Yahoo Deal Is Big, but Is It the Next Big Thing? 159
mattsgotredhair brings us a NYTimes article discussing how Microsoft's bid for Yahoo contrasts against one of the core philosophies of Silicon Valley: looking forward. From the Times:
"Microsoft may see Yahoo as its last best chance to catch up. But for all its size and ambition, the bid has not been greeted with enthusiasm. That may be because Silicon Valley favors bottom-up innovation instead of growth by acquisition. The region's investment money and brain power are tuned to start-ups that can anticipate the next big thing rather than chase the last one. 'This is the very nature of the Valley,' said Jim Breyer of the venture capital firm Accel Partners. 'After very strong growth, businesses by definition start to slow as competition increases and young creative start-ups begin to attack the incumbents.'"
More criticism... (Score:5, Informative)
http://www.bloomberg.com/apps/news?pid=email_en&sid=am1odVZXMwjk [bloomberg.com]
Re:What makes a search engine worth so much ? (Score:4, Informative)
Re:Other reasons for not being warm to the recepti (Score:3, Informative)
They currently have ~$1 billion a month in cash coming in, so even if it is a complete failure, they will have paid for it in a year or three.
Re:I really do not get it... (Score:5, Informative)
The move was simply them "buying" marketshare in an attempt to trump Google.
Ummm, you are aware that Microsoft has not actually bought Yahoo, right? MS has made Yahoo an offer. Yahoo has not yet responded to that offer.
Re:Other reasons for not being warm to the recepti (Score:2, Informative)
Only way for your math to work would be for them to cancel all R&D, tech support, and shut down every server, laying off everyone.
Re:Other reasons for not being warm to the recepti (Score:2, Informative)
http://www.microsoft.com/msft/earnings/FY08/earn_rel_q2_08.mspx#income [microsoft.com]
http://www.microsoft.com/msft/reports/ar06/staticversion/10k_fh_fin.html [microsoft.com]
I see ~$4 billion for the quarter ~$12.5 billion for the year(2006, they have not reported 2007 yet).
Note that those numbers are after taxes and such, so they are the 'net' numbers, the operating income is somewhat higher.
Maybe you were talking about Yahoo!'s earnings?
Re:What about Google? (Score:2, Informative)
This actually smacks of eliminating competition...
for some definition of "work" (Score:4, Informative)
Is Microsoft making money off Hotmail? Is Hotmail inducing anybody to buy Windows or Office? If not, it was a waste of money. And I don't think it is: Microsoft lost $77m on MSN in 2006.
Saying that the most wealthy, successful software company in the world is doomed to failure for going against silicon valley reasoning is futile when that's what they've always done and made more than anyone else while doing.
Microsoft is making money with their near monopoly: Office and Windows. Anything else is negligible or a money loser.
http://seattlepi.nwsource.com/dayart/20041022/MicrosoftResults.gif [nwsource.com]
http://www.newrowley.com/images/blog/2006/msft_profits606.jpg [newrowley.com]
It's a joke really. Nothing the company is doing is working. Even Xbox only has high revenue because it's subsidized so heavily and the company is bleeding money on it.
Re:Other reasons for not being warm to the recepti (Score:3, Informative)
Anyway, here is a page listing all the dividends Microsoft has paid to shareholders:
http://finance.yahoo.com/q/hp?s=MSFT&a=02&b=13&c=1986&d=01&e=3&f=2008&g=v [yahoo.com]
There are about 9 billion shares outstanding, and there has been the entire time they have been paying dividends, so we can calculate that they have given ~$40 billion dollars to shareholders since 2003.
Earlier, you complained that their cash on hand went from $50 billion to $17 billion, a decrease of $33 billion dollars, and used that to claim that they were not showing a profit. I am pointing out that they have taken more than that $33 billion off of their balance sheet in a way that is good for shareholders(this is what a dividend does, it transfers assets from the company to the shareholders), so you can't use that number to show that they are doing some sort of tricky accounting.
If you total up their net income over that same period(2003-2006):
http://www.microsoft.com/msft/reports/ar06/staticversion/10k_fh_fin.html [microsoft.com]
You end up with another $40 billion dollars. So out of $90 billion(your 50 on hand and my 40 in income), it is easy to account for the $40 billion in dividends paid, and the $34 billion that they had in cash and short term assets at the end of fiscal 2006, a total of $74 billion.
That leaves at least $16 billion to figure out what happened to(more if you want to factor in income before 2003), but that's a good deal less than the $40 billion that shareholders got paid(If shareholders had got paid $24 billion, there wouldn't be anything to figure out), so it doesn't demonstrate a loss(just some potential imprudence). It wouldn't be all that shocking for a $200+ billion dollar company to invest $16 billion back in itself over 4 years(or so, maybe more, over a longer period), so I wouldn't sweat it.
What it amounts to is that Microsoft is among the most profitable companies in the world. Their growth is amazing; they add as much new business each quarter as Google is adding in a year, but they are already so big, no one notices.