EditorsAbout the SiteComes vs. MicrosoftUsing This Web SiteSite ArchivesCredibility IndexOOXMLOpenDocumentPatentsNovellNews DigestSite NewsRSS

12.23.07

Is Novell’s Pal Cooking the Books as Well? (Microsoft)

Posted in Bill Gates, Deception, Finance, Fraud, Microsoft, Novell, Vista, Windows at 6:50 pm by Dr. Roy Schestowitz

Microsoft’s taxation loopholes and system abuse; financial woes

A couple of weeks ago we pointed out that Novell is cooking the books, i.e. it moves money between buckets in order to embellish its results. It didn't work out too well.

There are rarely truths and more often we are blinded spin when it comes to big corporations. Microsoft is no exception. This post is intended to show that:

  1. Financially, Microsoft does not do as well as its media will have you believe
  2. Financial misconduct at Microsoft is quite routine

Several days ago, Microsoft declared its quarterly dividend.

Microsoft Corp. today announced that its board of directors declared a quarterly dividend of $0.11 per share. The dividend is payable March 13, 2008 to shareholders of record on February 21, 2008. The ex-dividend date will be February 19, 2008.

Tax Evasion and Deception

On the very same day, the Associated Press published an article about a Wisconsin bill that would address some tax loopholes.

Wisconsin Bill Would Require More Reporting on Tax Loopholes

[...]

A message left with Microsoft was not immediately returned.

We mentioned the Gates Foundation and gave some detailed information a couple of times in the past, or at least alluded to it. It is worth repeating and re-qoting the analysis of the Gates and Buffet Foundation “Shell Game”.

My background is finance and accounting. As a socially conscious venture capitalist and philanthropist, I have a very good understanding of wealth management and philanthropy. I started my career in 1967 with the IRS as a specialist in taxation covering many areas of the tax law including the so-called legal loopholes to charitable giving.

[...]

However, the Gates Buffet foundation grant is nothing more than a shell game in which control of assets for both Gates and Buffet remain the same.

[...]

The only difference is that the accumulation of wealth by these two will be much more massive because they will no longer have to pay any taxes.

This is seen as acceptable by some, but it’s rather obvious who loses the most . Itgoes well beyond the Foundation. Below we present two incident from the past few months alone:

1. Ecuador Tax Agency Closes Microsoft Branch Offices For 7 Days

“We have twice requested balances, payment reports and complete tax information, but the company hasn’t given it to us, so in accordance with our laws we have proceeded with the closure,” the SRI official in charge of the proceeding said.

2. Microsoft Office raid in Hungary

“Such behavior could lead to the exclusion of competitive products from the market and violate European Union rules, according to the authority known as the GVH.”

The example above is less to do with tax; it’s more about other types of practices. Other companies that came under fire for their financial practices recently inlcude Apple (Steve Jobs accused of turning a blind eye to predating) and Cisco in Brasil (massive case of tax evasion). Microsoft hasn’t escaped scrutiny though. Consider this article [expired]:

Microsoft’s past stock options practice poses questions

[...]

Microsoft in 1999 announced that it would end a policy of awarding options at monthly lows and said it would take a $217 million charge, though many details of that discontinued practice haven’t been widely known, The Wall Street Journal said Friday.

Those details raise questions about how Microsoft began the practice, what prompted the company to end it and whether the way the options were dated–at 30-day lows the month after they were granted–influenced other companies, it said.

Tough Life Where Cash Cows Are Absent

”Everywhere you look other than Windows and Office, business for Microsoft has been very tough.“Microsoft makes obscene amounts of money through sales of: (1) Windows (the consumer rarely has a choice); (2) support contracts; and (3) Office. The latter explains why the company has resorted to corruption in defending something which Microsoft says is a simple matter of its commercial interests, namely OOXML.

Everywhere you look other than Windows and Office, business for Microsoft has been very tough. Legal expenses — incurred due to retaliation for anticompetitive practices — have been huge (exceeding a billion dollars per year). Now, consider Windows Mobile.

Microsoft Hides Its Mobile and Business Apps Divisions

The company is folding its two worst-performing divisions — Microsoft Business Solutions (its business applications unit) and its Mobile and Embedded units — into the Microsoft Business Division and Microsoft Home and Entertainment units, respectively.

There are some more examples of this here:

The Secret Failures of Microsoft

There is no choice involved; even most Linux users are forced to pay for a Microsoft license in order to obtain a brand name PC.

[...]

They are bound to an oath to swear allegiance to Windows XP Professional and must never mention Linux and Windows in the same breath. If they step out of line in any way, Microsoft dramatically raises their OEM licensing fees and sends them to indoctrination camp, where they face chairs being hurled at them by angry monkeys.

[...]

Why do Windows enthusiasts exibit much hostility to an obvious fact? Because if they admit that 80% of the company’s revenues come entirely from an OEM tax, and not from any choice on the part of consumers…

[...]

Microsoft’s decade of investments in WinCE and Windows Mobile Smartphones have only barely matched the market share of Palm, which itself is a run down company out of ideas. Microsoft couldn’t out-maneuver the incompetent Palm within a decade of trying; now both are ineffectually fighting over the dying PDA industry while Linux and Symbian slaughter them in the smartphone arena…

Remember the XBox 360, which has already lost several billion of dollars rather than make money? Consider for example:

1. How Much is Too Much

Microsoft says it will stick with Xbox. But with years of heavy losses behind it, the pressure’s on for the gaming division to make good

2. Microsoft stoic despite massive losses

If you were to judge by the PR rhetoric, you’d think the 360 was an unstoppable commercial juggernaut. As usual though, PR lies.

3. Loot: Redmond, We Have a Problem, Or, What’s Wrong With the Xbox 360

At this point, Former becomes impassioned. That’s not fair, he says; we always saw this as a long-term venture. To which we reply that we were talking about the original Xbox, and while other divisions of the company throw off more profits in a single quarter than the entire $5 billion or so lost in the home and entertainment division to date, the fact remains that, as we take-our-word-for-it predicted, the Xbox group has been spectacularly unprofitable for Microsoft. Hence, our heretofore unpublished Vietnam analogy. The rest of the night is a blur, but we digress.

[...]

The worst case scenario for Microsoft, then, is one in which the Xbox 360′s bid for the mass market is blocked by the Wii for the next two to three years, at which point the aging and underpowered Wii gives way to a cheaper-than-it-is-now PS3 with a selection of AAA titles that’s far wider than what the PS3 has at the moment; new installments of Playstation’s own popular and casual-leaning games; and a slew of new franchises from Sony’s much-larger studio operation.

Of course, some of these colossal losses can be compensated for by sales of Windows and Office (among a few other profitable products).

Looking a year back, Microsoft’s relied on Windows Vista to save its day, but a major magazine has just named Vista the #1 tech disappointment of 2007. It’s hardly surprising and it’s also the cause for aggressive attacks against GNU/Linux and Free software. Here are some of these year-old articles, which also spoke about the company’s buybacks — a sign of great weakness:

1. Microsoft counts on Vista to recharge stagnant stock

There was a time in the 1990s when shares of Microsoft stock seemed to double every couple of years. 1996: college for the kids. 1998: a place on Whidbey. 1999: early retirement.

Times have changed.

2. A Dozen Stocks For ’07

Millen also thinks $36 billion in planned share buybacks will help the stock.

3. Commentary: Microsoft needs more than just buybacks to lift its shares

Microsoft shares, which have been dormant for the last few years, have been looking up over the last couple months. The Dow industrials component has gained about 20% since hitting a 4-year low of $21.46 on June 13.

To help move things along, Microsoft not only launched a $40 billion stock repurchase program that lasts through 2011, the company also said its previously announced 4-year, $30 billion stock buyback program was completed in just 2 years.

The following is an article from the Seattle P-I, which tends to be favourable to Microsoft. The article has been highly damaging. It claimed that Microsoft had lost over half of its cash pile in just 2 years. This happened quietly.

Software Notebook: Microsoft’s cash pile isn’t what it used to be

But Microsoft has taken a series of steps to reduce its cash balance. Specifically, by Microsoft’s count, the company has paid out nearly $100 billion through dividends and repurchasing its own stock in the past five years.

That’s just what the stock (MSFT) does not tell the complete story.

Adding Insult to Injury — Microsoft Vice President Resorts to Crime

Robert Bach really dropped the bomb when he resorted to inside-trading. He did this just before a technical and financial disaster was announced (the persistent denial had already lost consumer trust). Here are some articles about this:

1. Microsoft exec dumped stock prior to Red Ring announcement

To make matters more murky, the sales were not registered with the Securities and Exchange Commission within the mandatory two days of the transaction, a result of an alleged “administrative error.” Microsoft has since remedied the issue by following the “procedures required of late-filers.”

2. Microsoft’s Bach sold more stock before Xbox news

Microsoft Corp. executive Robbie Bach sold $3 million more in company stock during the period leading up to an announcement about a costly flaw in its Xbox video game console than previously reported, according to a filing Monday with the Securities and Exchange Commission.

3. Insider Trading Hasn’t Affect Microsoft Stock – Yet

MarketWatch.com reports that Robbie Bach, president of Microsoft’s Entertainment and Devices division, sold $6.2 million of Microsoft stock just prior to announcing that Microsoft was going to have to extend XBox 360 warranties to three years because of extensive failures. The filings note that this was not part of any scheduled diversification or selling program; this was a conscious, unscheduled sale by the guy in charge of releasing news that could affect the value of Microsoft stock.

[...]

Insider trading is a very serious violation of the law; just ask Martha Stewart, who served five months in prison for avoiding losses of $43,000 through trades that just had suspicious timing (no insider trading was actually proven). This is $6.3 million that went straight into Robbie Bach’s pocket.

Under normal circumstance, this guy would be investigated, maybe even jailed. Then again, don’t we already know that Microsoft is virtually above the law, lacking supervision of any kind?

Share this post: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Digg
  • del.icio.us
  • Reddit
  • co.mments
  • DZone
  • email
  • Google Bookmarks
  • LinkedIn
  • NewsVine
  • Print
  • Technorati
  • TwitThis
  • Facebook

If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

Pages that cross-reference this one

What Else is New


  1. With Unified Patent Court (UPC) on Its Death Throes, Team UPC Now Resorts to Promoting Pertinent Parts of the Agreement (UPCA)

    The latest writings about the Unitary Patent and agenda related to it, courtesy of the same people, firms and Web sites that spent several years lobbying for the UPC (i.e. for their own wallets)<



  2. Reporting Benoît Battistelli Before He Too 'Pulls a Željko Topić'

    The media is full of EPO-sponsored puff pieces about the EPO (very soon Joff Wild and Battistelli will promote software patents again), so we encourage readers to contact authorities in France and tell them what Battistelli has been doing in (or to) the European Patent Office (EPO)



  3. Links 26/4/2018: KStars 2.9.5, Ubuntu 18.04 LTS, NetBSD 8.0 RC1

    Links for the day



  4. Battistelli Misuses EPO Budget to Saturate the European Media With Puff Pieces About His Event

    The latest examples of 'synthetic' coverage or fluff about Battistelli's expensive event that he cryptically and mysteriously chose to have at his other workplace in Saint-Germain-en-Laye



  5. Battistelli's EPO Continues to Promote Software Patents and Even Pays the Media to Play Along, Impacting Other Continents

    With silly new terms such as "4IR" (the EPO used to say "ICT", "CII", "Industry 4.0" etc.) Team Battistelli is hoping to make software patents look/sound acceptable, honourable and inherently innovative or "revolutionary"



  6. Links 25/4/2018: Ubuntu 18.04 Coming Shortly, Fedora 28 Next Month

    Links for the day



  7. Koch Brothers and Big Oil Could Not Buy the Decisions in Oil States, SAS

    In Oil States Energy Services v Greene’s Energy Group, a case which Koch-funded think tanks meddled in (including those whose panel guests send me threatening legal letters), ends up with dissent from a Koch-connected Justice citing or quoting those very same Koch-funded think tanks



  8. The European Patent Office (EPO) Wastes a Lot of Money on External PR Agencies for Battistelli's 'Heist'

    The EPO's management is once again scattering/throwing EPO budget at PR agencies and media companies (publishers/broadcasters) to disseminate a bunch of puff pieces and virtually ignore the very obvious conflict of interest, which should be a scandal on par with that of FIFA (resulting in the arrest of its boss, Mr. Blatter)



  9. Today's EPO is Not Compatible With the Law and It's Grossly Incompatible With Truth and Justice

    Today, once again, the EPO openly advocates software patents while media promotes loopholes (notably hype waves)



  10. Quick Mention: As Expected, the US Supreme Court Cements PTAB's Role With Trump-Appointed Gorsuch Dissenting

    Oil States has been decided and it's very good news for the Patent Trial and Appeal Board (PTAB); even Conservatives-leaning Justices support PTAB



  11. Links 24/4/2018: Preview of Crostini, Introducing Heptio Gimbal, OPNsense 18.1.6

    Links for the day



  12. Patent Maximalists Step Things Up With Director Andrei Iancu and It's Time for Scientists to Fight Back

    Science and technology don't seem to matter as much as the whims of the patent (litigation) 'industry', at least judging by recent actions taken by Andrei Iancu (following a hearing before the Senate Judiciary Committee)



  13. Mythology About Patents in the East

    Misconceptions (or deliberate propaganda) about patent policy in the east poison the debate and derail a serious, facts-based discussion about it



  14. Patent Trolls Watch: Red River Innovations, Bradium Technologies/General Patent, and Wordlogic

    A quick look at some patent trolls that made the news this Monday; we are still seeing a powerful response to such trolls, whose momentum is slipping owing to the good work of the Patent Trial and Appeal Board (PTAB)



  15. Holding Benoît Battistelli Accountable After the EPO

    The many abuses and offenses committed by Mr. Battistelli whilst he enjoyed diplomatic immunity can and should be brought up as that immunity expires in two months; a good start would be contacting his colleagues, who might not be aware of the full spectrum of his abuses



  16. Links 23/4/2018: Second RC of Linux 4.17 and First RC of Mesa 18.1

    Links for the day



  17. The Good Work of the Patent Trial and Appeal Board (PTAB) and the Latest Attempts to Undermine It

    A week's roundup of news about PTAB, which is eliminating many bad (wrongly-granted) patents and is therefore becoming "enemy number one" to those who got accustomed to blackmailing real (productive) firms with their questionable patents



  18. District Courts' Patent Cases, Including the Eastern District of Texas (EDTX/TXED), in a Nutshell

    A roundup of patent cases in 'low courts' of the United States, where patents are being reasoned about or objected to while patent law firms make a lot of money



  19. The Federal Circuit's (CAFC) Decisions Are Being Twisted by Patent Propaganda Sites Which Merely Cherry-Pick Cases With Outcomes That Suit Them

    The Court of Appeals for the Federal Circuit (CAFC) continues to reject the vast majority of software patents, citing Section 101 in many such cases, but the likes of Managing IP, Patently-O, IAM and Watchtroll only selectively cover such cases (instead they’re ‘pulling a Berkheimer’ or some similar name-dropping)



  20. Patents Roundup: Metaswitch, GENBAND, Susman, Cisco, Konami, High 5 Games, HTC, and Nintendo

    A look at existing legal actions, the application of 35 U.S.C. § 101, and questionable patents that are being pursued on software (algorithms or "software infrastructure")



  21. In Maxon v Funai the High 'Patent Court' (CAFC) Reaffirms Disdain for Software Patents, Which Are Nowadays Harder to Get and Then Defend

    With the wealth of decisions from the Court of Appeals for the Federal Circuit (CAFC) wherein software patents get discarded (Funai being the latest example), the public needs to ask itself whether patent law firms are honest when they make claims about resurgence of software patents by 'pulling a Berkheimer' or coming up with terms like “Berkheimer Effect”



  22. Today's European Patent Office Works for Patent Extremists and for Team UPC Rather Than for Europe or for Innovation

    The International Association for the Protection of Intellectual Property (AIPPI) and other patent maximalists who have nothing to do with Europe, helped by a malicious and rather clueless politician called Benoît Battistelli, are turning the EPO into a patent-printing machine rather than an examination office as envisioned by the EPC (founders) and member states



  23. The EPO is Dying and Those Who Have Killed It Are Becoming Very Rich in the Process

    Following the footsteps of Ron Hovsepian at Novell, Battistelli at the EPO (along with Team Battistelli) may mean the end of the EPO as we know it (or the end altogether); one manager and a cabal of confidants make themselves obscenely rich by basically sacrificing the very organisation they were entrusted to serve



  24. Short: Just Keep Repeating the Lie (“Quality”) Until People Might Believe It

    Battistelli’s patent-printing bureau (EPO without quality control) keeps lying about the quality of patents by repeating the word “quality” a lot of times, including no less than twice in the summary alone



  25. Shelston IP Keeps Pressuring IP Australia to Allow Software Patents and Harm Software Development

    Shelston IP wants exactly the opposite of what's good for Australia; it just wants what's good for itself, yet it habitually pretends to speak for a productive industry (nothing could be further from the truth)



  26. Is Andy Ramer's Departure the End of Cantor Fitzgerald's Patent Trolls-Feeding Operations and Ambitions?

    The managing director of the 'IP' group at Cantor Fitzgerald is leaving, but it does not yet mean that patent trolls will be starved/deprived access to patents



  27. EPO Hoards Billions of Euros (Taken From the Public), Decreases Quality to Get More Money, Reduces Payments to Staff

    The EPO continues to collect money from everyone, distributes bogus/dubious patents that usher patent trolls into Europe (to cost European businesses billions in the long run), and staff of the EPO faces more cuts while EPO management swims in cash and perks



  28. Short: Calling Battistelli's Town (Where He Works) “Force for Innovation” to Justify the Funneling of EPO Funds to It

    How the EPO‘s management ‘explained’ (or sought to rationalise) to staff its opaque decision to send a multi-million, one-day ceremony to Battistelli’s own theatre only weeks before he leaves



  29. Short: EPO Bribes the Media and Then Brags About the Paid-for Outcome to Staff

    The EPO‘s systematic corruption of the media at the expense of EPO stakeholders — not to mention hiring of lawyers to bully media which exposes EPO corruption — in the EPO’s own words (amended by us)



  30. Short: EPO's “Working Party for Quality” is to Quality What the “Democratic People's Republic of Korea” is to Democracy

    To maintain the perception (illusion) that the EPO still cares about patent quality — and in order to disseminate this lie to EPO staff — a puff piece with the above heading/photograph was distributed to thousands of examiners in glossy paper form


CoPilotCo

RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

CoPilotCo

Recent Posts