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

04.25.10

Microsoft Cumulative Debt Almost Doubles to About $80 Billion in Just a Few Years (Updated)

Posted in Finance, Microsoft, Novell at 7:15 am by Dr. Roy Schestowitz

[Update: A reader points out that "the graph is of cumulative debt. Which equates with MSFT having around $6Bn debt from being debt free in Q2 2008."]

Bernard Madoff
Microsoft’s debt exceeds even Madoff’s

Summary: Microsoft’s debt — like Novell’s debt — is a scarcely-explored subject in the media, but we’ve finally found the latest figures

OUR WIKI now contains this page about Microsoft’s financial situation. It is not what many people imagine it to be and last year we pointed out that Microsoft has debt. Yes, it’s true. We just couldn’t quite tell at the time how big the debt was, but now we have a clue. Here is some background reading:

Business Insider shows data from a reliable source, indicating that Microsoft’s debt is going through the roof (increasing faster than Microsoft can keep up with). Read the numbers. While Google and Apple have no debt, Microsoft has a huge debt approaching a tenth of a trillion dollars. Microsoft relies on shareholders to put their money in this pit.

Tech companies, which generally throw off tons of cash, added a healthy sum of debt to their balance sheets last year, the Wall Street Journal notes.

We are increasingly welcoming a world where companies with a sort of overdraft claim to be “cash rich”. It’s the same world where a country with 14+ trillion dollars in debt pretends the problem will just go away and asks Microsoft to create computer games to mitigate perception issues [1, 2].

“While Google and Apple have no debt, Microsoft has a huge debt approaching a tenth of a trillion dollars.”Microsoft’s debt is not so unusual, but it is far greater than the rest. Novell’s own debt is an issue we explored last year.

Many of Microsoft’s business units make no money. They just lose a lot of money, but people continue to think about Windows and Office, which are the exception, not the norm. These are cash cows whose revenue is actually declining (Office revenue is still going down). We mentioned this some days ago when we cited Joseph Tartakoff, but as Tartakoff later points out (regarding the same article of his that he tweeted about 4 times): “Microsoft’s online losses up to a staggering $713 million, from $411 million a year ago” (this is not surprising at all).

That’s the loss in just one quarter and one business unit! It used to be over $2 billion in losses per year, now it’s around $3 billion in losses per year, assuming this new pace of losses carries on.

More information about Microsoft’s real financial performance is coming soon. We are going through reports and interpreting them. It doesn’t look too good.

Microsoft keeps taking on debt, whereas some of its biggest competitors remain debt free. Terry Porter writes: “It’s interesting that Google and Apple both deploy Unix and are debt free, so perhaps using Unix must be good for business?”

“Microsoft, the world’s most valuable company, declared a profit of $4.5 billion in 1998; when the cost of options awarded that year, plus the change in the value of outstanding options, is deducted, the firm made a loss of $18 billion, according to Smithers.”

The Economist, 1999

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

3 Comments

  1. uberVU - social comments said,

    April 25, 2010 at 7:33 am

    Social comments and analytics for this post…

    This post was mentioned on Identica by schestowitz: #Microsoft Debt Almost Doubles to About $80 Billion in Just a Few Years http://ur1.ca/wzal #fraud #deficit #sec…

  2. Tom Womack said,

    April 25, 2010 at 7:47 am

    Gravatar

    I think you’re misreading the graph at Business Week; Microsoft’s chunk is the red bit between about 71 and about 75 billion, they have $3.75 billion of bonds outstanding, as part of $22 billion in debt (http://www.microsoft.com/msft/reports/ar09/10k_fr_not_03.html)

    Which isn’t unreasonable since they have $36 billion in investments, including $13 billion in Treasury bonds.

    your_friend Reply:

    Turning a $60 billion cash pile into questionable “investments” said to be worth $36 billion while taking on a real $22 billion in debt is reasonable? To who? The deeper into debt Microsoft falls, the harder it will be for them to conceal their failure.

    Non free softare has never been a sustainable business model. This is why Microsoft has invaded media and the web. It’s not working out for them for the same reasons their software business is not. Everything Microsoft buys, it wrecks trying to feed Windows. Customers don’t like it and Windows itself is a basket case. The apparent success of Windows and Microsoft in the 90s is really the story of many other non free software company failures.

What Else is New


  1. Microsoft's and Bill Gates' Biggest Patent Troll (Intellectual Ventures) Suffers Setback and Nokia is Dead While Patents Scattered to Microsoft Patent Proxies

    Microsoft's patent collectors (trolls) are to have a feast with Nokia patents while Intellectual Ventures, Microsoft's largest patent proxy, continues to attack companies including Motorola



  2. Patent Racketeering Continues With Nadella: Motorola the Latest to Join the FUD Campaign

    Nadella continues Ballmer's campaign of intimidation and alienation, showing that nothing has changed at Microsoft, not even the FUD



  3. Links 23/4/2014: GNOME Maps Application, LG in Headlines

    Links for the day



  4. Links 22/4/2014: More GNU/Linux Gains, Syria Updates

    Links for the day



  5. Links 21/4/2014: New Games for GNU/Linux, Some NatSec Politics

    Links for the day



  6. Site Focus for The Remainder of the Year

    What we plan for the rest of 2014 and why



  7. Links 20/4/2014: EFF FOSS, Easter Drone Strikes, Copyright Industry Fear of Google

    Links for the day



  8. Links 19/4/2014: Slow Easter News Day

    Links for the day



  9. Links 18/4/2014: New KDE, Kubuntu, and More

    Links for the day



  10. Some Perspective on Heartbleed®

    Our views on the whole Heartbleed® bonanza, which seems like partly a PR stunt (for multiple stakeholders)



  11. Microsoft is Leaving Windows -- Including Vista 8.1 -- Vulnerable to Non-Government Crackers, Not Only to NSA

    Microsoft makes it ever more evident that securing users of Windows is not at all a priority, and perhaps not even a desire



  12. Links 17/4/2014: Android RDP, New Ubuntu, RHEL 7 Milestone

    Links for the day



  13. Racing to 1984: Mass Surveillance, Cracking, 'Targeted' Assassinations, and Illegal Torture

    Links for the day



  14. More Microsoft Subsidies to Patent Troll Intellectual Ventures

    Microsoft hands money to Bill Gates' close friend who is the world's largest patent troll



  15. Aiding Microsoft Under the Disguise of 'Pro-FOSS'

    Not everything which is FOSS necessary becomes, by virtue of existence, a positive contribution, as we are constantly reminded by projects that help proprietary software and/or restrictions get a strong grip on FOSS



  16. Links 16/4/2014: Red Hat PR, Ubuntu LTS Imminent

    Links for the day



  17. Links 15/4/2014: Lots of PCLinuxOS Releases, Ukraine Updates

    Links for the day



  18. Apple and Microsoft Actively Lobbying Against Patent Reform in the US

    Apple and Microsoft are reportedly intervening/interfering with US law in order to ensure that the law is Free/libre software-hostile



  19. Lawsuit by Microsoft Shareholder Targets Fine for Crimes Rather Than the Crimes Themselves

    A new lawsuit by a Microsoft shareholder shows everything that's wrong with today's model of accountability, where those who are responsible for crimes are accused of not avoiding fines rather than committing the crimes



  20. Public Institutions Must Dump PRISM-Associated Software

    Another reminder that taxpayers-subsidised services should refuse, as a matter of principle, to pay anything for -- let alone deploy -- proprietary software with back doors



  21. GNU/Linux News: The Opportunities Amid XP EOL

    Links for the day



  22. Microsoft Gets Its Money's Worth From Xamarin: PlayStation 4 Now Polluted by Microsoft

    The Trojan horse of Microsoft, Xamarin, is pushing .NET into Microsoft's console competitor



  23. After Brendan Eich Comes Chris Beard

    Having removed Brendan Eich using bullying and blackmail tactics, his foes inside Mozilla achieved too little as we have yet another man (coming from inside Mozilla) acting as CEO



  24. Healthcare News: Free Software in Health, Humanitarian Causes

    Links for the day



  25. Links 14/4/2014: MakuluLinux, Many Games, More Privacy News and Pulitzer Prize for NSA Revelations

    Links for the day



  26. TechBytes Episode 87: Catching up With Surveillance (NSA, GCHQ et al.)

    The first audio episode in a very long time covers some of the latest happenings when it comes to privacy and, contrariwise, mass surveillance



  27. Server News: KVM, ElasticHosts, Other GNU/Linux Items, and Open Network Linux

    Links for the day



  28. Hardware News: Freedom, Modding, Hackability on the Rise

    Links for the day



  29. Distributions News: GNU/Linux Distros

    Links for the day



  30. GNOME News: Financial Issues, Mutter-Wayland, West Coast Summit, Community Participation

    Links for the day


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