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04.22.10

Microsoft Losses Online Increase, Business Software Group Down

Posted in Apple, Finance, Free/Libre Software, Microsoft, Office Suites at 8:32 pm by Dr. Roy Schestowitz

Surprised and confused

Summary: The truth about Microsoft’s financial results, not the PR which the mainstream media is bombarded with

Microsoft’s results are in. As usual, spin is being emitted through Microsoft PR agencies and others who are faithful to Microsoft’s interests (Joseph Tartakoff for example). The reality check shows that losses online have increased (over $2 billion in losses per year and getting worse, not better), despite the typical spin which is being used while everyone’s results ascend following a terrible, post-collapse year.

Associated Press (AP) says that “Revenue in the business software group, which makes Office and other programs, fell 6 percent to $4.2 billion. Microsoft is waiting to report $305 million in Office revenue until after the upcoming Office 2010 launches in the current quarter.”

“Revenue in the business software group, which makes Office and other programs, fell 6 percent to $4.2 billion.”
      –Associated Press
Chips B. Malroy reads that as: “fudging the books again” (they did the same thing with Vista 7 in order to lie in the previous quarter).

Let us be reminded of the fact that in the previous quarter almost everything at Microsoft was down, but Microsoft was spinning it [1, 2, 3, 4]. Microsoft is again comparing a year of Vista to a year of Vista 7 (not comparable really). Signs indicate that there may be more financial malpractice at Microsoft and the SEC is already investigating/probing Microsoft (not for the first time, either [1, 2]).

As Chips B. Malroy puts it, AP “basically says that businesses are buying computers to replace the old ones, and this is the biggest increase for Microsoft.”

We urge people to be extremely careful of ardent Microsoft proponents. They are playing along with Microsoft PR, believing everything they are told without looking beyond the spin (e.g. layoffs, offshoring in several departments, underpaid child labour, potential book-cooking, and even loans).

Some people may say something about “beating expectations”, but this is the oldest trick in the book. They revised estimates so that they can be beaten; Microsoft does this almost every quarter.

The company’s portfolio is “under attack” from several fronts and Apple too is exceeding Microsoft in market value. Microsoft employees have no reason to be optimistic. Perhaps the most prominent cause for Microsoft’s declining margins is the incline in use of Free/libre software, as before.

“Client software felt the slump in PC sales, and was further harmed by the shift to netbooks; many of these run Linux, which helps Microsoft not at all.”

Ars Technica, 2009

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4 Comments

  1. uberVU - social comments said,

    April 22, 2010 at 8:53 pm

    Social comments and analytics for this post…

    This post was mentioned on Identica by schestowitz: #Microsoft Losses Online Increase, Business Software Group Down http://ur1.ca/wk4g The truth about Microsoft’s financial results…

  2. slave5tom said,

    April 23, 2010 at 11:53 am

    Gravatar

    Microsoft is failing trying to attack GNU/Linux and free Software, and knowledgable people can see through this facade. Where they also fail is in the business sector, where Adam Hartung, from Forbes magazine writes about, “Microsoft’s Dismal Failure”. http://www.forbes.com/2010/04/12/microsoft-white-space-leadership-managing-failure.html. It’s a story about how Microsoft is clinging to its traditional markets, failing to innovate into ‘white space’ (emerging growth) markets. Thought your readers would find this insightful perspective interesting.

  3. your_friend said,

    April 23, 2010 at 8:54 pm

    Gravatar

    Businessweek is usually a clueless Microsoft booster and the article you link to is not an exception. Specifically, Microsoft has never been an innovator, IE and MSN were anything but early to the market. Most importantly, the author completely misses the keys to Google and Apple success, a thriving free software world, and focuses on corporate research instead. There are many other misconceptions in the article but these are chief. Microsoft’s market failings are too obvious to hide but the author’s wild dreams of persuing left field projects are more of the same faulty reasoning that gave Microsoft failures like XBox, Zune, Surface, Windows Mobile, and so on and so forth. To understand the success of companies like Google and Apple, the author should probably spend some time coding at Google and look into the history of OSX via Next and Darwin.

  4. Dr. Roy Schestowitz said,

    April 23, 2010 at 9:02 pm

    Gravatar

    When I read that article it just seemed too promotional in Apple’s favour. Articles that simplify the market by narrowing down to some major brands are usually rather shallow, IMHO. Trade journals do that a lot.

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