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Financials Indicate Microsoft Prepping for War 349

Posted by Zonk from the man-the-trenches dept.
SpaceAdmiral writes "Microsoft has surprised analysts by forecasting significantly higher expenses in the next fiscal year, an indication that the company might be getting ready to do battle with its online rivals. According to analyst Eugene Munster of Piper Jaffray, 'It looks like Microsoft is going to war with Google.'" From the article: "According to Mark Stahlman of Caris & Company, the fact that Microsoft plans to spend significantly more in 2007 was an indication of renewed aggressiveness in its competitive strategy and an indication that the company was returning to the kind of actions it exhibited before the Justice Department's antitrust lawsuit in the mid- and late 1990's. 'It's pretty clear that Bill is running the company again,' Mr. Stahlman said, referring to Bill Gates, 'and they are going to remake the business. They are being much more combative and much more strategically managed.'"
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Financials Indicate Microsoft Prepping for War More

Financials Indicate Microsoft Prepping for War

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  • Spot the dinosaur (Score:5, Informative)

    by Anonymous Coward on Friday April 28, 2006 @03:30PM (#15223071)
    Business / Microsoft [economist.com]

    Spot the dinosaur
    Mar 30th 2006 | REDMOND
    From The Economist print edition

    Microsoft’s core business is under threat from online software

    IMAGE [economist.com]

    RECENT advertisements for Microsoft show office workers as dinosaurs, stuck in a bygone era. Aptly, it is an accusation that some are now making about the software company itself.

    Microsoft earns more than half its $40 billion or so of annual revenue—and the vast majority of its profits—on just two products: the Windows operating-system and Office, a collection of personal-computer (PC) applications including word-processing and spreadsheet programs. Both, however, are coming under threat from new technologies.

    The pressure Microsoft is facing in its core businesses is similar to one confronted by IBM—another firm that was once synonymous with computing. At the beginning of the 1990s IBM had to face up to the shift from a computing world dominated by mainframes to one dotted by personal computers. In this new world hardware became a low-margin commodity and Microsoft’s operating system took the privileged position. Today, Microsoft still dominates the PC market. But like IBM before it, today’s giant knows that its position is under threat.

    The threat to Microsoft comes from online applications, which are changing how people use computers. Rather than relying on an operating system and its associated application software—bought in a box from Microsoft, and then loaded onto a PC—computer users are increasingly able to call up the software they need over the internet. Just as Amazon, Google, eBay and other firms provide services via the web, software companies are now selling software as a subscription service that can be accessed via a web-browser. Salesforce.com [salesforce.com], the best known example of this trend, offers salesforce management tools; other firms offer accounting and other back-office functions; there are even web-based word-processors and spreadsheets. This lowers the economic and technical barriers to entry for firms wanting to compete with Microsoft, as well as diluting the advantages the firm gets from controlling how the computer works.

    These huge shifts in computing take a very long time, because there is so much inertia in the marketplace—the idea of online applications has taken years to get even this far. Microsoft is still in a position that most firms would kill for. Its two main products—Windows and Office—remain fabulously profitable quasi-monopolies. Even if online applications and open-source software make rapid progress, Microsoft would retain a powerful and profitable position for some time.

    For all that, however, online applications clearly threaten the way Microsoft makes its money. Its licensing agreements are geared for a world where software is a physical product, purchased on discs, and paid for at once or in regular instalments. But its online competitors charge each user a subscription: some like Google are even supplying software as a free online service, financed by advertisements. Last month Google acquired the firm that created Writely, a popular online word-processing program that is an obvious potential competitor to Microsoft Word.

    Online competitors have also mastered quick development and deployment times that Microsoft cannot match. Meanwhile open-source software—developed co-operatively and distributed free of charge—is also gaining ground. George Colony, the boss of Forrester, a technology-research firm, believes Microsoft faces the biggest challenge in the firm’s history: “Bill Gates knows how to compete with anyone who charges money for products,” he says, “but his head explodes whenever he has to go up against anyone who gives away product
    • As an experiment, I recently tried switching to a Gnome-based Linux system to replace my Windows desktop. I do a bunch of fairly standard office tasks -- spreadsheets, word processing, email, etc. But I do have some specific needs, such as needing to use a particular scanner, save files to a SMB share, etc.

      Using Linux was an unmitigated disaster. Things that seem like absolutely basic functionality don't work right. I spent literally 40+ hours poring over online forums trying to figure out how to get piec

      • How about instead of moderating my post as "flamebait", giving me some insight into how I'm wrong.

        To be clear, I *WANT* to use Linux as my desktop. I've used Linux for development purposes since 1995, and I'm a big fan of open source. I'm not trying to start a flamewar; I'm trying to understand how we could have a meaningful alternative to Linux.

        • Re:Windows monopoly is secure (Score:5, Insightful)

          by MightyMartian ( 840721 ) on Friday April 28, 2006 @04:28PM (#15223554) Journal
          It was unfair to mod you down, but at the same time, your's is not a universal experience. I have used *nix software for some time, and while there's no doubt problems with the interface, it's not really like Windows has some sort of foolproof one. What seems to be the key difference is that people are used to the Windows GUI, and that the metric being used isn't actually usability, but rather familiarity.

        • Re:Windows monopoly is secure (Score:5, Insightful)

          by FatherOfONe ( 515801 ) on Friday April 28, 2006 @04:58PM (#15223814)
          Ok, I need to understand a few things about your Linux experience. But before I do I want to tell you about a friend of mines "windows" experience. He got his brand new computer with Windows installed on it.

          It didn't come with Microsoft Office, and he just assumed that it would have that package. He was a bit taken back by the fact that to do Word, Excel, PowerPoint and Access he would have to shell out another $500-$600.
          He connected to the Internet and was off in running after a few hours of work, and suddenly he started to think how much Windows sucked. The problem you ask? Well he started to get all these "Windows" on the screen that prevented him from working. He also noticed that his computer was now crawling along, and much slower than it use to be. He has no clue of pop-ups and spyware. He does now. He went to load a "new" game and found that the his "video driver" from ATI was beyond buggy and crashed so much that he needed to reload Windows with a recovery CD. (The only CD provided by the manufacturer). He then realized that recovery meant "loose all your data on your HD). Now all this guy wanted to do was surf the web, use and office package, email and print.

          Now back to your problems. What exactly was your issues? What distro did you install? You say that you want to use Linux, then you have taken a giant leap forward and I can say without a doubt that almost every online support group is very friendly to new linux users. I would also trying a distro like Ubuntu.

          Also what exactly do you want to do with your computer?
          What hardware are you installing it on?

          Lastly, be prepared to hear that Linux may not be the OS for you. If you want all the simplicity of a Macintosh and know that all the Mac hardware you buy will work without ANY hassle, then you probably should go out and buy a Macintosh. Does this mean that Linux sucks? Nope, it just isn't a fit for you. Now if you want to play all the latest games and don't mind fighting spyware, viruses and stability issues, then Windows is probably the best for you.

          The advantage of Linux is that there will be competition. RedHat, SuSE, Ubuntu, et all are fighting to provide the best experience, and thus things are improving rapidly in the Linux world. Much much much faster than either Microsoft or Apple, and to be honest it amazes me that Linux has come so far so fast. So if Linux isn't for you today, then perhaps next month....

          • Re:Windows monopoly is secure (Score:5, Informative)

            by jimmyhat3939 ( 931746 ) on Friday April 28, 2006 @05:31PM (#15224067) Homepage
            I dont want to get into some huge thing here, but here's some info. I used Fedora Core 5. I'm extremely familiar with Linux, having used it to do development and as a server platform continuously since 1995. It's the best platform for those two tasks, in my opinion, bar none.

            So, I decided to try using it as a desktop product, now that I'm doing more "office" type tasks. Those elements I found very difficult, as described in my original post. Some stuff I figured out, after fooling around with config files. Other things I just couldn't fix. An example is the fact that when you're using OpenOffice Calc and try to save a file to an SMB share, it pops up windows about not being able to save a backup copy of the file. Yes, I checked all the permissions. Yes, I mounted the SMB share both by using Gnome's built-in smb:// interface and just sticking it in fstab. No, I don't have time to go through OOo's source code and fix the bug. I have a job.

            Just installing the thing and getting a good set of apps on it took about 8 hours. I followed a guide posted online. It worked well, but that's 8 hours I'll never get back.

            I think people are fooling themselves when they say people are just more familiar with Windows. As between Windows and OSX, I can accept that argument, since in my experience OSX works pretty well. Gnome and KDE are a different story. It's not just familiarity. It's the fact that they have serious bugs and problems that affect everyday users and make using them really hard.

            • I'm extremely familiar with Linux, having used it to do development and as a server platform continuously since 1995.

              I have used a Linux desktop for the last 5 years, starting with a retail copy of Mandrake and knowing almost nothing about Linux/Unix. While there have been problems, it has not overall, been any more hassle than Windows. This is why people suspect you of trolling - your experience is so much worse than ours or that of anyone we know that it seems highly improbable.

              and try to save a file

      • Microsoft said awhile back that Open Office is "10 years behind Microsoft Office".

        They are right.

        Open Office's interface is horrible. Inconsistent. 2.0 is an improvement, but what wouldn't be an improvement? I remember when Sun first released Star Office for free. It was a decent alternative to MS Office at the time.

        Back in what, 1998?

        It wasn't even a fully featured replacement then. OOo has gotten better, but it still needs a ton of work.

        This is not even mentioning that MS just revolutionized the enti
        • "Open Office's interface is horrible. Inconsistent."

          In what way? MS Office certainly has an inconsistent interface. You will find display properties under the file menu in MS Office for godsake. It makes absolutely NO logical sense. I have found the Open Office menus to be very consistent. Perhaps the difference is that I never bothered to memorize the menu layout in MS Office, instead I use the 'lets look where that feature should logically be located'. What scares me is that I am able to guess where featu

      • Re:Windows monopoly is secure (Score:5, Insightful)

        by tacokill ( 531275 ) on Friday April 28, 2006 @04:36PM (#15223614)
        Seconded. I "get" Linux and use it for some things I do. I am very proficient in getting it to do what I want it to do. BUT the usability of the OS as a desktop stinks. It is nowhere close to Microsoft in that realm. KDE/Gnome/whatever....I don't care. It's still not close (Aqua excluded).

        Great for servers. Terrible for desktops. And I don't even want to imagine taking support calls from my employees using Linux. It's hard enough to walk someone through "simple" things in Windows, much less Linux.

        I can only imagine the call:

        Me: "Yea, so go in and edit your /etc/fstab"
        them: "What do you mean edit?"
        Me: "Open Gedit, and modify the file"
        them: "So how do I open Gedit?"
        Me: (sigh) "I quit"


        I am just now starting to see most people grasp the concept of files and directories. And that's people who have been working on "business" computers for most of their adult lives. Never underestimate how clueless the typical computer user is and always overestimate how much time you have to spend with them to do the simplest things.

        • Let the clueless use Windows, I don't care. Just don't say that that is the entire measure of what constitutes "ready for the desktop".

          Personally I don't feel at ease in Windows because there _isn't_ a simple text file I can edit by hand to make something do exactly what I want.

          At the software company I work for, 80%+ of the people run Linux on their desktops, and it works fine. Just that the clueless need something limited, doesn't mean that the more complex stuff out there is bad. It just means it's not

      • Hmmm. It's unfortunate that you had such a poor experience; care to share what distribution of Linux you were using? There are dozens, and your experience with the issues you described would be completely different with each one.

        Having used Linux almost exclusively for many years, for both personal, employment and our own business, and having used both Open Office and Word/Excel extensively for business and personal communications and analytics, I can say without reservation that Word is a steaming heap

      • Re:Windows monopoly is secure (Score:5, Insightful)

        by Anonymous Coward on Friday April 28, 2006 @04:41PM (#15223671)
        Most of your problems seem to stem from trying to work with SMB shares under Linux. Now imagine a Linux user switching to Windows and trying to get the apps to work smoothly with NFS shares from Windows using only built-in features of the OS. The Linux user would naturally conclude that Windows sucks or is unuseable.

        Your file association problems are probably a result of Gnome's overzealous dumbing down of its features. I suggest sticking with KDE. At least none of the Linux file associations have trashed hundreds of thousands of systems due to security holes with buggy file association auto-launching the way Windows has.

        • Most of your problems seem to stem from trying to work with SMB shares under Linux. Now imagine a Linux user switching to Windows and trying to get the apps to work smoothly with NFS shares from Windows using only built-in features of the OS. The Linux user would naturally conclude that Windows sucks or is unuseable.

          This is a red herring. OS X also uses samba for SMB shares and there are never any issues reading/writing from any application (that i have encountered)

      • "And don't even get me started on file associations (what program runs when you double-click on a file with a given extension). No matter what I tried, I couldn't get Gnome to let me change the file associations for files on an SMB share. And, it's absolutely opaque how to change them for regular files too without resorting to editing text files in /usr/share/blahblah."

        What's difficult about right clicking and choosing "Properties" -> "Open With"?

        As for you other experiences, if that was typical do you t
    • Microsoft earns more than half its $40 billion or so of annual revenue--and the vast majority of its profits--on just two products: the Windows operating-system and Office...

      And of the two, I'm guessing that Windows makes up the far greater share.

      If MS lost significant "mind-share" to online apps to the detriment of Office, I have a feeling they'd still be in pretty good shape.

    • Spot the dinosaur
      Mar 30th 2006 | REDMOND

      This was published just under 11 months ago. Has anything significant changed with Microsoft yet? Not that I've noticed. Vista still hasn't shipped. Apple hasn't gained anything significant in market-share, and is shrinking by some estimates. Dell still sells the most name brand PC's. The Sun rises in the east, and sets in the west. And Microsoft has billions of profits each quarter.

      The upshot? When someone predicts what's going to be happening soon in im

  • Vista (Score:5, Insightful)

    by JediLow ( 831100 ) * on Friday April 28, 2006 @03:30PM (#15223073)
    Vista will be out in 2007... doesn't an increased in spending by Microsoft reflect marketing they'd have for a new OS?

    • Re:Vista (Score:5, Funny)

      by Anonymous Coward on Friday April 28, 2006 @03:32PM (#15223099)
      Vista will be out in 2007... doesn't an increased in spending by Microsoft reflect marketing they'd have for a new OS?

      No. Vista is due out every year, so the increased marketing costs should already be accounted for.

    • Re:Vista (Score:2, Insightful)

      by guice ( 907163 )
      Technically MS was expecting to release Vista in '06. If the money was indeed used for marketing, why wasn't it accounted for in last year's forecast?

      I don't think it has much to do with Vista. I think analysts are right in believing this has to do with an oncoming battle for the online market. MS has been trying for it for several years now. I can see them pushing harder once Vista is (finally) out the door.
    • Vista will be out in 2007

      And? MS does not really make money off of new versions of Windows (AFAIK). Most licenses for Windows are OEM licenses and its just "what comes with the computer".

      Office updates, on the other hand, makes MS money. Especially if the file formats change.

      Granted, they might make more money off of Vista because people might buy it 2 or 3 times to get the version they want.

  • Maybe they gave up the battle (Score:3, Funny)

    by nizo ( 81281 ) * on Friday April 28, 2006 @03:31PM (#15223088) Homepage Journal
    Microsoft has surprised analysts by forecasting significantly higher expenses in the next fiscal year...

    Or maybe they are just planning on migrating services to Linux [microsoft.com]? Where their announced expenses 5-20% higher than expected?

  • I predict that I'll make double current salary next year... F33R M3, Human Resources!!!

    • Can I Do This? I predict that I'll make double current salary next year... F33R M3, Human Resources!!!

      It's one thing to predict increased expenses, and it's another to predict increased income.

      Microsoft is doing the former.

      But, to answer your question 'literally', sure you can predict a doubling of your income. But it's probably unlikely you'll actually succeed.
    • Why is a useful link that helps people RTFA a troll?

      I learned about bugmenot from a similar post years ago and use it regularly.

      • Dunno, when I brought up BugMeNot in other threads I got modded flamebait.

        It seems n00bs with mod points don't read the fucking faqs and need to feel important by modding people down, and when they see "BugMeNot" rather than fucking googling they assume you're insulting somebody and act in accordance with their ignorance and inferiority complexes. But then, that's just my guess.
  • Or they could be spending more money on patents

    Or they could be spending more money on developing Vista

    Or they don't really think they have a chance in their feud with the European union after all...

    There are more options than "prepping up for war"...

    • Re:No no no - wrong conclusion (Score:4, Interesting)

      by truthsearch ( 249536 ) on Friday April 28, 2006 @03:39PM (#15223153) Homepage Journal
      From TFA:

      After Microsoft released its report, Mr. Sherlund issued a research note saying it appeared that the company planned to spend $2.4 billion more than he had expected in the 2007 fiscal year. He pointed to the costs of building the new Windows and Office Live online services, both intended to reposition the company to compete against Google and Yahoo.

  • Their expenses will be related to building out their online services infrastructure and shifting their business strategy to it. There was a good article [cnn.com] in Fortune recently about this shift.
    • And they'll pay for it with the extra revenue from the release of Vista. As usual they'll use their OS and Office money to fund their other black holes. And they'll keep hoping the other money losers eventually turn a profit, or at least help their OS and Office market share.
      • Haha, for a minute there you almost had me going.

        I mean, you write as though Microsoft hasn't built itself into a major multinational corporation from nothing, or brought vast wealth to its principals.

        • >> or brought vast wealth to its principals.

          Its just a shame they haven't brought principles to their vast wealth.
        • "I mean, you write as though Microsoft hasn't built itself into a major multinational corporation from nothing, or brought vast wealth to its principals."

          HAHA You almost had me going. You made it sound almost as if the company wasn't started by a wealthy individual from a wealthy family with almost limitless startup capital. And then your post would almost seem to imply that Microsoft had become a major mulinational corporation through good business practices instead of lies, theft, and where those failed l

      • That's *precisely* the reason that investors are getting jumpy about MSFT. MSFT is still priced as a growth stock and Microsoft isn't growing. Microsoft keeps promising that its non-Windows non-Office investments are going to pay off, but for the most part they haven't. Many of Microsoft's investors would rather see the money that currently is being routed into black holes routed into their pockets instead.

    • Comment removed based on user account deletion
  • I'd say at least part of those expenses are gonna be the losses from selling the 360 for $299 (uncrippled) in time for the PS3 launch or the Halo 3 release at the very latest.

  • They are already losing this war (Score:5, Interesting)

    by chriss ( 26574 ) * <chriss@memomo.net> on Friday April 28, 2006 @03:34PM (#15223117) Homepage

    From the end of TFA:

    The company also noted that its search ad revenue fell during the quarter as it tried to shift its online advertising away from a service provided by Yahoo to the newly developed MSN Ad Center system.

    This may of course change in the future, but I somehow doubt they can touch Google or Yahoo. The whole race for the crown is about the search based ads, not about who uses which search engine. So Microsoft has not only to get a lot of users to use MSN search as their standard search engine, they also have to convince all the advertisers that their system works at least as good or better than those from Google or Yahoo/Overture.

    When Microsoft entered a market late in the past, they always could leverage their market position. It was easier to use the already installed IE then to download another browser, it was easier to use Windows Media Player than to download and install RealPlayer or Quicktime. If Microsoft had no leverage in the market, they used their money: They bought shares in cable companies, started cooperations with mobile phone makers or massively subsidized XBOX/360.

    But what could they use this time? Desktop search integrated into Vista? Standard search in IE7? Lower prices for advertisers? Most likely all, but nothing will give them a real advantage. They will have to really compete and innovate this time, and that is not something they are good at.

    • When Microsoft entered a market late in the past, they always could leverage their market position. It was easier to use the already installed IE then to download another browser...

      Yes but you could easily and logically carry that to the next step and say "because MSN search will be the default home page in IE7 they will draw a number of users who simply find it easiest to keep it that way". Heck, my Mom used IE for a couple of years before she realized she could even change the homepage. I would guess that

      • Yes but you could easily and logically carry that to the next step and say "because MSN search will be the default home page in IE7 they will draw a number of users who simply find it easiest to keep it that way".

        Yes, but this is (as you stated) already the case: msn.com as the standard IE startpage features a "Search the Web" field at the top of the page. If this would be sufficient, MSN/Microsoft search would already be the most popular search engine. But Google managed to catch the top spot. It is m

      • The problem here is a cultural one, I'm afraid. A good many of the people I know, and work with in my position in tech support, get a new computer and immediately want to set the home page to Google. Putting a prominent search bar on the MSN site is, to my mind, a long shot at changing the culture. MS fell asleep at the wheel on this one, letting the Internet side fall to the wayside as it busied itself crushing other kinds of competitors.

        Here's the reality. Google isn't just a brand name, it has beco

    • 127.0.0.1 localhost
      search.msn.com google.com
    • But what could they use this time?...Standard search in IE7?

      You nailed it right there. If you look at IE 7 [microsoft.com] you see they have the search box like Firefox. Instead of Firefox's default search engine being Google, IE7 defaults to MSN Search. With 85% or more of the market satisfied to stick their default browser, what percentage will take the time to change their default search engine in IE7? I don't know the answer, but I'd bet it is less than half. I don't know about you, but I always use the search box
      • I'm running IE7 beta now and actually noticed something VERY suprising and interesting. The first time I browsed to google.com a little semi-transparent box poped up in the upper right-hand corner basically saying "Click here to make google your default search".

        Not sure if that was a Google or MS feature, but pretty cool and makes switching very easy. Though since I've gone back to the site I haven't seen the message again, so it may just be a one time thing.
      • Have you even tried using IE7's standard search? I had to check compatibility of one of our AJAX products with IE7 beta 2 and the Windows Life (Live?) search is horrible. It first goes to the Live home page, takes about 5 seconds to load it halfway, then aborts the page load to switch to the search page and takes another few seconds to load that one. All in all, something that should take a split second is now a half minute exercise.

        If they don't fix that and a few dozen other annoyances (asinine repetitive
  • How does one get from the fact that Microsoft is planning on spending more money this year than last to the assumption that they must be going to war with Google? If this was Google, everybody would be trying to figure out what new product they were going to come out with (Goobuntu, GInternet, etc). I've got a pretty low opinion of Microsoft, but I try to stick with justifiable reasons to dislike them, not jump to the worst possible conclusion every time they do (or plan to do) something.
    • How does one get from the fact that Microsoft is planning on spending more money this year than last to the assumption that they must be going to war with Google?

      The indicators consist of more than just an increase in Microsoft's spending. The price of aircraft carriers, cruise missiles and B-2 Stealth bombers has gone up considerably in recent months.

  • Microsoft started the battle long ago (Score:3, Insightful)

    by t0qer ( 230538 ) on Friday April 28, 2006 @03:36PM (#15223127) Homepage Journal
    The own a browser.

    First round, they tried to steer the web in their direction. Fortunatly open standards kept things under the public's control.

    IE7 they're starting to get a little better supporting stuff like AJAX, and PNG transparencies. What i'm seeing is a shift in Microsoft from "Let's make all the rules" to "Let's adopt everything".

    Not a long comment, but that's my thoughts on their strategy.

  • Google? wtf? (Score:4, Insightful)

    by moochfish ( 822730 ) on Friday April 28, 2006 @03:36PM (#15223132)
    If they plan to go to war, it's already started. Just look at MS Live, xbox, origami, etc.

    On the other hand, I imagine marketing, shipping, supporting, and even patching a new OS that will be installed on the majority of the world's newest computers will increase costs quite a bit for a company. Let's not forget IE7 and Office Live either.

  • Bill is Back, Productivity Soars (Score:5, Funny)

    by digitaldc ( 879047 ) * on Friday April 28, 2006 @03:36PM (#15223134)
    'It's pretty clear that Bill is running the company again,'

    It's true.
    And to increase productivity, everyone at Microsoft now has their homepages set to /. and their desktop outfitted with three screens. [imageshack.us]

  • Google's market share (Score:3, Insightful)

    by MCSEBear ( 907831 ) on Friday April 28, 2006 @03:36PM (#15223136)
    Gee, I saw recently that Google's market share for search is up again and so is Apple's share in mp3 players. Firefox has a climbing share in the web browser market. Microsoft can't dominate every market it enters. As a matter of fact, here lately they've been getting their ass kicked a lot. Does anyone think the original xbox would have sold near that many units if MS hadn't bought Bungie and not allowed them to ship for Mac and PC at the same time as they had planned? Instead we had a very cool game that would only play on xbox. The only way MS wins is by manipulating the free and open markets.
  • ...a large number of Seattle area furniture dealers are reporting soaring profits and unexpectedly high sales this quarter. "Teakwood and balsam chairs seem to be the seasonal favorite", says a salesman at a popular furniture dealership.

    More details on this and other news at 11am.

  • Not really (Score:3, Insightful)

    by CastrTroy ( 595695 ) on Friday April 28, 2006 @03:38PM (#15223146)
    The last time I remember them doing any real marketing for their OS was when Windows 95 came out. They didn't really market any of the other OSes all that much. I think the only reason they will have to market this one is because there isn't really any new features, and the old version is pretty stable. Also, the fact that you need a high powered computer to run the new UI (the only new feature) means that they're won't be a lot of people buying it off the shelf, only people who buy new computers. You don't have to market it to the person buying a new computer, because they are going to buy windows anyway, and the only version offered will be Vista.
    • They didn't really market any of the other OSes all that much. ...


      And I feel
      And I feel like I just got home
      And I feel

      Quicker than a ray of light she's flying
      Quicker than a ray of light I'm flying


      *shudder*

  • War Cry (Score:5, Funny)

    by AKAImBatman ( 238306 ) * <akaimbatman AT gmail DOT com> on Friday April 28, 2006 @03:39PM (#15223154) Homepage Journal
    According to recent rumors, Bill Gates is purchasing a Bradley Fighting Machine. He believes that it will provide Microsoft a leg-up in their war with Google. When asked about the situation, Larry Page responded with "we don't make forward looking statements." He was standing in front of an M-5 tank.

    In other news, Google has announced the release of the F-22 Raptor Beta(TM) program which allows for anyone with an internet account to remotely control an F-22 fighter. Anti-war groups have expressed a fear that teenagers remotely flying armed warplanes could pose a threat to world peace. Google responded by stating that the weapons systems are locked out except when over the testing range at Latitude 47.6 by Longitude -122.1.

  • More expenses? I have a couple of guesses (Score:4, Interesting)

    by erroneus ( 253617 ) on Friday April 28, 2006 @03:40PM (#15223164) Homepage
    Maybe even three.

    1. More money to lobbyists and politicians
    2. More money for lawyers in more lawsuits and appeals
    3. Start paying down the fines in EU that won't go away any other way.

  • I for one welcome our Microsoft overlords (Score:3, Funny)

    by Enrique1218 ( 603187 ) on Friday April 28, 2006 @03:41PM (#15223171) Journal
    Oh wait... They already are our overlords and they suck at it. Oh, nevermind!!!

  • Google is only one front, there are many others... (Score:5, Insightful)

    by postbigbang ( 761081 ) on Friday April 28, 2006 @03:41PM (#15223178)
    Here are the issues, pick anyone:

    1. Launch the most expensive product in your history (in terms of development dollars)
    2. Try to prevent nearly-free server operating systems from eating your lunch
    3. Pay off the EU fine (just a paltry $700 million or so)
    4. Launch a new version of your flagship application (Office Vista?)
    5. Stem the losses from your flagship gaming appliance (Xbox360)
    6. Make your Longhorn into steak
    7. Continue to avoid the wrath of various litigation efforts, some which you will lose...

    And there are many more, but these are sufficient to need to build a war chest, Google's success notwithstanding.
  • They have Vista to push and advertise next year, or is that not important anymore.
  • I bet with Vista (and Office?) being released in 2007 they're expecting a big boost in profits. They're going to use that extra revenue, as they always do, to fund their other departments, all losing money. It's the same beast, just getting bigger.

  • Say Goodbye To The Xbox 360 (Score:3, Interesting)

    by Anonymous Coward on Friday April 28, 2006 @03:44PM (#15223191)
    It wouldn't be so bad if the stock wasn't flat to declining over the past five years.

    But the lack of growth means Microsoft is having to spend more and more of its large amounts of cash on:

    1) Dividend increases
    2) Stock buybacks

    When you have around 10-11 billion shares issued to fuel your growth over the past couple of decades that ends up being many, many billions of dollars the company needs to keep spending every year just to keep shareholders from dumping the company and putting their money in real growth companies, like Google.

    The Xbox project has been the number one financial sore spot for the company for the past five years. The financial press has been wondering when a grownup is going to take charge up there in Redmond and clean house for the company. It sounds like Microsoft is finally starting that process.

    The days of the company throwing billions of dollars at marketplace failures like the Xbox and Xbox 360 are going to be coming to an end. Microsoft's core business monopolies are now no longer just being chipped away at but under direct assault. It will be interesting to see Microsoft awoken. The Ballmer era of the past five years or so has had the company acting like a aging and bumbling fool.

  • Cue "Ride of the Valkyries" (Score:4, Funny)

    by spun ( 1352 ) <loverevolutionary&yahoo,com> on Friday April 28, 2006 @03:50PM (#15223241) Journal
    And Ballmer shouting, "I love the smell of Vista in the morning. It smells like victory."

  • This is stupid (Score:5, Insightful)

    by XMilkProject ( 935232 ) on Friday April 28, 2006 @03:52PM (#15223250) Homepage
    Classic slashdot... Microsoft says they will be spending more money next year, so we get articles formulating elaborate stories about Bill Gates taking over the company again and using his monopoly to break anti-trust laws and kill the little guy, etc, etc.

    This is just random bullshit speculation, might it just be that microsoft is in the middle of some of the largest product launches in their history, with SQL server, new development tools, a huge new Operating system, new web browsers, and a new website www.live.com.

    I suppose it would just be too logical that they might be spending money marketing and supporting all these huge new endeavors.
    • This is just random bullshit speculation, might it just be that microsoft is in the middle of some of the largest product launches in their history,

      Or maybe it is just to pay off all those shills we keep hearing about! ;)

  • Intersting effect on the stock too... (Score:4, Informative)

    by Mr. Flibble ( 12943 ) on Friday April 28, 2006 @04:04PM (#15223338) Homepage
    MSFT took a hammering today as it lost 11% of its value today - it remains to be seen if this is a permanent fall or not.

    [url]http://biz.yahoo.com/ap/060428/microsoft.html ?.v=4[/url]

    Almost makes MSFT look like a value stock... (That is, if you can evalutate MS on technical merits and not knee-jerk "Linux r00ls M$ SuX0rs!!!" criteria.)

    However, I personally wonder if Mac OS X won't take a larger chunk out of MS in the coming future... What do you guys see in the crystal ball for Microsofts Future?
    • >> That is, if you can evalutate MS on technical merits and not knee-jerk "Linux r00ls M$ SuX0rs!!!" criteria.

      MS-originated technical merits? wow thats a slim book. And regardless of how you choose to spin it... Linux (and Opensource in general) IS always better in price and frequently better in quality than anything MS has originated.
      • Linux (and Opensource in general) IS always better in price and frequently better in quality than anything MS has originated.

        Well, I was reffering to stock prices here and modes of investment, as there are limited options for investing in Linux, like RHAT and LNUX and such. So, I should have included "business" as one of the technical merits.

        However, I must also include a great sig of a poster here that reads: "Linux is only free if your time is worthless." because it is pretty much true. Note, I don't disl
        • "Linux is only free if your time is worthless."

          Well i also work 100% with Linux today and from my point of view Linux is always easier to setup, takes half the time and is much easier and cheaper to maintain. People take for granted that linux is harder to use than Windows and other comercial software.
          • "Linux is only free if your time is worthless."

            Well i also work 100% with Linux today and from my point of view Linux is always easier to setup, takes half the time and is much easier and cheaper to maintain. People take for granted that linux is harder to use than Windows and other comercial software.

            I agree, however, the point of the guy's sig is that it DOES requre some setup, and it does require some training. I can tell you than in 97 when I first started using Linux I was far more efficent with Window
    • Almost makes MSFT look like a value stock...

      All my Linux opinions aside, what is there about Microsoft that would project any growth? Vista is late and has had most of the mildly interesting features stripped out. The Office suite is about as bloated and ridiculous as you could possibly make word processing and spreadsheets. I don't see much for revenue there. I don't know if the Xbox has actually made any money yet. There was a bunch of noise about Groove and Ray Ozzie a while back, but we haven't
  • an indication that the company might be getting ready to do battle with its online rivals.

    Or just buy them outright!

  • Let's face it, if a 'bug' in Vista prevents browsers from visiting 'www.google.com', or asks you 'would you like to try MSN search instead?' or just puts a popup like 'Warning: accessing this site may expose your computer to malicious code', then google is dead. Since Microsoft knows the USDOJ will let them do anything they want, I wouldn't put it past them. If google sues for billions of dollars after they go bankrupt, it is a small price to pay to preserve the monopoly.
  • What a great idea! Wars always solve problems! Like the war on poverty, or the war on drugs, or the war on terror! Well, I guess the one problem they always solve is how to get rid of extra cash...
    • Sometimes they solve problems. World War II, The Revolutionary War, the (US)Civil War. OTOH, it is possible we are too liberal with our usage of the term 'War' especially when applying it to business.
  • To prepare for war, all MS execs are now attending boot camp, here is a recent exchange between private Balmer and the lead drill instructor, Gunnery Sgt. Heartman

    GSH: Let me hear your war cry!
    SB: Developers!
    GSH:Bullshit, I didnt buy it!
    SB: developers, Developers! Developers Developers Developers Developers DEVELOPERS!!!!!!
    GSH: Bullshit! Sound off like you've got a pair!
    SB: I WILL FUCKING KILL GOOGLE!!!
    GSH: Work on it.

  • I think the money are mostly being spent on marketing. Considering how it has worked in the past it has never been about better products, just marketing that could make an eskimo buy a refridgerator.
  • .......Ballmer's crack about trying to kill Google has some validity after all. Well, good luck to them on that front. I suspect we'll see who the real fucking pussy is now! (Hint: It's not Eric S.)

  • And Their Stock Price Takes the Hit! (Score:4, Informative)

    by twitter ( 104583 ) on Friday April 28, 2006 @06:22PM (#15224391) Homepage Journal
    An eleven percent stock price fall has stunned Bill [reuters.com]. Once bitten, twice shy, investors doubt Bill will ever share the wealth. Those investors might also have doubts about Vista as they scratch their heads and think twice about moving their own computers to the new same old, same old. From the article:

    Shares in Microsoft Corp. (MSFT.O: Quote, Profile, Research) slid more than 11 percent on Friday, their biggest drop in more than five years, after the software giant said earnings would be hurt by increased investments aimed at fending off rivals such as Google Inc. ... The move shocked Wall Street, which had hoped to benefit from the company's biggest product releases in years, with its Vista operating system and Office 2007 scheduled for January. ... "This is still a company that is extremely profitable. What people are worried about is whether that ever flows through ... to the benefit of shareholders, or does the company spend that money," said Charles Di Bona, an analyst at Sanford C. Bernstein.

    No doubt disspointing reviews of Vista and DRM'd content are part of the fizzle.

    The long predicted downward spiral has begun. Employees are leaving for greener fields, product sucks and the competition is better. It will only get worse for them. They had their chance to fix things back when they promissed to take care of security four (five?) years ago. Instead of fixing, they wasted their time and energy with more anti competitive junk like Bitblocker, Paladium and lock box media. Their efforts to expand into the server market flopped and so will their efforts to expand into the kinds of services they derided back in 2000. Such a spiral could not have happened to a nicer company.

    The Microsoft idiots thought they were going to come out swinging and are surprised that people are tired of being punched in the nose.

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