolf · · Score: 1

      Nah. It's not like a road, it's TUBES!!!

    59. Re:Why do companies do this? by Anonymous Coward · · Score: 0

      Once Linux is no longer jailbait the love will start rolling in.

      Wait- does that make me a pederass?

    60. Re:Why do companies do this? by Omkar · · Score: 1

      Accidentally modded offtopic instead of insightful - posting to reverse this.

    61. Re:Why do companies do this? by ceoyoyo · · Score: 1

      That was great. Too bad more annual reports don't read like that.

    62. Re:Why do companies do this? by blueforce · · Score: 1

      As long as we're on the memes...

      Didn't the Nazi's do something similar?

      --
      If you do what you always did, you get what you always got.
    63. Re:Why do companies do this? by Anonymous Coward · · Score: 0

      I learned my "buy back stock" and how it works by playing Railroad Tycoon.

    64. Re:Why do companies do this? by falconwolf · · Score: 1

      I can think of two reasons:
      - They buy the stocks now when they are low, because hey think the stock will go up and then they can sell them with profit.
      - They buy the stocks to get the price up (and then sell them with profit).

      Except Microsoft is buying back stocks over 5 years not all at once. I think a better reason Microsoft is buying back stocks is because MS pays employees in part with stocks, employees get stock options. There's only two ways Microsoft can do that, either give employees stocks Microsoft already owns or can buy or by issuing more stocks. Issuing more stocks though dilutes the value of the stocks already issued.

      Personally I would not risk my money on their shares. Firefox is eating their bread, OpenOffice is eating their butter and people are getting more and more aware of Linux. Not to mention iPod and Wii beating their other products.

      I'm no supporter of Microsoft but they aren't about to stop making a profit any time soon. Unless MS does a massive fuckup MS will remain profitable for many years to come. While they are loosing marketshare to Apple and Linux the overall market is growing.

      Falcon

    65. Re:Why do companies do this? by falconwolf · · Score: 1

      But with competition from non-Windows PCs (both Macs and Acer/Dells running Linux) and from alternative server software (open source servers, which power more web servers than Windows Server), Microsoft is now finding its air supply getting cut off while its proprietary business model is poisoned by the insidiously opportunistic spread of open source.

      Actually Microsoft's server market share is growing absolutely and in terms of market share. According to Geekpedia Linux's server markiet share is plummeting. Microsoft's consumer market share is what's declining, more are buying Macs and Linux. However the consumer market is growing itself.

      Microsoft is fundamentally screwed.

      Not quite, Microsoft isn't down much from it's peak.

      Falcon

    66. Re:Why do companies do this? by DECS · · Score: 1

      The first "Microsoft's server market share" link is Gartner's numbers on servers shipping with an OS.

      The second "Linux's server markiet share" relates to commercial licensing for servers, and addresses the Unix market buying Linux licenses.

      Neither captures the Linux server market, as you don't have to buy Linux to use it. Most people using a Linux server didn't buy a server with Linux on it, apart from segment of commercial Unix users who migrated to commercially supplied Linux.

      If Linux in servers had really fallen as your numbers try to suggest, Microsoft wouldn't be spending money trying to pretend Linux costs more and other white paper propaganda.

      Trying to compare Windows with Linux as new sales is like comparing iTunes with torrents and finding that hardly anyone is buying non-iTunes music, so therefore torrents are going away.

      I do agree with the "it's peak" part.

      Imagine Steve Jobs for President

    67. Re:Why do companies do this? by falconwolf · · Score: 1

      But, as said, is basically Microsoft saying that they cannot think of any investment, enterprise, new product, etc that is worth its salt, for using that money. Which is all well and good, of course, only a bit disappointing.

      Except this is an investment. Those who sale shares get money and those who hold see an increase in the vaule of their shares.

      Falcon

    68. Re:Why do companies do this? by kaskoosek · · Score: 1

      They know the value of their company more than other companies. They believe it is undervalued. Invest in a company you believe is undervalued.

    69. Re:Why do companies do this? by Hal_Porter · · Score: 1

      Why not spend $40bn on other stock.

      Easy, they bought stock in the best company, which just happens to be Microsoft.

      That's right, the highly skilled investment professionals of the best company in the world recommend Microsoft stock.

      --
      echo -e 'global _start\n _start:\n mov eax, 2\n int 80h\n jmp _start' > a.asm; nasm a.asm -f elf; ld a.o -o a;
    70. Re:Why do companies do this? by gbjbaanb · · Score: 1

      The IIS comment is true, but only for 1 reason - MS persuaded GoDaddy (IIRC) to move all their 'unused' sites to Windows. That registrar has millions of domains registered that have no corresponding site (except a redirect to spam links, obviously) and it is these that are showing up on the stats.

      I do see more IIS hosting out there, MS finally woke up and offered the bigger hosting companies Windows Web Edition. Which only shows that competition does work, eventually, and that MS has woken up to the very real threat to their business from OSS.

      That last bit is the kicker - its MSs business to deal with anything that will reduce their business, they take it very seriously. That they are taking steps to attract developer and users to the little-value platforms they used to ignore is something we all need to recognise.

    71. Re:Why do companies do this? by TheRaven64 · · Score: 2, Interesting

      Also note that just sitting on a ridiculous amount of money (like the ~$30bn Microsoft has) is a terrible financial move

      Not necessarily true, it depends on the rate of inflation. In times of economic growth then money you keep as 'cash' is earning interest (so increasing in value) and is highly liquid so can be rapidly transformed into other forms of asset, allowing the company to take advantage of new opportunities easily. Since money is backed by the government, it is much less of a risk than most stock investments. In times of economic slowdown or (related) high inflation you are unlikely to see much return - the money may even lose value while you hold it - and the opportunities for turning it into something else are much more rare and so it doesn't make sense to hang on to it.

      --
      I am TheRaven on Soylent News
    72. Re:Why do companies do this? by Pecisk · · Score: 1

      > Open Office just got passed up by Google Docs

      I really just curious, have any reference to back up that claim? It is really interesting. However, that means that ODF marketshare is OO.o + Google Docs + Mac OS X (Text Editor supports ODF by default).

      --
      user@ubuntubox:~$ stfu This server is going down for shutdown NOW!
    73. Re:Why do companies do this? by moderatorrater · · Score: 1

      Yesterday, while searching for open office's market share, google was full of links about google docs passing open office (it was a video presentation by someone at google). Now I can't find it. Sorry.

    74. Re:Why do companies do this? by clone53421 · · Score: 1

      Mod parent up. Mod parent down.

      --
      Alexander Peter Kristopeit bought his basement from his mommy for one dollar.
  5. I'm going with "never" by Just+Some+Guy · · Score: 2, Funny

    Can we vote on this?

    --
    Dewey, what part of this looks like authorities should be involved?
    1. Re:I'm going with "never" by Anonymous Coward · · Score: 0

      What do you know, you're just some guy.

  6. It's funny, they've been having a lot of trouble by jollyreaper · · Score: 3, Interesting

    Microsoft has made a lot of money off of OS and office products but hasn't been equally successful with the side ventures. Vista has been such a tremendous flop, I wonder what their internal projections are looking like for the next five years. I think it's arguable to say that the advances they've made in other segments stem directly from their control of the desktop. If they lose the desktop battle, will their products remain compelling enough to hold onto the beachheads in the server room, in the development shops? I doubt they'll dry up and blow away overnight but it looks like there's a serious possibility of a reduced relevance in the future.

    --
    Kwisatz Haderach
    Sell the spice to CHOAM
    This Mahdi took Shaddam's Throne
  7. No Slashdotter would admit to owning any... by mi · · Score: 1

    Or would you?

    --
    In Soviet Washington the swamp drains you.
    1. Re:No Slashdotter would admit to owning any... by roc97007 · · Score: 1

      Sure I would, especially if I'd just sold it back.

      --
      Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
    2. Re:No Slashdotter would admit to owning any... by mi · · Score: 4, Funny

      That's fifteen lashes with a wet mouse cord, and a nursing of an orphaned baby-penguin for 6 months. Report to room 2011 down the hall to receive the lashes, and pick up the penguin on your way out by reception.

      --
      In Soviet Washington the swamp drains you.
    3. Re:No Slashdotter would admit to owning any... by Tubal-Cain · · Score: 1

      Some of us hope to eventually reach a majority shareholder position and liquidate the company.

      *wakes up*

    4. Re:No Slashdotter would admit to owning any... by GIL_Dude · · Score: 2, Informative

      Sure I would. I used to own some - about 50 shares I believe. I sold them the last time Microsoft did a tender offer as they were just stagnating (very slowing going down). This was a couple of years ago. I had originally gotten them through a program called ShareBuilder that let's you diversify through being able to buy partial shares in several things through a small monthly payroll deduction. I don't really recommend it, but I will admit that I used ShareBuilder. Anyway, why would slashdotters not admit they had some MS shares?

    5. Re:No Slashdotter would admit to owning any... by JeanBaptiste · · Score: 1

      no, I'm still wagering my SCO stock makes a comeback...

    6. Re:No Slashdotter would admit to owning any... by roc97007 · · Score: 3, Funny

      > and a nursing of an orphaned baby-penguin for 6 months.

      Man, I hate that. It makes my nipples hurt.

      --
      Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
    7. Re:No Slashdotter would admit to owning any... by Anonymous Coward · · Score: 1, Interesting

      I don't own any but this is a positive sign that'll get me to take another look at their stock. Some people - like the Motley Fool crew (whose self-proclaimed performance charts exemplify the saying about "lies, damned lies, and statistics") - say that buybacks aren't a good sign, that the company has run out of ideas or is weak. Personally, it says to me that they're focused on creating shareholder value and buybacks are a solid way to do that, especially when the company has a dividend. Buybacks and dividends are two policies I take as signs that a company's leadership may not have that kind of "double-digit growth ad infinitum" mindset. It's not a perfect policy, but it's a reason to check them out.

      The problem most every publicly traded company has is that the expectations of Wall Street are almost always short-term, unforgiving, and unrealistic. It'd be nice to think that after the internet bubble and the collapse of the financial sector, that perhaps investors would grow a brain and set more realistic expectations for their investments and thus companies would start to think past one or two quarters in the future. Instead the likely result of the recent problems is that a lot of Wall Street are going to run to gold, commodities, foreign investments, and Berkshire Hathaway for a few months and then go back the same old routine.

      Should I ever start up a company and need the kind of money an IPO can bring, I'd only do it if I had a solid plan for how to get the company back to being a private enterprise in some number of years. Private companies are the only ones allowed to have much sense; they're also the only ones allowed to treat their employees well without eventually shrinking the benefits more and more because it helps the next quarter's expenditures - even if it lowers productivity.

    8. Re:No Slashdotter would admit to owning any... by Anonymous Coward · · Score: 0

      YOU SURE THATS NOT ROOM 101?

    9. Re:No Slashdotter would admit to owning any... by ckaminski · · Score: 1

      I've been thinking about the market evolution a lot recently (from a very naive point of view).

      Once upon a time, the goal of investing in a company was to gain profits (dividends). And you had a set price per share, say $10, that would earn you $1 per year. Well, as a company grew and paid dividends on their profits, that $1 per year might grow to $10/year. These companies became valuable for their ability to pay great dividends. Well, time goes on, shares change hands (inheritance, whatever), a company needs to raise capital for a new project or an acquisition - they offer more shares for sale, or the estate decides that Joe over there offering $30/share now is better than $10 or $5 per share over the next 3-10 years. So all of a sudden, there's a switch from paying dividends to your loyal stockholders to speculating on market price based on news, trends and hokey "analysis."

      Most securities are not held for a very long time, some mutual funds actually proudly admit they turn over their entire portfolio every year.

      Speculation - the value buy isn't seen as valuable as the ups and downs that can be seen by those who have access to the realtime data streams. I use mostly GOOG for my share price data, because I trade on timeframes of years. My father uses Ameritrades real-time data feed and sees market trends that I'll never see and he can make money on a daily timeframe simply by carefully positioning himself.

      But no one can ever predict the random Maverick who ruins the whole house of cards (Countrywide?).

    10. Re:No Slashdotter would admit to owning any... by unity100 · · Score: 1

      this is not your average publicly traded company that is run by MBA types who do not have anything to trifle with in an already oversaturated, almost price-fixed, stagnant sector. this is a tech company in fast paced, speedily evolving tech field. miss one step, and youre out of step with what's going on, and out.

      if a tech company cant find anything good with 40 bn, given how high the cost of any investing in improvement in technology, i dont know who can.

    11. Re:No Slashdotter would admit to owning any... by Anonymous Coward · · Score: 0

      their geek points will just stagnate (very slowly go down)

    12. Re:No Slashdotter would admit to owning any... by kbielefe · · Score: 1

      Actually, more of you own Microsoft stock than you think, at least indirectly through mutual funds. Much like so many people call for punishing oil company owners without realizing they probably are one.

      --
      This space intentionally left blank.
    13. Re:No Slashdotter would admit to owning any... by Anonymous Coward · · Score: 0

      if a tech company cant find anything good with 40 bn, given how high the cost of any investing in improvement in technology, i dont know who can.

      It's not as simple as that. There's only so much you can do in a certain space without duplicating the work done - e.g., as much as a lot of people see Vista as a failure, would it really make sense for them to hire a couple of additional teams to work separately on the next-gen OS? They'd double or triple their related costs and what percent increase in sales could they have hoped for? The problems they have with their current products aren't ones whose most sensible solutions come from throwing lots of money at them.

      If you want them to expand to other products, that's where you risk a company losing focus and also where investors are going to ask "Why?" - a question which is finally starting to make some in-roads at Google. R & D is an intelligent investment and I have to admit I don't know for certain, but I'd guess that MS already puts a significant amount of money into R & D related to their current products. For them to start spending R & D money in new areas, they're going to want to justify it to themselves and their stockholders. Google is still a wunderkind letting employees play in software sandboxes, but I think they're going to tighten that up a bit as the detritus builds up (in public, no less); the investors are going to push for it, and I hope for it because I'd like to see them do somewhat fewer things but with more of a serious effort behind them.

    14. Re:No Slashdotter would admit to owning any... by ceoyoyo · · Score: 1

      Nope. MS has been stagnant for quite a while.

      Other than that, why wouldn't a Slashdotter want to admit owning MS stock? Now, they might not want to admit how they vote those shares....

    15. Re:No Slashdotter would admit to owning any... by Anonymous Coward · · Score: 0

      Man, I hate that. It makes my nipples hurt.

      Pics or it didn't happen.

  8. Probably Better than Losing it Bit by Bit by CodeBuster · · Score: 3, Interesting

    This is probably better than losing the whole pile bit by bit to enterprising attorneys and their clever lawsuits AND with the markets being so depressed right now and the number of good alternative investments diminished it probably does make sense to recapture some of those outstanding shares while the price is still attractive.

    1. Re:Probably Better than Losing it Bit by Bit by clockwise_music · · Score: 1

      If you were to lose $40,000,000,000 at a rate of 1 bit a minute (you'd only need 36 bits) it'd take only a bit over half an hour.
      Probably should do a buy back then.

  9. What does that mean? by FunkyELF · · Score: 1

    What does it mean when a publicly traded company buy's its own stock?
    That doesn't make sense to me. Don't the stock owners own the company? What does it mean when you own shares of a company that owns shares of its company. Isn't it redundant?

    Disclaimer: I got A's in all my CS classes and B's and C's in my Economics / Business classes.

    1. Re:What does that mean? by Daimanta · · Score: 0

      If you have shares you get a certain amount of money per stock you own. If Microsoft owns more of their own stock, they get to keep more. Furthermore it increases the scarcity of the stock thus driving up prices.

      --
      Knowledge is power. Knowledge shared is power lost.
    2. Re:What does that mean? by Dan667 · · Score: 3, Informative

      stock is like printing money for a company. When they buy back their stock there are less shares out in the wild so they hope the price will go up. If the current price of the stock is significantly less than what they think it is worth, it is a no brainier to buy it back and they get more influence over the company as well (less investors to complain about problems).

  10. A better plan by dingbatdr · · Score: 5, Funny

    I think Microsoft should buy up all the mortgage-backed securities it can get its hands on.

    That way I won't be forced to buy them (with my taxes).

    --
    The truth is an offense, but not a sin.------R. N. Marley
    1. Re:A better plan by rainhill · · Score: 1

      I dont see why this "clearly insightful" parent modded 'funny'

    2. Re:A better plan by Anonymous Coward · · Score: 0

      ...that way I won't be forced to buy them (with my taxes)
      Federal tax, Microsoft tax, does not matter. All the same scum...

  11. Debt is cheaper by zubikov · · Score: 4, Interesting

    All this means is that debt is a cheaper and more risk-averse way for them to finance their crappy commercials and world takeover plans. In this market, you can see billions in capital evaporate in minutes. Not to side with Microsoft, but it was a good move as the market is about to take a dump.

  12. Could someone explain to me... by roc97007 · · Score: 1

    ...in small words, what this means? What is Microsoft's motivation for doing this, and what do they hope to achieve? Is it a sign that they're in trouble, or is there some financial advantage to reducing the number of shares in play? For instance, if a company is cash-heavy, does that trip something with the analysts, requiring Microsoft to shed cash somehow? I'm not even sure what questions to ask.

    --
    Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
    1. Re:Could someone explain to me... by zubikov · · Score: 5, Interesting

      Microsoft can loose a lot of money quickly being in the equity markets, especially when the markets move +/- 5% a day. Their CFO concluded that going forward, it will be cheaper and less risky for them to raise new money with bonds, rather than stocks. This is not a sign that they're in trouble, rather a move to hedge against a sharp decline in the overall stock market.

    2. Re:Could someone explain to me... by dkleinsc · · Score: 4, Informative

      The short version: By offering to buy their own stock, they are spending their pile of cash to raise the value of the other shares. That raises the stock price at the cost of the cash they spent. It also signals to investors that this stock is safer to buy, because if it starts to drop the company will step in and buy from them.

      Read more about it: http://en.wikipedia.org/wiki/Stock_buyback

      --
      I am officially gone from /. Long live http://www.soylentnews.com/
    3. Re:Could someone explain to me... by kma100 · · Score: 1

      This is nonsense - Microsoft doesn't "lose" any money. Matket cap changes but there is no loss on the income statement.

  13. Speaking as a shareholder: by rssrss · · Score: 2, Interesting

    I am happy they are doing this. I wish they would buy back more stock instead of crapping around with Yahoo, and conducting R&D that they will never commercialize. Also they raised the dividend from its current crappy l1 cents to 13 cents which is still crappy. They should raise it to at least 40 cents.

    --
    In the land of the blind, the one-eyed man is king.
    1. Re:Speaking as a shareholder: by kramerd · · Score: 1

      Since I can't mod you ignorant, and troll is not necessarily guaranteed, I'll save the points and point out what I see as the obvious.

      Speaking as a rational shareholder, thats a quarterly dividend. This means they were paying 44 cents and are now paying 52 cents. Thats per share. On your investment, even if the stock doesnt move at all, you will double your investment in 50 years.

      Lets review: you can make money in the long run even if microsoft stock drops in price (in which case you currently can take up to 3000 in losses every year against your capital gains). Most rational people would call that a return on investment. Microsofts stock price has effectively not changed in 5 years, so getting something for your investment, that amounts to over 2% of the stock price, is not crappy.

      To be fair, there isnt really a point to microsoft raising its dividend. They are buying back shares, not raising capital.

  14. Mark Cuban was right ?? by pacificleo · · Score: 4, Interesting

    Mark cuban recently wrote a post about the correlation between shares Buyback and Collapse of Financial powerhouse like AIG-Lehman and ML . I hope MSFT can avoid that fate. http://blogmaverick.com/2008/09/16/the-aig-lehman-merrill-lynch-link/

    --
    somethings are best left unsaid , I am one of those things
    1. Re:Mark Cuban was right ?? by Tubal-Cain · · Score: 1

      I hope MSFT can avoid that fate.

      I don't, with exception to the possible impact it could have on the economy.

    2. Re:Mark Cuban was right ?? by Anonymous Coward · · Score: 0

      Dude, have you SEEN the economy lately? At this point, what's one more log on the inferno?

    3. Re:Mark Cuban was right ?? by nschubach · · Score: 2, Insightful

      1929

      --
      Every time I start to have faith in humanity, I ruin it by driving to work between 7 and 8 am.
  15. Who owns Microsoft? by megamerican · · Score: 2, Informative

    Composite government funds own 82% of Microsoft according to this website.

    This file shows that the New York retirement investment fund had over $1,000,000,000 in MS stock in 2006.

    Add up every other state, county and city that owns Microsoft stock and it could really pile up.

    Could it be that our own Government over the last several decades has been promoting to those fortune 500 companies, of which Government owns most through Bond - Loan investment / stock ownership [EXAMPLES: 82% stock ownership of Microsoft Corporation, Disney 61%, AOL - Time Warner 58%, EXXON 72%] to manufacture abroad so that Government would realize greater returns on their investments at the Peoples of the USA's expense in jobs and wealth retention.

    -cafr1.com

    --
    If you have something that you dont want anyone to know, maybe you shouldnt be doing it in the first place -Eric Schmidt
    1. Re:Who owns Microsoft? by Otter · · Score: 1

      Composite government funds own 82% of Microsoft according to this website.

      Given the implausibility of that figure, I'd prefer to see it confirmed by a less psychotic-looking source.

    2. Re:Who owns Microsoft? by Otter · · Score: 1

      I couldn't resist looking myself ... the Google Finance link in the story here clams 60% total institutional ownership. And the billion dollars the NY pension owns doesn't look that large when you remember that the story here is the company's buying back $40B worth. You might want to go elsewhere for your investment advice.

    3. Re:Who owns Microsoft? by Anonymous Coward · · Score: 1, Informative

      The website is run by a loon who doesn't recognize the authority of any part of the US government, much less even understand what the government is and its rules.

      State pension plans pay out to the state employees (bureaucrats) who retire after 20-25-30+ years. The "government" isn't a single entity, it's your friends, the neighbor down the street, that guy on the freeway. And the money goes to them after becoming eligible after many years. It's an old way of doing something (rewarding long-time employees) that is lost on modern businesses.

      Anonymous because this guy's a nut. And there are also a bunch of nuts moderating this hogwash upward.

  16. Dividends maybe? by Bryansix · · Score: 0

    I know this is a really new and novel idea for tech companies but there used to be this method that stocks had to put money directly into the hands of the shareholders. I think they called it a dividend or something. Now I know that no tech company has ever issued a dividend but maybe they can think of starting such a practice? Make it small like 2-3 cents per share and see how it goes. It's likely to be way more profitable for the shareholders then a stock repurchasing plan.

    1. Re:Dividends maybe? by ShadowRangerRIT · · Score: 1

      Microsoft offers a dividend and has for a few years. And I believe concurrent with this announcement they upped it, from 11 cents per share per quarter to 13 cents per share per quarter.

      --
      $_ = "wftedskaebjgdpjgidbsmnjgcdwatb"; tr/a-z/oh, turtleneck Phrase Jar!/; print
  17. Shoulda bought AAPL or GOOG instead by melted · · Score: 1

    1. Buy $40B worth of stock
    2. Wait for it to grow
    3. Sell it for profit
    4. Ruin AAPL/GOOG share price by a sudden influx of stock.
    5. Lather, rinse, repeat. You also get voting rights as a major shareholder.

    1. Re:Shoulda bought AAPL or GOOG instead by Actually,+I+do+RTFA · · Score: 1

      I think MS owns as much of Apple's stock as the DOJ will let them.

      --
      Your ad here. Ask me how!
  18. "It's Now Or Never" by Dystopian+Rebel · · Score: 1

    It's now or never,
    our bid is right.
    Yahoo, you're sinking
    'neath Google's might.

    We're desperate and it's geeeeeetting late.
    Icahn's our puppet and this chaaaaaaaaair won't wait.

    http://www.youtube.com/watch?v=lVMy0PFr8no

    --
    Rich And Stupid is not so bad as Working For Rich And Stupid.
  19. Which begs the question ... by Anonymous Coward · · Score: 0

    WTF did they sit on the cash for so long?

    Ny captcha is "stupid". How fitting.

    1. Re:Which begs the question ... by mollymoo · · Score: 1

      It rais...oh, fuck it. They haven't just been sitting on it, they've already bought back $40bn worth of their own stock this decade. Then there's the billions they've invested in XBox and Zune, plus they were trying to use a lot of money earlier this year to buy Yahoo!. You can't just buy $40bn worth of a stock overnight because the price would go through the roof. This new buyback is scheduled to take 5 years.

      --
      Chernobyl 'not a wildlife haven' - BBC News
  20. Buy Merril Lynch! by Anonymous Coward · · Score: 0

    Or Bear Stearns. Or Lehman Brothers.

    Generate some good press & goodwill with the American people.

  21. Better for shareholders than a dividend by paulthomas · · Score: 5, Informative

    Buybacks are more tax efficient. US shareholders would each be taxed at the dividend income rate for the dividend payment. By doing a buyback, shareholders who would have preferred a dividend can sell a portion of their shares, simulating a dividend, and then only paying the capital gains tax, which is typically lower than the tax for ordinary income or dividends.

    1. Re:Better for shareholders than a dividend by jgc7 · · Score: 1

      Buybacks are more tax efficient

      That was once true, but is no longer the case. Since the Bush tax cuts, qualified dividends and capital gains are both taxed at 15%. Dividends and Buyback are also bought with after corporate income tax dollars, so the corporate income tax treatment is the same.

      --
      70% of statistics are made up.
    2. Re:Better for shareholders than a dividend by paulthomas · · Score: 1

      You're right that they are not more tax efficient for those who take the buyback, but the tax treatment is better for those who choose to increase their stakes by not participating, as there is zero tax effect for these people. There is a net tax benefit to doing buybacks versus simply paying the same amount in dividends.

      All said, I'm not too optimistic either tax rate, given our mounting obligations as a country.

    3. Re:Better for shareholders than a dividend by jgc7 · · Score: 1

      I now see what you mean... the capital gains taxes can be deferred, but you must pay the dividend taxes today.

      --
      70% of statistics are made up.
    4. Re:Better for shareholders than a dividend by ardle · · Score: 1

      Someone who's cashing in their shares because they need the money will pay dividend taxes today.
      Does anyone know what proportion of shares are owned by individuals, rather than pension funds? Ok, there's MicroSoft employees, for a start.

  22. It's about the issuance of high-quality debt by matthaak · · Score: 5, Interesting

    Consider this move in the context of the financial system meltdown, with US Treasury bonds at 40 & 50-year lows.

    The *officially stated* purpose of this action is boosting MS share values. But they are almost completely going to deplete their entire cash reserve to buy back shares. From now on, they'll use debt -- bonds -- to finance expansion and development.

    They're bond rating is "AAA", which only 5 or 6 other companies and the government have.

    What's interesting is that with lending seized-up around the world, we know that money creation is basically halted. So, I wonder if there wasn't a little pressure on Microsoft to convert to a debt-financed operation & flood the market with new, high-quality debt, thus creating new money.

    1. Re:It's about the issuance of high-quality debt by seanadams.com · · Score: 1

      The *officially stated* purpose of this action is boosting MS share values. But they are almost completely going to deplete their entire cash reserve to buy back shares. From now on, they'll use debt -- bonds -- to finance expansion and development.

      Perhaps MSFT sees its operating income as being sufficient to cover its anticipated capital needs without having to dip into its reserves. In any case, typically those bought-back shares go into a treasury where they remain liquid and among of the total pool of shares outstanding. If they need cash later, they could simply sell the shares back to the public on the open market at a (hopefully higher) price. I.e. it is easier than issuing new shares. Your take on the macroeconomics is interesting, but I think Microsoft's strategy may be simpler than that.

    2. Re:It's about the issuance of high-quality debt by nschubach · · Score: 1

      You don't think that draining your cash on hand and using debt to purchase will drop that AAA rating? I'm no expert, but I'd consider rating a company AAA if I knew they had money to back any moves made. If I knew they were living on debt, I'd be more cautious.

      --
      Every time I start to have faith in humanity, I ruin it by driving to work between 7 and 8 am.
    3. Re:It's about the issuance of high-quality debt by matthaak · · Score: 2, Insightful

      Microsoft was given AAA rating when they announced the issuance of $6 billion in bonds.

      From the Economic Times:

      23 Sep, 2008 NEW YORK: Software giant Microsoft has been assigned the highest investment grade of 'AAA' by global credit rating agency Standard & Poor's, making it the first American non-financial corporate debt issuer to receive this rating in a decade.

      Also from Forbes:

      09.22.08 - Moody's Investors Service said it assigned an 'AAA' senior unsecured debt rating to Microsoft Corp. reflecting the company's position as the world's largest software company with a strong and defensible market position throughout its diverse core offerings. The rating outlook is stable.

    4. Re:It's about the issuance of high-quality debt by maxume · · Score: 1

      Are you certain that treasury shares remain outstanding? I was looking into it and got the impression that treasury shares were liquid but not considered to be outstanding (they don't have voting rights, don't get dividends, etc.).

      --
      Nerd rage is the funniest rage.
    5. Re:It's about the issuance of high-quality debt by CodeBuster · · Score: 2, Insightful

      They're bond rating is "AAA"

      Yes, but part of the reason for that was the large amount of liquid assets (marketable securities in the amount of $40+ billion) which meant that for any amount that they were likely to borrow the chances of them being unable or unwilling to repay their notes was practically non-existent. If they use most of the cash hoard to buy back equity shares then the future credit rating will more accurately reflect the likely future sales and licensing revenues of their flagship products (Windows and Office) which have hit a few bumps in the road over the past several years (the Vista debacle for instance) minus any liabilities (ongoing legal costs for example). This is almost certain to reduce their credit rating, perhaps to AA from AAA although nobody can say for certain (even the professional analysts) until Microsoft tries to float bonds or commercial paper in the open market subsequent to their using up the cash hoard.

  23. Re:It's funny, they've been having a lot of troubl by Locutus · · Score: 4, Insightful

    in the last 15 years, Microsoft has lost over $10 billion on Windows CE/PocketPC/Windows Mobile alone. The Xbox venture is probably already around $20 billion and yes, they've lost billions on everything outside of their ability to leverage the desktop OS monopoly. IMO

    I figure this is more to keep executives happy and employees happy as they have already seen 30% of their retirement vaporize this year alone.

    As far as Vista goes, it is forced onto OEM PCs so they get paid just like they did when Windows XP was preloaded. They might have changed the payment some because of different version packages but it's preload $$$ that keep flowing to their banks and only OEMs going away from Windows is going to slow that down. That's taking a while but gaining momentum every day.

    LoB

    --
    "Anyone who stands out in the middle of a road looks like roadkill to me." --Linus
  24. Thanks Ubergrendle by Finallyjoined!!! · · Score: 1

    I have an answer I can understand.

    However, $40bn is an awful lot of moolah, couldn't they improve shareholder value in some other more productive, or revenue generating way?

    --
    If I had an Ass, I'd call it Fanny Bottom, then I could slap my Ass; Fanny Bottom, on the Arse.
    1. Re:Thanks Ubergrendle by maxume · · Score: 1

      It isn't clear that they can spend a great deal more money on productive things. They currently spend more than $8 billion on R&D (In addition to the more than $18 billion they spend just operating the company) and still have income of more than $1 billion a month (and it is growing at a nice clip):

      http://finance.yahoo.com/q/is?s=MSFT&annual

      They already have an enormous R&D operation and would need to make massive additions (they are growing it anyway...) to increase spending in a way that would cut into the income.

      The share price doesn't make any damn sense to me. The current Vista ads look a lot like a sign of weakness, but I have trouble worrying about that, as the 'weakness' Microsoft is showing looks an awful lot like a strength that most other companies in any other industry would love to have (i.e., the biggest issue Microsoft has is that they are being compared to Microsoft).

      --
      Nerd rage is the funniest rage.
    2. Re:Thanks Ubergrendle by Actually,+I+do+RTFA · · Score: 1

      When I saw the Yahoo deal the very first thing I thought was that MS was failing shareholders.

      Where did you get your MBA? $40bn, just seen to secure their OS/Office suite dominance for another few decades is a bargin.

      --
      Your ad here. Ask me how!
  25. Vista Sales by Anonymous Coward · · Score: 0, Insightful

    "Vista has been such a tremendous flop"

    Do you have any idea what an idiot making such an inane assertion makes you look like?

    1. Re:Vista Sales by jollyreaper · · Score: 3, Interesting

      "Vista has been such a tremendous flop"

      Do you have any idea what an idiot making such an inane assertion makes you look like?

      The smart and observant kind of idiot?

      By any reasonable measure, Vista has been a tremendous flop. Just look at the kind of marketing money Microsoft is having to spend to convince people it isn't.

      1. Requires insanely beefy hardware while offering the average user little more functionality than XP
      2. Launched prematurely, too many bugs to count
      3. Lies and falsehoods about hardware requirements, too many machines sold as "vista capable" that obviously weren't.
      4. First service pack in development before the OS even shipped.
      5. Microsoft forced to unveil Windows 7 years early to convince people that better is coming.
      6. The name Vista is such poison that Microsoft had to base an entire ad campaign around the whole Mojave thing, getting people to try the OS without the Vista name because they knew just hearing "Vista" puts a bad taste in the consumer's mouth.

      Vista represents what, six years of development, $12 billion? And all that additional DRM crap is thrown in to reduce your system's performance.

      By any rational, unbiased inspection of the facts, Vista is a colossal failure.

      --
      Kwisatz Haderach
      Sell the spice to CHOAM
      This Mahdi took Shaddam's Throne
    2. Re:Vista Sales by ckaminski · · Score: 1

      I will also like to add:

          7. Poor wifi support - will not, by default, connect to a wireless LAN with a non-broadcasting SSID (XP SP2 inherited this poor behavior as well).
          8. I never ONCE downgraded from WindowsXP to WindowsME or Windows98 or Windows 2000 Professional

    3. Re:Vista Sales by drodal · · Score: 1

      "Vista has been such a tremendous flop"

      By any rational, unbiased inspection of the facts, Vista is a colossal failure.

      Now see here, which is it already? is it a tremendous flop, or a colossal failure?

    4. Re:Vista Sales by Veilrap · · Score: 5, Insightful

      Um get your facts straight:
      1. It doesn't require anything my 4 year old laptop doesn't have. 2ghz pentium M, 1gig of ram.
      2. The bugs are greatly exagerated the only relavent one: slow file operations has been fixed since sp1.
      3. Um I've run vista just fine on computers NOT marked as vista capable. And this is the same as #1 so you're just inflating your numbers.
      4. Service Packs are always in development. THIS IS A GOOD THING.
      5. And yet Windows 7 is still a ways down the road.
      6. But the ad campaign proved what it was meant to. The majority of the trash talk about vista is just trash talk.
      Extra: Vista has no "DRM crap" it only has support of certain DRM functionalities so that its now POSSIBLE for you to watch DRM protected content.
      By any rational, unbiased inspection of the facts, your post is a colossal FUD.

    5. Re:Vista Sales by Anonymous Coward · · Score: 0

      This is slashdot. Don't expect to be modded up when you speak the thruth about Vista...

    6. Re:Vista Sales by Anonymous Coward · · Score: 0

      And everything you've stated is entirely irrelevant. The only thing that is relevant is that the profitability of Microsoft's OS division has increased and that the adoption curve of Vista is on-track with that of XP. Everything else is pointless news.

      So, what exactly is the definition of a flop? In your case it would be something that you don't like, despite it being quite successful. This is a business discussion. You can keep your Slashtardedness out of it.

    7. Re:Vista Sales by Anonymous Coward · · Score: 0

      > Vista represents what, six years of development,

      No, it represents 18 months development. MS was developing a .NET based system as the follow on from XP. They failed to get it working in any manner that was supportable (eg new versions of CLR would have led to 'DLL Hell x 10') plus it was slow.

      So they tossed that away and threw together Vista from 2003 + what bits could be salvaged.

      Speculatively the .NET CLR based system was intended to cater for moving to different CPUs. This would have allowed MS to make a version that would run on Xbox-like hardware as an MS XPC. By being able to bundle their own hardware and software at a price considerably less, or more profitable, than Intel based machines they could remove the 'discounts' they give to OEMs and take a much greater share of the computer industry revenue.

    8. Re:Vista Sales by Anonymous Coward · · Score: 0

      troll

    9. Re:Vista Sales by Anonymous Coward · · Score: 0

      Does DRM slow down my system performance? C'mon, go and try Vista.

      I've been using it before SP1 and NO BSOD!! I swear. Also, my computer isn't a wonder, a Dell 1520. Way better than buying a Mac!

      And..oh, I use Linux, and it's fun to learn new things and play with new toys, but at this stage, there's no Linux distro that can compete with Vista in terms of app compatibility, stability and much more!

      If you don't believe, well, you're a colossal failure!

    10. Re:Vista Sales by Anonymous Coward · · Score: 0

      This is just Slashdot FUD and wishful thinking. Vista is doing just fine shipping on new machines, and has about 15% of the market share at this point. It is stable and efficient (in my experience at least; but I trust personal experience above Slashdot telling me how unstable it will be). You don't know whether MS was really forced to announce Windows 7 a year early or not. You don't have any proof that consumers who aren't Slashdot readers have a "bad taste" associated with it. All your other points are about launch glitches. Every software launch has glitches, especially when the software supports as many platforms as Vista. This doesn't make it a "colossal failure". Now most of them are fixed, and the software runs fine.

    11. Re:Vista Sales by Anonymous Coward · · Score: 0

      By any rational, unbiased inspection of the facts, Vista is a colossal failure.

      Wrong, wrong, wrong and wrong. It is hilarious that you called this an unbiased inspection of the facts .. LOL .. it is, in fact, insane fan boy ranting.

      There are levels of failure and colossal is not even close to where Vista is.

      Vista is the 2nd most popular operating system for personal computers on Earth, right behind Windows XP. It is outselling the Mac despite the fact that those little "I'm a fag ... errr I,m a Mac" commercials are on television every 5 minutes. Speaking of which, how does Apple not see how annoying those commercials are? I cancelled purchasing a Macbook because of those commercials.

      Take the fan boy filter off for a bit before posting. The Mojave ad was a damn good bit of advertising btw.

      Vista had and has a lot of bugs and problems. But only a fan boy without a clue says it is 100% failure. It is just not the grand slam Microsoft usually gets with a new OS release. More than anything the problem is that Windows XP is an extremely solid operating system already and people don't need to upgrade.

    12. Re:Vista Sales by registrar · · Score: 1

      By any rational, unbiased inspection of the facts, Vista is a colossal failure.

      Disagree, completely. By any reasonable assessment of the facts, Vista is pretty much a normal OS. By the facts (marketing) presented by Microsoft, Vista is colossal failure.

      It must be acknowledged that Vista is roughly what the market should have wanted: it's a pretty good replacement for XP. It's technically good, nifty, secure, etc. For people who expect OSs to "do what they need and get out of the way" then Vista is one of several options.

      But Microsoft doesn't want people to think of OSs like that. Hence the introduction of DRM ("it will make people give you money"), general overmarketing ("it will make you important" and "get you beautiful women"), etc.. Despite Microsoft's (and Apple's) best efforts, OSs are now basically commodities, and applications are king.

      I disagree with your conclusion because I think that if Vista was truthfully marketed ("it's just an OS, probably has some bugs, they'll get ironed out") then it wouldn't have been a colossal failure. Most of the facts you pointed out are true enough, though they shouldn't really matter. They show why Vista is not what Microsoft wanted it to be, nor what they told the market it would be, and therefore by Microsoft's own standard, Vista is a colossal failure. It is Microsoft's fault that they are measured by what is a fairly unreasonable stick.

      Unfortunately for Microsoft, if they turned around and told the truth as Linux distributors, Sun, etc. tend to, their share price would probably collapse. (Apple is an interesting anomaly. They tell you the OS will get you beautiful women [or men] so you feel good, but they don't really make their money from the OS.)

    13. Re:Vista Sales by Anonymous Coward · · Score: 0

      The only "DRM" I know in Vista that can truly piss off users is WGA.

      Upgrading your computer hardware, replacing defective hardware? Good luck with that; M$ will think you're an arrrr pirate and gently remind you to purchase the original (even though you already do)!

    14. Re:Vista Sales by Anonymous Coward · · Score: 0

      If vista is a termendous flop then I guess linux and OS.x must be absolute distasters that should be laughed at, after all neither has anything close to the share that Vista has. Vista has been hugely profitable for them, as profitable as they would have liked, NOPE, but still profitable. It's main competitor is not linux or OSX it is XP, must be a damn distaster when your only true current competitor is yourself.

    15. Re:Vista Sales by Anonymous Coward · · Score: 0

      By any rational, unbiased inspection of the facts, Vista is a colossal failure.

      I'm sorry, did you actually use the word 'unbiased' on Slashdot?

    16. Re:Vista Sales by Anonymous Coward · · Score: 0

      Hello? Is that you speaking, Ballmer?

    17. Re:Vista Sales by Raenex · · Score: 2, Informative

      3. Um I've run vista just fine on computers NOT marked as vista capable. And this is the same as #1 so you're just inflating your numbers.

      The fraudulent "Vista Capable" is well documented. It wasn't just about beefy hardware, it was also about poorly supported device drivers:

  26. And How Much From Gates? by Nom+du+Keyboard · · Score: 1

    And how much of this will come directly from Bill Gates, who has nominally been selling a million shares a month for seemingly forever now?

    --
    "It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
    1. Re:And How Much From Gates? by UnknowingFool · · Score: 1

      Hey don't blame Gates. He needs the money. Those Conquistadors aren't cheap you know.

      --
      Well, there's spam egg sausage and spam, that's not got much spam in it.
  27. But, wait... by No2Gates · · Score: 1

    Or you can buy 600000000 pair of The Conquistador shoes at the Shoe Circus

    --
    Every time you call tech support, a little kitten dies.
  28. Re:And, he's wrong. by Anonymous Coward · · Score: 0

    As opposed to the trillions of dollars vanishing in the stock market?

  29. Re:HP buying back 25,000 fired employees stocks by FourthLaw · · Score: 1

    Now then, if Microsoft could just buy all of HP's stock, then they'd be just like Apple with their own hardware platform...no, wait...on second thought...

    --
    Skilled in differentiating ravens from a writing desks.
  30. A very clear message to Yahoo by RealGrouchy · · Score: 5, Funny

    This sends a very clear message to Yahoo: Let us buy you, or we will buy ourselves instead!

    - RG>

    --
    Hey pal, this isn't a pleasantforest, so don't waste my time with pleasantries!
    1. Re:A very clear message to Yahoo by V!NCENT · · Score: 1

      That's exactly what I was thinking!

      Proving they were really about to spend the money.... Maybe now other companies will be convinced by letting MS become their overlord in the future.

      "Do you see how much money you could have gotten, eh?"

      --
      Here be signatures
    2. Re:A very clear message to Yahoo by rainhill · · Score: 1

      M$ should buy Apple and embrace Mac. ~ world will be a better place.

  31. Sign of a Dying Company by Nom+du+Keyboard · · Score: 5, Interesting

    Once I read an insightful article that pointed out how a stock buyback is the sign of a dying company.

    Why would it be that, you ask?

    Because a company who can't find a better place to invest their cash in expanding themselves into new areas (as opposed to merely buying back their stock) clearly has no vision or wish to be anything more than they already are.

    --
    "It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
    1. Re:Sign of a Dying Company by dave562 · · Score: 4, Interesting

      When a company owns, what... 80%+ of the desktop computer market, the lack of desire to be "anything more" might not exactly be considered failure.

    2. Re:Sign of a Dying Company by Anonymous Coward · · Score: 0

      Especially when they know they won't make another major release for a few years.

    3. Re:Sign of a Dying Company by nschubach · · Score: 2, Interesting

      Here's my question... pretend you are an investor, you see the stock value is going down. You see that they are shifting advertising routes, losing market share to competitors, losing money on XBox, Zune, whatever... What would entice you to push all your money into that company?

      How is that any different than a company doing the same thing. Sure, it raises stock price/dividend over the short term, but it shows you that they don't plan on doing anything outside the flow of "normal business" which they haven't really been practicing for a long time. What makes you feel comfortable about that buy?

      --
      Every time I start to have faith in humanity, I ruin it by driving to work between 7 and 8 am.
    4. Re:Sign of a Dying Company by the+eric+conspiracy · · Score: 1

      There is a lot of truth to that, however the logic has to be tempered by other considerations as well.

      Right now technology stocks as per the NASDAQ index are a historic low P/E ratio, and many companies, not just Microsoft are doing big stock buybacks. Assuming that the normal cyclical fluctuations come into play these companies will be in a great position in the future to raise capital or make acquisitions using stock to complete mergers.

      Microsoft may find that as time goes on it will be able to acquire somebody like Yahoo for a far lower effective price because of this buy back.

      This is a smart move by Microsoft that will pay back significantly in the future.

    5. Re:Sign of a Dying Company by dave562 · · Score: 1

      Absolutely nothing. Microsoft is a sinking ship. I have seen problems with Office 2007 that reveal such inherent flaws in the software that I am ashamed to even be associated with supporting it. I hope to have moved onto the next phase of my life by the time it implodes. There will be a time when the OSS world gets to the Windows XP/Office 2003/Exchange level of functionality. Once that happens, Microsoft is done. At that point they will fall back to the patents and try to sue any company that achieves enough market share. The world doesn't need Windows 2012. They need a refined XP free from security holes. I swear the best business strategy Microsoft could pursue would be to polish what works and then once it works, lock it down like Apple has.

    6. Re:Sign of a Dying Company by Anonymous Coward · · Score: 0

      Right now technology stocks as per the NASDAQ index are a historic low P/E ratio

      I was going to argue that historically low doesn't mean they aren't too high, but MSFT's P/E ratio is 13.61. That's low by most standards.

    7. Re:Sign of a Dying Company by Anonymous Coward · · Score: 0

      starbucks has been buying back stock. look where they are at.

    8. Re:Sign of a Dying Company by evilviper · · Score: 1

      Because a company who can't find a better place to invest their cash in expanding themselves into new areas (as opposed to merely buying back their stock) clearly has no vision or wish to be anything more than they already are.

      Meanwhile, a company that IS expanding themselves into new areas that they don't have as much expertise (as opposed to focusing on their core competency) clearly has no desire to improve their business/products, and would rather use all their spare cash to become a holding company... That is, until the next economic downturn, when they're forced to sell most of their holdings back (at a loss) to companies who actually have the core competency to run those OTHER types of businesses.

      And my scenario has TONS of real life examples...

      --
      Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
    9. Re:Sign of a Dying Company by the+eric+conspiracy · · Score: 1

      There is a theory out there that the P/E ratio should be 1/(fed funds rate) if risk with owning the stock was the same as owning a Treasury Bond.

      I'll let you draw your own conclusions about what the relative risks are right now.

    10. Re:Sign of a Dying Company by rainhill · · Score: 1

      M$ time is up. main man is leaving.

      its time for other youngsters, such as Google, Facebook to name a couple.

    11. Re:Sign of a Dying Company by srothroc · · Score: 1

      I'm sure there are also plenty of things they would love to be doing but can't really expand into because they're limited by antitrust legislation.

  32. right... by Anonymous Coward · · Score: 2, Insightful

    And we should trust you on your opinion about 'm$' because... you post things like these and have like 20 accounts. Right?

    I see you have an active journal and write mostly about all the supposed bad things happening with Microsoft. Did you perchance write a long JE about how they turned a record profit last fiscal year? No, you probably only wrote one about how their revenue declined %20 in one quarter. It's always fun to look at the small picture when it suits you, isn't it?

    I'm not even going to bother explaining how the stock market works here. I have a feeling it would do no good whatsoever.

    I don't particularly like or dislike Microsoft. I use some of their products, and they are OK sometimes. But people like you are really weird.

  33. Re:It's funny, they've been having a lot of troubl by Anonymous Coward · · Score: 0

    See pathetic loser. If you can at least READ the commentary right above yours you will see that IT IS A GOOD THING for M$, and is happening because they have WAY TOO MUCH MONEY they cannot spend it anymore, so they buy stock to increase share value.
    But pathetic morons that used to get beaten and have their lunch stolen at school can't understand that because they are locked at their mom's basements living on an oblivion of Linux and WoW.

  34. Ahh, and now we see the REAL reason why... by Anonymous Coward · · Score: 2, Insightful

    Now we see the REAL reason why the government failed to follow through on the punishment phase of MS's antitrust/monopoly furtherance conviction.

    Hell, in light of that one, even the most liberal left winger would suspend MS's punishment and spin up a story to cover that one.

    1. Re:Ahh, and now we see the REAL reason why... by Anonymous Coward · · Score: 0

      What's that reason? A break-up would have resulted in more value. CalPERS was for it.

      2/10

      Still anonymous. Still dealing with nuts.

  35. A better explanation by paulthomas · · Score: 1

    Parent post is at best hard to parse and at worst nonsense, and I don't like modding posts overrated. I have studied public finance extensively, and I also manage investments.

    You improve your P/E ratio, ultimately meaning that your dividends get spread across a smaller pool of stocks...

    PE is the ratio of Price (per share) to Earnings (per share). Any change in PE is incidental here, and is the result of the reduction in the denominator of EPS (Earnings Per Share). In fact, you might expect the PE ratio to stay the same, with the price moving commensurate to the reduction in shares and increase in EPS. When you say "stocks", you are referring to the stock of more than one company. You meant shares, which represent stock in a company. I'm not trying to be pedantic, but using the right terminology helps.

    When a company has excess cash, one of the things it can do is to buy back shares from shareholders who wish to sell shares. Doing this reduces the shares outstanding and therefore increases the ownership stakes of those shareholders who decide not to sell. Some shareholders might also use it as a tax-efficient dividend (at the capital gains rate), by selling a small fraction of their shareholding.

    makes the stocks more valuable as a blue chip commodity, raising their price. its a good strategy when you're taking a long view, and don't anticipate any future rapid growth.

    Being a blue chip company has more to do with having stable earnings and a clean balance sheet. Blue chip companies are the companies of conservative investors, "widows and orphans", and this has little to do with buying back shares, except that it is a way to approximate a dividend.

    The $40b is controlled by the board of directors, and ultimately belongs to the shareholders. its not a funny money fund. Ultimately the best use of the $ is to improve the shareholder's value.

    Parse error.

  36. Strategy by Sinbios · · Score: 0, Redundant

    1) Devalue your stock with pointless bidding war with Yahoo!
    2) Buy your own undervalued stock
    3) ???^H^H^H^H^H^H
    4) Profit!

    --
    Anyone can "stand up for what they believe", but it takes a very brave individual to change what they believe. - Loundry
  37. Comment removed by account_deleted · · Score: 5, Interesting

    Comment removed based on user account deletion

  38. "now-or-never deal" is a tracking (broken?) link by Khopesh · · Score: 1

    The link as provided above seems to get stuck in a microsoft passport redirector for me. That might be because I'm super-paranoid and I've disabled cookies, referrer ID, and lots of javascript, but it's certainly a tracking link that pushes through Microsoft's servers for that exclusive reason.

    You're better off clicking on http://www.mercurynews.com/ci_10532858?source=most_viewed instead.

    --
    Use my userscript to add story images to Slashdot. There's no going back.
  39. misleading title.. by mustafap · · Score: 1

    I thought it said:

      Microsoft To Buy Back $40bn of Its Servers

    Ah well, we can but dream.

    --
    Open Source Drum Kit, LPLC deve board - mjhdesigns.com
  40. Harsher than it sounds by Anonymous Coward · · Score: 0

    and a nursing of an orphaned baby-penguin for 6 months

    Those little beaks are sharp.

  41. wrong by Anonymous Coward · · Score: 0

    Are you trying to tell people that M$ did not have $60 billion three years ago and that they are not about to go into debt? Or are you trying to tell me that's a good thing? You claim to know how the stock market really works, do enlighten us about how a complete loss of money and confidence can be good for M$.

    Stalkers like you make twitter look sane and rational.

    1. Re:wrong by Anonymous Coward · · Score: 0

      I clearly remember you going on about how it was impossible that 'M$' had a 40B cash reserve, and now they've supposedly burned through 20 of 60B? Make up your mind, twitter.

    2. Re:wrong by Tenebrousedge · · Score: 1

      Stalkers like you make twitter look sane and rational.

      Thank you, I am going to paste that on my wall. :D

      --
      Those who advocate genocide deserve every protection afforded by law, and none afforded by common human decency.
  42. Re:Retarded Fantasy World by jedidiah · · Score: 1

    Vista is at best merely this years version of Windows.

    It's the continuation of a monopoly that's been in place since MS-DOS.

    You're gushing over being able to run Vista well on a machine that's
    priced the same as a Mac. That's really sad. Vista has singlehandedly
    wiped out the last vestige of the PC price advantage.

    If more regular consumers get over this "gotta be DOS compatable man"
    fixation then things will get REALLY interesting.

    --
    A Pirate and a Puritan look the same on a balance sheet.
  43. Re:It's funny, they've been having a lot of troubl by db32 · · Score: 0, Offtopic

    This is entirely off topic, but is your sig seriously a knick knack paddy wack/Dune combo? Mod me down all you want, but for the love of all that is holy please please someone stab him in the eye!

    --
    The only change I can believe in is what I find in my couch cushions.
  44. what if by unity100 · · Score: 1

    something big comes up and makes oses and/or office programs unnecessary and microsoft happens to have spent the cash in 'increasing wealth of its shareholders' to invest in it timely ?

    with what will it increase its shareholders' wealth then ?

  45. Re:Retarded Fantasy World by Anonymous Coward · · Score: 0

    What the fuck are you babbling about?

    "You're gushing over being able to run Vista well on a machine that's
    priced the same as a Mac"

    WTF??? Go get mommy to read it to you slowly and explain it to you slowly...

    Hint: PC price Mac price

  46. uhhh by Anonymous Coward · · Score: 0

    whose stock ISN'T below where they were in January? dumbasses.

  47. Re:It's funny, they've been having a lot of troubl by westlake · · Score: 1
    Vista has been such a tremendous flop, I wonder what their internal projections are looking like for the next five years
    .

    Top Operating System Share Trend

    October 07
    Vista 8%
    OSX 6%
    Linux 0.5%

    August 08
    Vista 18%
    OSX 8%
    Linux 0.9%

    Net Applications tracks users on the web not corporate licenses.
    OEM Vista is almost exclusively Vista Premium with 64bit Vista becoming increasing visible even at Walmart. HP Pavililion
    This is a real intrusion on territory claimed by the Mac.

  48. what server room ? by unity100 · · Score: 1

    whereas IIS servers generally serve single websites, linux webservers are generally run by shared web hosting companies, giving out close to 300 websites (in separate accounts) from each box.

    that is the way it is in the datacenter farms that are crammed with boxes these days. (especially theplanet.com is biggest, but there are many).

    there is no server beachhead for microsoft. what generally happens is that, when an already locked in small business running microsoft products realizes that they need a web site and they can host it, they just put up a box with IIS in-house, serving internet. voila - another IIS server added to microsoft's growing list of servers using IIS. how many websites does that box host ? one.

    1. Re:what server room ? by maxume · · Score: 1

      You'd have to ask them about their actual costs and levels of use, but hosting companies charge about the same for Windows hosting as they do Linux hosting:

      http://order.1and1.com/xml/order/MsHosting

      (you'll have to click and compare to Linux hosting for yourself)

      --
      Nerd rage is the funniest rage.
  49. let me tell you what retarded fantasy is by unity100 · · Score: 1

    The fantasy you think you are living is retarded.

    you bought a screaming computer from newegg, loaded vista on it, and its screaming, right ?

    wake up call - if you have loaded xp on it, it would have taken you to the stars. thats how vista falls back in system performance behind xp.

    no surprise though, you are a former mac user. you dont know anything about how versatile and powerful pc platform is, and 'just working' is something that is not accepted as the norm in pc world. if something 'just works' it means it can probably do more.

    welcome to the world of pc.

  50. Re:Retarded Fantasy World by Anonymous Coward · · Score: 0

    I call bullshit. I have never met anyone who switched from Mac to Vista and was happy about it, least of all anyone on slashdot.

    I too buy cheap 500-600 machines to run windows on. But like any smart person, I put XP on it, and use it to play video games, not for any real work.

  51. Re:It's funny, they've been having a lot of troubl by unity100 · · Score: 1

    you should have read the other commentaries on how it is bad, before ranting away.

  52. Re:Retarded Fantasy World by QZTR · · Score: 1

    "You're gushing over being able to run Vista well on a machine that's
    priced the same as a Mac."

    No he wasn't.

    Apart from the crippled Mac mini which barely meets the price point at $599, which Mac can you get for "5 or 600 bucks"?

    No, I'm not going to accept the Mac mini, so don't bother unless you find one that is feature comparable to a 600 dollar tower, including expansion slots.

    --
    To quote LongNoi "QZTR was right and won't leave me alone because I called him a moron when I was wrong" FYS
  53. Anonymous Coward by Anonymous Coward · · Score: 0

    Why doesn't MS just do the Wall Street Bailout and save us tax payers. Then it would be MS-USA.

  54. Re:Retarded Fantasy World by Jorophose · · Score: 1

    ... Why was this modded insightful, exactly?

    "lol everybody who hates windows just runs a mac"

    Yeah, like the fact that linux distros continue to outdo MS for new features, and are the ones MS is playing catch-up to... This totally makes vista great! Check out win+tab! Zomg! Too bad compiz did this years ago. Too bad xcompmgr did hardware compositing ohso long ago. Zomg! Cancel/Allow! Too bad sudo was pretty much created by linux users.

    Delusional? I think somebody saying they are in love with a company is delusional. How is this different than somebody telling you Procter & Gamble are such a great company?

  55. Microsoft hostile takeover bid for Microsoft by David+Gerard · · Score: 1

    That's what the headline should have been.

    (I'd write the story myself but Fake News Nightly got there first.)

    --
    http://rocknerd.co.uk
  56. Microsoft to help Lower Gas Prices by erica_ann · · Score: 1

    Sigh.. I am so sick of Microsoft news... why don't they donate a lot of that money and help our economy or donate to help bring the gas prices down if they REALLY want to make some worthwhile news. Now, THAT would be attention grabbing and worth reading.

    1. Re:Microsoft to help Lower Gas Prices by Alioth · · Score: 1

      Because the amount of money they have is a tiny drop in the ocean compared to those things. It would have little measurable threat.

      To put it in perspective, the insurance derivatives that people are panicking about at the moment - at the end of 2007, the face value of these derivatives was US$60,000 billion. That's over *five times* the size of the entire US economy. $40B won't even scratch it. Even the $700B rescue plan seems to have the air of King Canute about it, if the shit hits the fan with that lot.

  57. It's a Dog by mpapet · · Score: 0

    When I bought it, it was doubling and splitting regularly

    Yes... well those splits definitely destroy value. Roughly 2% per split goes to the financial firm doing the split. Buy-backs are also a bit of a value destructor too so don't bank on it.

    I'd like to see it earn its keep again for a while before I sell it.
    Common sense should tell you that Microsoft's days of being a growth stock are well behind it. Do not stay married to the stock. If it is not performing *today*, sell it and buy one that you think has a better future. I would recommend some kind of ETF over individual stocks though. Playing the stock market as an average individual is a fools game.

    --
    http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html
    1. Re:It's a Dog by Reziac · · Score: 2, Interesting

      I don't play the market. I've had the same stocks for a long time -- some for over 35 years (mostly stuff like Exxon and Philip-Morris). Bought a small chunk of M$ about 10-12 years ago, but it's not a major investment by any stretch. And 2% per split isn't a bad cost to pay when your money is being doubled every 6 months, as used to be the case with M$. I don't think it will ever do that again, but I'd like to see it up in its midrange before I'd consider selling it (if I do so). I've observed that it's never good policy to sell when an overall-sound company's stock is in a doldrum... because eventually it WILL go back up, and by selling early you did nothing but screw yourself.

      I'm not a fan of rapid stock market growth, tho -- I like steady and reliable and stable, so the company isn't utterly at the mercy of people who just want quick profits. IMO companies being beholden first and foremost to shareholders, and therefore to improving the short-term bottom line rather than looking to the company's long-term health, has done a lot of damage.

      --
      ~REZ~ #43301. Who'd fake being me anyway?
    2. Re:It's a Dog by dcam · · Score: 1

      I don't play the market. I've had the same stocks for a long time -- some for over 35 years (mostly stuff like Exxon and Philip-Morris).

      Haven't you found that the share certificates become sentient and try to kill you if you own them that long?

      --
      meh
    3. Re:It's a Dog by Reziac · · Score: 1

      Maybe that's why my broker is always after me to "diversify" ;)

      --
      ~REZ~ #43301. Who'd fake being me anyway?
    4. Re:It's a Dog by falconwolf · · Score: 2, Informative

      Yes... well those splits definitely destroy value.

      Over an extended period stock splits increase market value. Say X's stock sells for $100 then does a 2 for 1 split. Within months the sales price may be $60, a $20 increase.

      Buy-backs are also a bit of a value destructor too so don't bank on it.

      Buy-backs are an attempt to keep the value in a stock. When a corporation announces buy-back, if I were a stockholder I'd be worried the board is expecting hard tymes so I may unload the shares I own. There is one other reason a corporation will buy back stocks, if they are concerned someone will try to gain control of the company. Buying back stocks removes stocks from the market and may increase the cost of the remaining stocks making it more expensive to gain control.

      Common sense should tell you that Microsoft's days of being a growth stock are well behind it. Do not stay married to the stock.

      Sure, if you only care for growth sell the stocks. But if you're nearing retirement then you want to shift your investments to income producing investments.

      Playing the stock market as an average individual is a fools game.

      Shifting investments is playing the game. A solid method of investing is using Dollar cost averaging, consistently investing money periodically.

      Falcon

  58. Re:Retarded Fantasy World by Anonymous Coward · · Score: 0

    it is such fun to come and watch fools like you sit around in open source/Linux/Mac user population heavy sites

    Yeah, you're here too, dickhead.

  59. Re:It's funny, they've been having a lot of troubl by jollyreaper · · Score: 1

    This is entirely off topic, but is your sig seriously a knick knack paddy wack/Dune combo? Mod me down all you want, but for the love of all that is holy please please someone stab him in the eye!

    Yes, yes it is. You no likey? The last one was Blacksploitation Greek theater.

    Hey, I hear that Cat Oedipus is one bad mother--
    Shut your mouth!
    But I'm just talkin' 'bout Oedipus!
    Then we can dig it!

    --
    Kwisatz Haderach
    Sell the spice to CHOAM
    This Mahdi took Shaddam's Throne
  60. Re:Retarded Fantasy World by Anonymous Coward · · Score: 0

    I second that. I have not seen any migration from Mac to Windows; rather the opposite. In fact the last technically literate person I knew still using Windows switched a few months back; I now know literally no-one I consider technically knowledgable who uses Windows as their primary machine.

    Gaming machines are a different matter, I know a couple of people who keep them around. Games remain the only good reason to run Windows, now more than ever.

    Not that I'm a fan of Apple mind you. They're as evil as MS, just more competent (and with better taste). Still, for now, the apps keep my tied to one of the big two, and OSX is a no-brainer.

    Which reminds me - fuck Mono. When is someone gonna port Cocoa to linux? ; )

  61. ha, ha by Anonymous Coward · · Score: 0

    > Stalkers like you make twitter look sane and rational.

    This is absolutely pants, considering pretty much everyone knows who
    posted the comment to begin with.

    You never cease to amuse.

  62. Re:Retarded Fantasy World by Phroggy · · Score: 1

    If more regular consumers get over this "gotta be DOS compatable man" fixation then things will get REALLY interesting.

    Consumers don't have a fixation with DOS compatibility. Their fixation is with being able to run all the obscure applications they've become accustomed to, and have working stable drivers for all their hardware. If all the apps they want to run are available for another OS, they're free to switch. If there is a suitable alternative available, they're free to switch. If they don't think one of these is true, then they'll stay until they have a compelling reason to investigate and try to determine whether they can switch.

    Note that this investigation may be beyond the user's ability - if they don't understand that Internet Explorer is a web browser, they can't very well determine whether Safari would be a suitable replacement.

    --
    $x='S24;r)>63/* h@<5+oZ)32"5cz';$me='phroggy'x$];
    $x=~y+ -xz+\0-Tx+;print$_^chop$me for split'',$x;
  63. Re:HP buying back 25,000 fired employees stocks by Locutus · · Score: 1

    on second thought is right. Even if Microsoft had HP's hardware they would still be missing a clue along with any ability to do even moderately good design work.

    I really would love to see Microsoft purchase one of the big hardware vendors. It would be their end because every other hardware vendor would start dropping Windows like a piece of shattered glass.

    LoB

    --
    "Anyone who stands out in the middle of a road looks like roadkill to me." --Linus
  64. Of course it all makes sense now by Orion+Blastar · · Score: 1

    Step #1 Sell off a lot of MSFT shares on news that a new Windows operating system will be released in a few years. It drives the price up and makes Microsoft a lot of money.

    Step #2 Make sure that Windows Vista bombs and has lots of bugs and incompatibilities with legacy software and hardware.

    Step #3 Phase out all older versions of Windows except Windows XP. Sell as many copies of XP as you can from wharehouses. Raise $40 billion in XP sales.

    Step #4 After making billions off record XP sales, stop selling XP and release a service pack for Vista that has more bugs than ever.

    Step #5 Watch as software reviewers give Windows Vista the worst reviews ever.

    Step #6 Announce a Windows 7.0 that will fix Vista issues in a few years.

    Step #7 Laugh at all of the bad reviews of Vista and Windows 7.0, but wait for the economy to take a dive due to all the issues that Vista has caused.

    Step #8 Right as the US and world economy goes into a recession and buy back $40 billion of MSFT stock at firesale prices with a weak US Dollar and low MSFT price.

    Step #9 Wait a few years for the economies to get better and ready to release Windows 7.0 and then sell those MSFT shares at record prices.

    Step #10 Repeat the whole process with Windows 7.0 and laugh all the way to the bank.

    Bill Gates borrowed from Mel Brooks that one can make more money from a flop than from a hit. :)

    --
    Remember, Slashdot does not have a -1 disagree moderation, and no, troll, flamebait, and overrated are not substitutes.
  65. Re:It's funny, they've been having a lot of troubl by db32 · · Score: 1

    You know there is a special place in hell reserved for you right? :)

    --
    The only change I can believe in is what I find in my couch cushions.
  66. Re:And, he's wrong. by Anonymous Coward · · Score: 0

    Saying the dollars are "vanishing" is kinda stupid...
    I can claim the plate I hold is worth $1 trillion dollars *crash* oh no!! $1 trillion dollars just disappeared!!

  67. why not have MS-USA by Anonymous Coward · · Score: 0

    Why doesn't MS just do the Wall Street Bailout and save us tax payers. Then it would be MS-USA.

  68. Why not spend $40bn on other stock. by falconwolf · · Score: 1

    Because Microsoft isn't an investment bank. And that's a good thing with Wall Street going down the tubes.

    Doesn't make sense to me, come on you stockmarket guys, explain the rationale.

    Microsoft has expertise in software not the stockmarket. Now if they want to Bill and Steve could hire financial experts and start their own investment bank but that's not MS's strength.

    Falcon

  69. server market share by falconwolf · · Score: 1

    Much of you say may be true but Microsoft is still growing.

    Falcon

  70. The penguin complained too by Anonymous Coward · · Score: 0

    Man-boobs and no milk.

  71. well by unity100 · · Score: 1

    i can tell you, as a shared host, windows hosting is SO low in demand that many shared hosts do not offer it.

    1and1 is the most disastrous and infamous host in the business btw, from the reviews and horror stories, and what i experienced first hand trying to bail out clients from there. avoid like a plague.

  72. This is MS betting that Obama will be elected by Anonymous Coward · · Score: 0

    and make dividends taxable as ordinary income at >30%. A more efficient way to return their profits to shareholders will be through increased share prices, taxed as long-term capital gains whose tax rates will not increase as sharply.

    Bah! What am I saying? Everyone knows that changing laws about taxation doesn't affect anyone's behavior....right?

  73. Re:It's funny, they've been having a lot of troubl by jollyreaper · · Score: 1

    You know there is a special place in hell reserved for you right? :)

    I'm not so sure. The place is so popular, it's hard to get reservations.

    --
    Kwisatz Haderach
    Sell the spice to CHOAM
    This Mahdi took Shaddam's Throne
  74. Google is a one-trick pony too by peter303 · · Score: 1

    MicroSoft has had four winners over its history- languages, DOS, Windows, and Office- but no home runs in the last decade.
    Google has had one big winner- its ad program. GMail-WebOffice is poised to make money. Video(UTube) ahs been a huge capital sink so far.

    1. Re:Google is a one-trick pony too by Locutus · · Score: 1

      visual basic is a winner? if anything it taught people how software should not be written. DOS, you want to say DOS was a winner when they had to use illegal business practices to protect it? Same goes for Windows, it is where it is because they leveraged a monopoly hold on the market to keep other OS vendors from growing. Read some history. And IMO, they get one star for bundling a bunch of office apps together. But again, they used Windows to move MS Office.

      As far as Google goes, their ads are un-intrusive IMO and not annoying like many flash/animated ones on other sites. They also don't own the base platform for computing like Microsoft did/does and only support products which run on that base platform. ie Google is not forced onto a required device like Windows is forced on PC. And when I say forced, I mean OEMs have contracts which restrict their ability to sell other PCs running something other than Windows. No OEM can advertise they sell Linux PCs and many projects never got approved because of kickbacks for advertising Microsoft stuff would be eliminated if a Linux based product was sold. I don't see Google doing these things. They could but they have not shown that is their nature. Microsoft shows this as their nature to the core of their management and business ethics and has done so for 20+ years. And many who understand Microsoft know that many of those projects which have lost 10s of billions of dollars where designed to keep the competition from growing into a threat to Microsoft's desktop Windows position.

      BTW, Intuit is a one-trick pony too. BFD

      LoB

      --
      "Anyone who stands out in the middle of a road looks like roadkill to me." --Linus
  75. Foreign Exchange ? by Anonymous Coward · · Score: 0

    Maybe Bill wants to diversify out of the US Dollar

  76. Please recalculate by mpapet · · Score: 1

    Your reasoning is not disciplined.

    Over an extended period stock splits increase market value. Say X's stock sells for $100 then does a 2 for 1 split. Within months the sales price may be $60, a $20 increase.

    you are concatenating two separate events.

    Event 1: Stock spilt. This is designed to lower the price of the stock so it is traded more. The only benefits are passed to the brokerage industry in the form of generating more trading fees. Period. There is financial management fees that the company in question typically spends to perform the split. That's where there is a loss of 2%.

    Event 2: Stock price rises. This happens because investors feel the future of the company is great. NEVER assume one goes hand-in-hand with the other.

    Sure, if you only care for growth sell the stocks.
    The grandparent made clear their desires included watching the value of the stock rise. I think you would agree it won't in the near future. Don't spin this off into a different direction as a way to discredit my statements.

    Buy-backs are an attempt....

    The entirety of your opinions are riddled with exceptions, half-truths and common sensical ideas that have no basis in reality. You need a far deeper understanding of the structure of corporations and corporate charters and far more detailed understanding of publicly traded assets.

    Please, take this as an opportunity to learn more rather than some kind of hostile post.

    --
    http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html
  77. Re:It's funny, they've been having a lot of troubl by Anonymous Coward · · Score: 0

    You do realize that on this scale a flop is STILL Bigger than anything else out there?

    Linux - 0.93%
    Macs - 7.86% (Includes both intel and older power PC)
    Vista - 17.85%
    XP - 69.49%
    2000 - 1.93%

    the only reason they consider it a flop is because it didn't completely replace XP as fast as they wanted. And these are OSes the computers are RUNNING, not nessasairly what they were sold with so OEM doesn't count unless its still running OEM.

  78. Re:It's funny, they've been having a lot of troubl by Locutus · · Score: 1

    AC, there are dozens around me who have purchased new computers in the last 1.5 years and are running Vista because that is what the computer came with.

    Don't fool yourself into thinking that OEM preloads has little to do with Vista uptake. Just like the first 3 years of XP and Win2K before it, the preload market is what drives new Microsoft APIs into the hands of willing purchasers.

    Besides, WTF is the AC bringing up "flop" for when nobody else even mentioned it. Talking about a flop, why would Microsoft spend so much time on a new OS and not make it modular? I mean they come out with a new OS almost 2 years ago, put over 5 years into, and they have to bring Windows XP back from the dead to shop on these little laptops everyone is craving for? Even then, the Windows versions usually require 2x the system RAM and 2x the HD storage a Linux system requries and often times the Linux distro is packed with software. THAT my AC friend, is a flop IMO.

    LoB

    --
    "Anyone who stands out in the middle of a road looks like roadkill to me." --Linus
  79. Introducing... by Anonymous Coward · · Score: 0

    ...the latest in a long line of Twitter sockpuppet's... symbolset

    Please for the love of honesty and truth: send this sockpuppet into the flames of karma hell
    http://slashdot.org/~symbolset
    Thank you

  80. T3 = Typical Twitter Trolling by renegadesx · · Score: 1

    It can be argued that M$ did not survive the dot com crash

    The fact that they still exist in some sort of capacitay at all says you are wrong there. Even Sun Microsystems who suffered greatly in the dot com crash survived it.

    Their stock price has been flat over 10 years and they have blown through $60 billion in cash over the last three

    The rate at which their profits are increasing is slowing but it is still churning mega profits.

    All of their new products have been financial failures

    You are about a year late, the Xbox 360 has actually broken that curse and now the Xbox platform is now profitable.

    Essentially, they are worth less than half what they were worth ten years ago and are about to take on debt.

    Look at their net worth and tell me that again with a straight face.

    Google, on the other hand, has done great. They will survive on the kind of advertising that has kept newspapers publishing forever - small and large business benefit from it. This is a product that will always yield another crop.

    You have some brown stuff on your nose, you may want to wipe that off ;)

    I am no fan of Microsoft but truth comes first. Twitter, you just got your ass handed to you... again!

    --
    Make SELinux enforcing again!
  81. Not enough "M$" to be Twitter by Anonymous Coward · · Score: 0

    The style and tone of symbolset's writing isn't rabid enough to pass for Twitter's. I get the impression that symbolset's preference of FOSS systems over Microsoft comes from reason and experience, not thoughtless ideology.

    I have a hard time believing that Twitter could suppress his colossal ego long enough to keep a sockpuppet under the radar like that.

    Maybe he's a good enough performance artist to tell "himself" to be reasonable, but I doubt that Twitter knows the meaning of the word "reasonable".

    1. Re:Not enough "M$" to be Twitter by Anonymous Coward · · Score: 0

      Steve Milano is a tardbus.