Microsoft Posts First Quarterly Loss Ever 327
HangingChad writes "Microsoft's announcement of a late October release date for Windows 8 was eclipsed by its earnings report, in which the computer giant posted its first-ever quarterly loss since going public in 1986. The loss stems from Microsoft's continued struggles with the online services division."
Another Shitty Summary. (Score:5, Insightful)
The loss stems from a giant write down of a purchase gone bust ($6.2billion) from 2007. Otherwise it would have been a great quarter for "M$".
But don't let that stop the speculation about how "M$" is about to die.
Re:Yay! (Score:5, Insightful)
Microsoft made a bad acquisition and they lost money. They have a long way to go before their situation gets dire.
I guess when you're big enough you can do a six billion dollar oops and nothing much happens.
Loss due to 8 billion write down. (Score:5, Insightful)
Ballmer (Score:4, Insightful)
Positive cash flows (Score:5, Insightful)
They wrote down a turd whose asset value wasn't worth what they paid. Look at the cash flows. They continue to generate billions of cash.
SEC filing [sec.gov]
Blood in the Water (Score:5, Insightful)
In and of itself this isn't a big deal. They wrote off some bad investments, so what? The problem is that everyone watches MS looking for any sign of weakness. It's more the perception that they don't have it anymore than any reality. I believe this is the beginning of the end, not of MS but of their overwhelming dominance that they've enjoyed for so long.
Re:Yay! (Score:4, Insightful)
This is nothing more than creative accounting meant to give them a mean tax write-off at FY-End. They didn't really make money. Nothing they bought that showed a loss could possibly eliminate billions a quarter in revenue and profit.
Comment removed (Score:5, Insightful)
Re:Positive cash flows (Score:3, Insightful)
Yeah. Leave it to the typical MS hate by people here on /. to go apeshit over stuff like this. The story should be modded +1 flamebait.
Re:Yay! (Score:0, Insightful)
Microsoft made a bad acquisition and they lost money
Yeah, they 'acquired' Steve Ballmer.
Re:"the loss stems from..." (Score:5, Insightful)
No, its not.
A $6.2 billion write-off against a $6.3 billion dollar purchase of an online advertising firm in 2007 that was intended to be a main engine of profit for their online services division. When you purchase a business for $6.3 billion to reinforce a particular part of your company, and five years later recognize that its only worth $100 million (or less than 1/60th of what you paid for it), its pretty fair to describe as that part of the company as struggling.
Microsoft themselves, in the write-down, is recognizing that $6.2 billion that they spent on their online services division might as well have been piled up as cash and made into the world's largest currency bonfire.
Bleeding in worthless acquisitions is still bleeding. Some might attempt to distinguish losses from acquisition write-downs from losses from other operations, but with Microsoft -- and many other large firms -- acquisitions are a key and regular part of their operations. If their acquisition strategy is bad and bleeding money, they are bleeding money just as much as if they were losing it from other operations.
Re:"the loss stems from..." (Score:5, Insightful)
I agree that it mis-attributed the cause, but they lost 2 billion last year without the write-down, which is plural billion, which is billions. They are bleeding billions.
Re:"the loss stems from..." (Score:4, Insightful)
I think the point is that it's meaningless to look at the loss and say that it's indicative of this quarter being particularly worse than the preceding ones - i.e. that it's a start of a downward trend (which TFS is implying). More accurate representation of this $6B loss would be to spread it evenly over the period since acquisition.
Re:Yay! (Score:5, Insightful)
I kind of stopped wanting Microsoft to die. We need something new that DOESN'T suck (not just one, make that 2-3). Death of MS would accomplish nothing but more consolidation for the other poopyheads.
Break Them Up (Score:5, Insightful)
They would actually be more valuable broken up. Windows could still do their thing. Office could support whatever platform they wanted to. Imagine a version of Office for Mac with a comparable version of Excel and Access. SQL Server on Linux boxes.
Also, I would say there is a difference between decline and not being in your high growth phase and abnormally dominant phase.
Re:Mod Up: Informative (Score:4, Insightful)
It's not from their "continued struggles", it's from a single acquisition 5 years ago. And it says nothing about their online services division as a whole, just the advertising segment represented by aQuantive. It'd be like saying "Google's online services take 600 million dollar hit" if Google decided to scrap Google Flights.
Re:Take a look at the details (Score:3, Insightful)
No, the Street amortized the slamming over the last 12 years. Price on December 31, 1999: $58 3/8s.
I'm sorry, it's a feature, not a loss (Score:0, Insightful)
Dear Microsoft,
My name is Chupanibre and I will be helping you resolve your issue today.
If I understand your enquiry, you wished to make a profit last quarter.
Unfortunately, in order for us to assist you you must have had a premium account at some point in your past. This would require you to show that:
a) You had delivered a single piece of software considered 'worth the money'
b) You had made a single innovation in the field of technology in the last 30 years.
c) You had given a crap about a single one of your customers, ever.
Once you have fulfilled at least one of these requirements, please don't hesitate to contact us again and we will be able to assist you buy giving you hard-earned money for your technically inferior products.
So Ballmer can't even buy cashcows (Score:5, Insightful)
It seems to me the cash cows they can milk by raising the prices, but Ballmer can't create NEW cash-cows internally in MS, not only that, this tells me he can't even BUY new cash cows from outside.
You can make light of this, but this is spent money, and yet it took him 5 years to realize he'd wasted it???? The man is an idiot, a shouty salesman whose biggest sales job is to keep himself in power.
He's losing the Windows market, this is what gets me the most, you can see it all unfolding in slow motion as people switch away from Windows and he's making it worse by splitting Windows into two competing versions! It reminds me of IBM making PCs and also selling cloned PCs in competition with itself. It made IBM clearly inferior because even they didn't believe their PCs were worth it.
Now we have MS, launching 2 tablets, one that is more compatible than the other, but not fully compatible, and one that has a better battery life but not as good as the competition. Two half products in a market that's getting away from them.
And nobody dares sack shouty salesman for fear of chairs flying???
Re:Mod Up: Informative (Score:5, Insightful)
Sorry, apology? Looks through my posting history - I'm exactly the opposite of a Microsoft apologist. When I see a headline saying Microsoft's taken a quarterly loss for the first time, and it's due to struggling online services, I'm expecting it to be the thin end of the wedge - that MS' new strategies are failing, and that it's OS and Office divisions are no longer drawing enough money to keep the behemoth lumbering.
That's not what's happening. Rather, they've taken the losses of the last 5 years, and conglomerated them into a single, large, writedown that is only really meaningful for tax purposes. In short, it's an accounting glitch, and it's being spun as the opening turn of the company's death spiral. I'm annoyed, not because I want MS to be shown as profitable, but because it's a) spin, and deceptive, and b) disappointing. I was hoping for a real decline, not some accountancy artifact.
Interesting timing, too (Score:4, Insightful)
Most of you don't know this, but Microsoft gives out bonuses and stock grants in September. This is a good excuse to stiff the employees a bit, and by god they're gonna use it. Being employed by a Microsoft's competitor, I can't help but like this course of events, since we get an influx of resumes from there every October or so, and while most of the people who apply should really be flipping burgers instead, every now and then we do hire a brilliant engineer.
Re:More like 72% lost share (Score:5, Insightful)
Windows might be losing market share to OSX. God only knows whether it's gaining or losing market share compared to desktop Linux this week/month/year, and it doesn't particularly matter because any change is below the margin of error anyway. Windows is not, however, losing market share to Android Phones or iPhones.
In America, at least, 99.9% of the people who own an Android phone or iPhone own at least one desktop PC, laptop, or both IN ADDITION to their phone.
Microsoft lost most of their mobile market share almost OVERNIGHT when they stupidly announced that the HTC HD2 would never run Windows Phone because "it had too many buttons", and just about everyone who owned a phone running Windows Mobile ran straight to Android without passing "Go". THAT is Microsoft's lost market share. Nearly every Android phone and iPhone sold since that time represents a PDA phone sold to somebody who formerly owned a phone that was a half step better than a Jitterbug. People who own an Android phone or iPhone today and do NOT own a PC or laptop probably didn't own a PC or desktop 4 years ago, either. People who owned a desktop PC and a laptop 4 years ago mostly still own a desktop PC, a laptop, and have recently added a tablet (Android or iPad) to the pile, and probably have a best of breed Android phone or iPhone filling the role of "pocket laptop with wireless internet access", just like they did 4 years ago.
If you REALLY want to see lost market share, do your census a month after Windows 8 comes out, and count anybody who yawned and stayed with Windows 7 (or reverted to Windows 7 after being unimpressed by Windows 8) because Windows 8 is ugly, looks like Unity on a bad day, and took away Aero Glass because Microsoft apparently wanted to make extra sure the reaction of everybody with a high end PC would be "yuck, Windows 8 is fugly".
If it's not obvious, I do think that Microsoft has gone batshit crazy and suicidal in its old age. If you look at just about every business and strategic decision they've made since ~2008, they've dropped the ball and bent over backwards to snatch defeat from the jaws of victory at every possible opportunity. They've become irrelevant to everyone who used to own a Windows Mobile phone, they've completely pissed off two entire generations of Windows Phone buyers by screwing them out of upgrades and saddling them with a phone that was obsolete roughly 3 months after it came out, they locked them down for reasons nobody can figure out (since they don't actually have any real software that anybody will pay for to generate royalties for Microsoft), they've completely dropped the ball on trying to run an ad network like Google, and now it looks like they've spent the past 3 years brainstorming ways to give people who own Windows 7 a reason to stick with it for the next 10 years.
And it makes me sad. As fashionable as it is around here to bash Microsoft, they've generally been a force for good. If nothing else, they gave us mice with scroll wheels. But lately... (shakes head)... well, the only word I can really think of to describe it is "Schadenfreude". It's almost heresy to say, but they really DO need Bill Gates to come back and save Microsoft from the zombie it's become. Microsoft's current management is like Apple under Scully.
Re:More like 72% lost share (Score:5, Insightful)
If it's not obvious, I do think that Microsoft has gone batshit crazy and suicidal in its old age. If you look at just about every business and strategic decision they've made since ~2008, they've dropped the ball and bent over backwards to snatch defeat from the jaws of victory at every possible opportunity
As much as I dislike Microsoft, you're being a bit unfair - they are competing with companies like Google and Apple - who execute *very* well. If your competitors are bringing their A game and you've been bringing your B game for the past decade but were the only game in town back then, of course you will look bad.
Keep in mind that,while bringing their B game, MSFT has been making money hand over fist for that past decade and their top-line is amazing. It's just, they are no longer the biggest/brightest/boldest company around.
Re:More like 72% lost share (Score:4, Insightful)
Bill Gates didn't make Microsoft, IBM did. Like Steve Jobs said: "Microsoft went into orbit because it had a booster rocket attached to it called IBM". Well, IBM left the consumer market a long time ago, they certainly can't save MS now.
Re:Yay! (Score:4, Insightful)
I kind of stopped wanting Microsoft to die. We need something new that DOESN'T suck (not just one, make that 2-3). Death of MS would accomplish nothing but more consolidation for the other poopyheads.
Apple is enemy number 1 right now. Not Microsoft. For the older folks on here they remember IBM as the bad guy and MS as the good guys and so on. I really do hope Windows Phone 8 succeeds yes I know slashdotters may not agree with me, but it is good for competition. Google could decide it is not worth it to be sued and sign an agreement with Apple to leave the market and have them only use Google services or something scary. You never know. Infact, if the lawsuits get worse I would do just that if I were Schidmt at Google. Andriod is a loss leader anyway they make money with searches.
Anyway not to go offtopic competition is good and slashdotters should consider their stance on Microsoft. They are not the scary guys who made crapware 10 years ago anymore. Windows 7 !=WindowsME/Dos4, Windows Phone != WinCE, and IE 10 != IE 6.
Apple is pretty cool still for many so my post is controversial but Apple scares me much more than MS and they are far more powerful now. Just my 2 cents even if they do make a Unix like consumer oriented OS.
Facetime (Score:5, Insightful)
I think you're kidding yourself. People who use Facetime are not using Skype, people who surf on an iPad are not surfing on a PC, people who play games on the tablets are not playing games on Windows. For me my PC was mainly stock trading and email/messaging, that's now mainly on an Android tablet.
You can claim that somehow Windows market is special, for 'real-work', but I use a Galaxy Note for most of my 'real work' and the PC is used only for its large screen when I happen to be in my office. When I've switched to an Infinity Pad, it won't even be the largest screen computer I have, at that point the charts will shown on the Android tablet and the PC will remain off.
Oh, and I plan on buying a MTH (?) cable for the note so I can plug it into my TV and watch streaming TV in HD. I never bought a Windows Media PC, and now never will.
Ballmer thinks he can grow Windows to take over the tablets, and Apple/Google believe they can grow tablets to take over Windows, two of those companies grew market share enormously quickly and one lost market share.
You said this:
"In America, at least, 99.9% of the people who own an Android phone or iPhone own at least one desktop PC, laptop, or both IN ADDITION to their phone."
You can pretend the iPad is a complement to the PC, but they are both just general purpose computing devices that overlap. I bet they bought the iPad despite owning a PC. Not the PC despite owning an iPad.
Re:and it's going to get worse due to market force (Score:4, Insightful)
I remember the same arguments being made in the early 1990s by the people who were really using workstations about those x86 "workstations"
I remember the same arguments being made about a decade ago about laptops
I remember the same arguments being made about mainframes and minis to client server.
Phones and tablets are about a decade behind laptops in terms of computational power. I most certainly did use /. in previous years on laptops which have less CPU, Ram and storage than my current iPhone. And I can see lots of way to resolve the keyboard problem, just look at how much voice is genuinely being used already.
Re:28% Windows market share (Score:5, Insightful)
Wait, you forgot to include my fridge and central heating system, neither of these run Windows either. Christ, even throwing servers into the mix where operating systems like Linux hold a greater share would make more sense than mobile.
Honestly, I'd like to see more competition in the desktop OS market too, but pretending desktop licensing and mobile operatings systems are in the same market is fucking stupid.
Mixing some arbitrary devices into the OS mix doesn't change the fact that Microsoft is still far and away the most dominant entity in the desktop/laptop market.
It doesn't really matter how many iOS devices Apple sells or Android devices Google and friends sell, people still aren't going to be writing software, producing spreadsheets, creating presentations, creating web pages, using most business systems, and authoring documents, on their tablets and phones. Have you tried doing any lengthy amount of office work on a mobile device? Without turning it into a desktop/laptop by attaching a keyboard/mouse it's the quickest route to insanity. Tablet versions of much common desktop software such as Office pale in comparison to the real thing. For this reason the key point is that no matter how many extra smartphones/tablets are sold out there, the effect on Windows desktop license sales is going to be negligible. People may be buying tablets, but few are foregoing a PC/laptop as a result, they just get both. Christ, up until recently you couldn't even activate an iOS device and get content onto it without a computer anyway.
Yes mobile is becoming ever more important, no it's not going to replace the desktop, it just extends where you can do some of your desktop work (e-mail, web apps). Touch is great, but it's not the be all and end all, it's an extremely shit input method for many, many common tasks still.
This is why you can't lump mobile and desktop together, for the most part they're different markets, the areas in which they intersect are fairly small and limited to for example, situations like tablets acting as a good carry round the home web browser instead of a netbook.
Re:More like 72% lost share (Score:4, Insightful)
Just one problem with that: In the past the one big pro for Windows was that it ran your apps from way back.
The Metro tablets don't.
Now, given that you're going to have to buy all new apps anyway, you've got a choice, whereas previously you didn't:
1) iOS: a whole lot of apps, and easy. Millions also have it.
2) Android: a few less apps, a little more geeky. Millions also have it.
3) Metro: starting out from near zero apps and zero market.
Re:28% Windows market share (Score:2, Insightful)
Not everybody does "office work" or needs a full-on laptop or desktop capabilities.
A phone (who are we kidding, they are ultra-portable computers) or tablet device can easily fit the needs for surfing the net, consuming media and communicating via voice, video, messaging or social media.
I am confident that Microsoft did not see themselves being usurped by phones and tablets on the scale you will see in the next 5 years. For the average non-techy who does not need any serious horsepower for creating documents, spreadsheets, music, video or images the phones and tablets replace entry level computer devices.
Re:28% Windows market share (Score:4, Insightful)
I'd like to see more competition in the desktop OS market too, but pretending desktop licensing and mobile operatings systems are in the same market is fucking stupid.
I'm sorry, but did you think that "desktop computing" and "mobile computing" were markets? The market is simply "computing".
It doesn't really matter how many iOS devices Apple sells or Android devices Google and friends sell, people still aren't going to be writing software, producing spreadsheets, creating presentations, creating web pages, using most business systems, and authoring documents, on their tablets and phones.
Outside of an office, almost no one wants to do those things. (Note: you, I, and the rest of Slashdot don't statistically count. We're a tiny minority.) People want to share pictures, browse the web, listen to music, watch movies, and do lots of other things that phones and tablets are perfectly good at.
People may be buying tablets, but few are foregoing a PC/laptop as a result, they just get both.
Have you talked to anyone outside an office? I personally know plenty of people who bought an iPad and abandoned their desktops and laptops. When it comes time to upgrade their less-portable systems, the thought process becomes "you know what, I don't really use it anymore. I guess I'd like to run ${application foo}, but not so much that I want to buy a whole new computer just for it, and have to set aside desk space for it, and it just sits there the rest of the time..."
This is why you can't lump mobile and desktop together, for the most part they're different markets, the areas in which they intersect are fairly small and limited to for example, situations like tablets acting as a good carry round the home web browser instead of a netbook.
"This is why you can't lump digital and film cameras together, for the most part they're different markets, the areas in which they intersect are fairly small and limited to for example, situations like digital cameras acting as a good carry round the city camera instead of the nice film camera that they'll keep around for Important Stuff."
How'd that work out?