Motley Fool Writes Off Microsoft 404
The Vista disaster has caught Wall Street's attention before but I've never seen the popular press understand the issues like this argument in the Motley Fool. The opposing argument is a weak statement of faith, essentially "as it was in the beginning is now and forever shall be." "You don't need to watch the 'I'm a Mac, I'm a PC' commercials to see that Microsoft is taking a beating. You see it in the company's financials where its online unit, incredibly, is operating at a loss; overheating Xbox 360 consoles find the company taking a huge warranty hit for a system losing market share to the Wii; and the upgrade wave of its flagship operating system has been more of a ripple than a tsunami. That last point is important. This was supposed to be Microsoft's final feast, the major last hurrah for its Windows Vista operating entry and its Office 2007 suite of applications before the inevitable embrace of cheaper open source operating systems and Web-based apps... In fact, even Microsoft will tell you that its fortunes peaked several months ago."
Who thinks The Fool is a good source? (Score:5, Informative)
Microsoft Tops Street in 2Q; PC Sales Up
Friday January 25, 9:45 am ET
By Jessica Mintz, AP Technology Writer
Microsoft Beats Street in 2nd Quarter; Vista, Office, Xbox Games Helped
SEATTLE (AP) -- Microsoft Corp. forecast a rosy 2008 -- despite broader economic worries -- after it blew by Wall Street's expectations for a second consecutive quarter.
"We will be impacted just like everybody else," if the U.S. falls into a recession, Chief Financial Officer Chris Liddell said Thursday. "But overall, we feel very optimistic about our second half."
Company officials touted rising sales in each of Microsoft's business divisions, a slate of important upcoming business-software launches and the growing contribution from sales in non-U.S. markets.
Microsoft raised its outlook Thursday for the rest of its fiscal year, which ends in June, matching Wall Street's forecast and sending shares up in after-hours trading.
The software maker's quarterly earnings jumped 79 percent to $4.71 billion, or 50 cents per share, from $2.63 billion, or 26 cents per share in the second quarter a year earlier. Quarterly revenue climbed 31 percent to $16.37 billion from $12.5 billion.
Uhh... (Score:5, Informative)
http://www.news.com/8301-13860_3-9857633-56.html?tag=newsmap [news.com]
They Must Be Short (Score:2, Informative)
If the Motley Fool and others wanted any dignity at all, they'd shut up and do this sort of reporting for non-event days.
What about the Bull Argument? (Score:5, Informative)
So much for Motley Fool writing off Microsoft. Typically - guess which article gets highlighted in
Re:Hasta la Vista (Score:4, Informative)
John Connor: No, no, no, no. You gotta listen to the way people talk. You don't say "affirmative," or some shit like that. You say "no problemo." And if someone comes on to you with an attitude you say "eat me." And if you want to shine them on it's "hasta la vista, baby."
The Terminator: Hasta la vista, baby.
John Connor: Yeah but later, dickwad. And if someone gets upset you say, "chill out"! Or you can do combinations.
The Terminator: Chill out, dickwad.
John Connor: Great! See, you're getting it!
The Terminator: No problemo.
but wall st. disagrees (Score:3, Informative)
"Stocks rose sharply for a third straight session Friday as investors cheered upbeat profit reports from big names like Microsoft Corp. and were reassured by word of a possible buyout of a trouble bond insurer."
and
"Microsoft's bright forecast and earnings that outpaced expectations lent strength to a notion emerging in recent days that perhaps Wall Street had been too pessimistic in its reading of the economy."
So the Fool can say what it likes - it's always a good story to bash M$, but the people who know and who put their money on the line reckon they're wrong. Hell, I wish I had "only" $20Bn in the bank
Re:Interesting (Score:4, Informative)
Windows XP Home Edition replaces Windows Me
Re:Interesting (Score:5, Informative)
http://games.slashdot.org/article.pl?sid=07/10/26/2052251 [slashdot.org]
http://xbox360.ign.com/articles/847/847658p1.html [ign.com]
Yes, 2 quarters in a row now, it has turned a profit.
Re:What about the Bull Argument? (Score:2, Informative)
Makes sense. (Score:2, Informative)
Guess M$ will have to dip into that $20 billion cash flow reserve of theirs and 'ride this one out'
Oh! I completely forgot: Apple Smuck and Linux OSS** are coming with a vengence.. to a t.v. advert near you.
**Please note that I dual-boot Vista and Kubuntu, though none of the *real users* in my company (you know - the guys who do 'business' and pay for all this stuff) are likely to change OS in the near future since they all seem pretty content achieving what they need to achieve using MS Office, Project, Adobe, SQL Server, Outlook and heaps of intranet apps that run on IE7 (some kool kids are even using Firefox now!) etc. etc. - all running on XP or Vista.
Re:Interesting (Score:1, Informative)
Re:In other news (Score:3, Informative)
Also, Vista Ultimate is sold for some $200 (OEM) to $210 (Upgrade if you insist on retail packaging). Using the $400 retail price tag for comparison doesn't work out because Leopard's an upgrade (and some $80 cheaper at that) and neither Vista's nor XP's retail editions account(ed) for the majority of sales.
Also, AFAIK, the illegal part of MSFT's monopoly has ended, unlike the continued support of XP in general [wikipedia.org] or support by MSFT's current productivity suite [wikipedia.org].
Long story short: Try trolling people who don't know anything about the topic at hand or find better arguments.
Re:Most interesting part of article... (Score:4, Informative)
If MS didn't have to pay dividends to get investors, they wouldn't. Because having 60B and not trying to get 70B is just dumb.
Re:In other news (Score:3, Informative)
Expecting to see any accurate reporting about Microsoft on Slashdot is foolish naivety at best.
I take it you're desktop only type guy? (Score:3, Informative)
I take it you have never heard of: IBM, SAP, Oracle, or Sun Microsystems. You may be surprised to learn that, to many people who are serious experts in enterprise level system, it's microsoft that's the joke.
Yes, msft rules the weenie desktop market, but microsoft does not rule anywhere else.
IMO: those who think that IT systems start and end with desktop PCs have no business posting about "major corporate purchases." Frankly, you don't know what you're posting about.
Re:Who thinks The Fool is a good source? (Score:4, Informative)
tells a different story.
The income is good, but they've just released a new product. That's to be expected.
Looking at the balance sheet though, their numbers are not so good. The actual value of the company is weakening while at the same time their liabilities are rising - at a time when their liabilities should be reducing due to the end of the development costs of Vista.
And then even worse their cash situation is looking very bleak - especially when you consider that the US is heading for a recession (to survive a recession you need cash and as much of it as you can get).
The have a new product out which should be selling for cash - their balance sheet should be rising as should their cashflow. It isn't.
Re:In other news (Score:5, Informative)
My company went from 95/98 directly to XP. Even with Office we still have most of the installs at Office 97 or 2000 with only a few Office 2003 copies.
When we upgrade, I expect it will be directly to "Windows 7". And since I'm the IT Director, my expectations will probably prove accurate.
Being a small company, the cost of upgrading is prohibitive, so we squeeze the last bit of usage out of our expenditures.
Re:In other news (Score:5, Informative)
And after all if you had invest in Apple last year you would have had 117% returns. Apple is overvalued... plain and simple...
Re:In other news (Score:4, Informative)
What was it, really? Sure, it's shipped on (some) new machines, but is there much reason to upgrade for most, the same way XP was?
IMHO, no.
Re:It's neither. (Score:5, Informative)
They have been paying out a lot of dividends over the last few years, and have been putting money into new tech. Depleting their cash reserves is not a sign of weakness, it is a purposeful response to shareholder complaints. A few years back they faced a lot of criticism from shareholders because they had to large of a cash reserve. Why is this a problem? Cash reserves are not making the company (or shareholders) any money. If a company can't find anything to do with their cash reserves that they think will meet their required rate of return on investment (ie: invest in R&D, capital, or other ways to improve the future profitability of the company), they should return that money to shareholders via dividends.
Their current depletion of cash does not suggest that they will be in debt in a few years. Once they have lowered their cash reserves to a level deemed appropriate by their shareholders, they will change their strategy. So to answer your question, yes there is a huge difference in eliminating 40 billion in reserves and taking on 40 billion into debt.
Re:Most interesting part of article... (Score:3, Informative)
Last I heard, Bungie wasn't doing so well after MS took it over, and is now departing the company:
http://games.slashdot.org/article.pl?sid=07/10/05/1526212 [slashdot.org]
http://games.slashdot.org/article.pl?sid=07/10/15/1811248 [slashdot.org]
Successful acquisitions don't pack up and leave your company after a few years. They integrate into your company and remain a part of it.
Sybase licensing? What a terrible deal. "MS" SQL Server? Nobody buys that.
Powerpoint? Who uses that?
Those are some older acquisitions, and granted, they worked out better. This was before MS had assembled MS Office into a powerhouse and cash cow. Now that they have MS Office, they're grasping at straws trying to buy other companies, like they did with Bungie, thinking it would work well with their Xbox project. Guess not.
To drop the sarcasm for a moment, Foxpro was bought to kill it. It wasn't an accident that it was allowed to fall behind Access.
That's not what I'd call a successful acquisition. You don't gain loyal customers by buying up their vendor, then killing it, and trying to force them to move to some other product which doesn't work as well for them. Everything I've heard about Foxpro is that all the Foxpro users were totally pissed off that MS killed it. I wouldn't be surprised if most of them have migrated to non-MS solutions.
On planet Slashdot they are a company teetering on bankruptcy, but back in the real world they are a hugely profitable, powerful organization.
I fail to see how losing $40 billion in 4 years equals "profitable". It reminds me more of MC Hammer, who made tons of money very quickly as a pop/rap star, then spent that money like there was no end to it, but after his pop stardom died out (which wasn't very long, one album perhaps?), his money soon ran out too. You don't stay rich by spending all your money. They might be pleasing some shareholders by giving them dividends now, but that still doesn't equal profitability.
How's Xbox doing? Last I heard, it wasn't doing so hot. It's not a complete bust, but I don't think it's profitable either. And how's the Zune doing? Last I heard, it was a total flop.
Face it: MS has not done anything very successful and profitable besides Windows, Office, and Outlook/Exchange. They keep trying to expand into new markets, but it never works very well. They're not teetering on bankruptcy; no one's said that here. But if they continue to blow huge sums of money on ill-conceived projects like Zune, which either never earn back their investment, or take far too long to break even, they're not going to continue to stay huge and powerful. Meanwhile, the competition is eating away at them, slowly but surely. They're already losing browser marketshare in a significant way with Firefox and Safari. They may still have a majority, but they're no longer big enough to have web developers ignore everything else, so they can't just do what they want with impunity any more. Windows is slowly losing out to Linux and Mac; they're already losing to Linux in a big way on servers, and the desktop is starting to fall away. They don't have to get down to 0% to have serious problems; they just have to lose their near-monopoly position, as they're doing in the browser space. Then, suddenly they don't call all the shots, as the application makers have to pay more attention to the minority platforms (after all, what kind of idiot would tell, say, 20-30% of his customers to go take a hike?).
Microsoft's dominance is waning, just like the USA's dominance is waning. We'll have to put up with them for a while still, but if they don't make some serious changes soon, they're not going to be very big and powerful in a decade or two, if they even still exist. Look at IBM, after all. It was o