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Microsoft Posts First Quarterly Loss Ever

samzenpus posted more than 2 years ago | from the hole-in-the-bucket dept.

Microsoft 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."

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Yay! (5, Funny)

Anonymous Coward | more than 2 years ago | (#40705557)

We waited for this for too long!

Re:Yay! (-1)

Anonymous Coward | more than 2 years ago | (#40705591)

Check out this OSX Mountain Lion desktop screenshot. [fastpic.ru] LOL how could anyone *really* work like this? Apple is clearly integrating the wrong aspects of iOS into OSX.

Re:Yay! (5, Informative)

Anonymous Coward | more than 2 years ago | (#40705635)

NSFW

Re:Yay! (1, Offtopic)

lurker1997 (2005954) | more than 2 years ago | (#40706247)

I scanned the AC's comment quickly, read the -1 as 1 and clicked the link. In the intervening half second before the new page loaded, my eye caught your NSFW comment. Thank you!

Re:Yay! (-1, Troll)

Anonymous Coward | more than 2 years ago | (#40705641)

I was happy to see how they treated the dock.

Re:Yay! (-1, Offtopic)

Jeremiah Cornelius (137) | more than 2 years ago | (#40705677)

That's the Pushmepullyou, from Dr. Doolitle!

I'm definitely not eating at Wendy's, after that...

Re:Yay! (1, Informative)

haruchai (17472) | more than 2 years ago | (#40705993)

Gay porn alert, /.tters! Do not click, well, unless that's your thing.

Re:Yay! (5, Funny)

Anonymous Coward | more than 2 years ago | (#40705645)

Yes!! They are totally in their final days! If they do this 80-100 more times they'll be finished!!!

Re:Yay! (5, Insightful)

danomac (1032160) | more than 2 years ago | (#40705651)

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.

Re:Yay! (1, Informative)

Anonymous Coward | more than 2 years ago | (#40705751)

As many other people have pointed out to you in other articles, Microsoft makes bad acquisitions every year. The underlying losses are as significant as they seem.

This apologist attitude is dangerous to investors and Microsoft employees alike.

Re:Yay! (5, Informative)

HarrySquatter (1698416) | more than 2 years ago | (#40705811)

You're joking, right? Last fiscal year they had net income of $23 billion and the previous quarter they made they made about $21 billion in revenue and net income of $6.6 billion.

Re:Yay! (1)

Anonymous Coward | more than 2 years ago | (#40705877)

They don't make 6.2 billion dollar bad acquisitions every year. And frankly bad acquisitions are the easiest thing in the world to stop doing. They have way too much money for this to be a severe problem.

It's not awesome for them that they had a severely bad acquisition but it's basically already built into their share price (note that MSFT shares are up 2% in after hours trading after this news -- they easily beat estimates).

Re:Yay! (5, Informative)

danomac (1032160) | more than 2 years ago | (#40706135)

I probably shouldn't respond to an AC... but oh well.

I actually read TFA and it said they lost $6B due to a bad acquisition and that's why the quarterly profits were where they were. I made a deduction from that article that it isn't going to affect Microsoft in any way really and posted a reply to the 'finally they're going down' comment.

I'm not what you'd call a fan of Microsoft in any way, I use their products because I have to.

Basically what happened is a bug hit Microsoft's windshield , and Microsoft will flick on the wipers and be on their merry way.

Re:Yay! (2)

user flynn (236683) | more than 2 years ago | (#40706507)

And the $6.2B was a write down from a 2007 acquisition.

    Not to mention stocks are up 2.5% after the announcement (not just the part about a $492M quarterly loss, and I use the word loss loosely).

Re:Yay! (-1)

Anonymous Coward | more than 2 years ago | (#40706513)

I shouldn't reply to someone who bashes ACs simply because they don't have an account on some shitty website, it shows a lack of good judgement and lack of life experience.

Re:Yay! (3, Insightful)

HermMunster (972336) | more than 2 years ago | (#40705819)

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.

Re:Yay! (0, Insightful)

Anonymous Coward | more than 2 years ago | (#40705889)

Microsoft made a bad acquisition and they lost money

Yeah, they 'acquired' Steve Ballmer.

Re:Yay! (1)

tompaulco (629533) | more than 2 years ago | (#40706255)

I guess when you're big enough you can do a six billion dollar oops and nothing much happens.
They didn't lose $6 billion, only $583 million. And if they fired the right 50 people, then they would have broken even (well, except for having to pay the golden parachutes of those same 50 people).

Re:Yay! (0)

Anonymous Coward | more than 2 years ago | (#40705665)

Hmmm. I am not sure.. Yeah everybody hates Microsoft. But when MS posts losses then be really worry for the whole economy..

Re:Yay! (4, Insightful)

Johann Lau (1040920) | more than 2 years ago | (#40706143)

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.

Slashdot posts losses every day (-1)

Anonymous Coward | more than 2 years ago | (#40705583)

Lose your cock in goatse's ass.

First post (-1)

Anonymous Coward | more than 2 years ago | (#40705587)

M$

Re:First post (-1)

Anonymous Coward | more than 2 years ago | (#40705837)

As posted today, you also appear to be at a loss. n00b

Re:First post (2, Funny)

Anonymous Coward | more than 2 years ago | (#40705843)

More like M-$

Re:First post (4, Funny)

Anonymous Coward | more than 2 years ago | (#40705887)

Shit, dont any of you know Accounting 101?

(M$)

IBM's plan with linux is working. (-1)

Anonymous Coward | more than 2 years ago | (#40705593)

IBM's push of Linux has an effect on Microsoft, yet they didnt foresee Microsott alliance with conical {Ubunto}.

Another Shitty Summary. (5, Insightful)

Anonymous Coward | more than 2 years ago | (#40705631)

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:Another Shitty Summary. (1)

santax (1541065) | more than 2 years ago | (#40705647)

Not a fan of them, but I was thinking the same. That really pulled them down and people are waiting to buy new pc's/laptops for when win8 comes out. The poor bastards.

Re:Another Shitty Summary. (0, Troll)

Anonymous Coward | more than 2 years ago | (#40706079)

That really pulled them down and people are waiting to buy new pc's/laptops for when win8 comes out

This shit again? The normal consumer doesn't have a clue about Windows 8. They are too busy buying iPads.

Re:Another Shitty Summary. (4, Interesting)

cpu6502 (1960974) | more than 2 years ago | (#40706505)

Not me. I'm buying a new PC/laptop NOW while it still comes with Windows 7, versus getting stuck with Vista Part 2 (Win8).

Oh and not everything is bright & shiny. The article continues: "The charge was an acknowledgement that the companyâ(TM)s struggling online services division is a significant financial drag on the company, losing nearly $2 billion over the past year in addition to the $6.2 billion writedown. Microsoft is still pouring money into runner-up search engine Bing, but it only has a fraction of the market share rival Google enjoys. "It brings into question Microsoftâ(TM)s ability to compete on the advertising-driven web and suggests this is a market segment that is beyond Microsoft, creating long-term doubts over Bingâ(TM)s future," Rob Enderle, principal analyst at the Enderle Group, said via email."

Mod Up: Informative (1)

LordLucless (582312) | more than 2 years ago | (#40705727)

Flamebait? I hate MS as much as the next guy, but the AC above is accurately pointing out factual errors in the summary. It's deceptive (and raises false hope in some).

Re:Mod Up: Informative (2)

oakgrove (845019) | more than 2 years ago | (#40706067)

Um...from the summary:

The loss stems from Microsoft's continued struggles with the online services division

Was not the 6 billion dollars they wasted on aQuantive an effort to better place themselves in the online ad sales picture?

Re:Mod Up: Informative (3, Insightful)

LordLucless (582312) | more than 2 years ago | (#40706327)

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:Mod Up: Informative (1)

oakgrove (845019) | more than 2 years ago | (#40706365)

It's not from their "continued struggles"

MS' online division isn't continuing to struggle? How much money is Bing making these days?

Re:Another Shitty Summary. (5, Insightful)

jcr (53032) | more than 2 years ago | (#40705859)

They're not going to die this year, but they do have a long decline ahead of them, just like IBM in the 90s. Ballmer's been wasting the shareholders' money on failing ventures for many years now, and the Windows/Office cash cow is running out of steam.

-jcr

Break Them Up (5, Insightful)

geoffrobinson (109879) | more than 2 years ago | (#40706183)

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:Break Them Up (3, Interesting)

jcr (53032) | more than 2 years ago | (#40706497)

They would actually be more valuable broken up.

Well, potentially. Their biggest problem though is an empire-building management culture, and if those attitudes continue into the smaller organizations that result from a breakup, they'd die faster.

-jcr

Re:Another Shitty Summary. (5, Funny)

bitt3n (941736) | more than 2 years ago | (#40706461)

the Windows/Office cash cow is running out of steam.

I think this is a relevant moment to reflect on that timeless investment maxim, "never put money in a company whose profits depend on a steam-powered cow."

Re:Another Shitty Summary. (4, Informative)

je ne sais quoi (987177) | more than 2 years ago | (#40706417)

It was in fact NOT a great quarter for Microsoft. I agree that the $6.2 billion loss on the acquisition is a red herring, but if you disregard that and look at the rest of their business, you'll find that their windows revenue declined 13% [nytimes.com] Yes, DECLINED 13%. Now, you can further write off most of that decline by saying that this is due to the reduced cost of Windows 8 that Microsoft offered to people buying Windows 7 now, but even after you do that, Windows revenue declined 1%. That's not huge, but they still DECLINED in windows sales. You know... WINDOWS... one of the two cash cows that Microsoft owns? Microsoft's core business is shrinking. If I help Microsoft stock, I'd be a bit worried. (For what it's worth, I do hold Apple stock, and I'm worried there too, Microsoft's wave has crested, Apple's is at the peak so there's nowhere to go but down, I'm just waiting for the right time to sell, it might be now.)

But don't let that stop the speculation about how "Microsoft" is doing great.

Re:Another Shitty Summary. (1)

Anonymous Coward | more than 2 years ago | (#40706481)

giant write down

Weasel words. Perhaps the largest part of the Microsoft business model is acquisition. Now it appears they are bad at buying stuff. How many more pieces of Microsoft are really zombies in need of a `write down?' Just how rotten are the supports holding up Microsoft's increasingly irrelevant roof?

They actually have a marketing budget for IE9. They make ads for that steaming POS.

These won't be the last losses for Microsoft.

Loss due to 8 billion write down. (5, Insightful)

140Mandak262Jamuna (970587) | more than 2 years ago | (#40705657)

No, Microsoft did not bring in less money than it spent. It has decided to wash its hands off of some of the investments it made. It wrote down the value of some of the stuff it owns, and that is shown as a loss.

Re:Loss due to 8 billion write down. (3, Informative)

Anubis IV (1279820) | more than 2 years ago | (#40705707)

Indeed. They made an investment that didn't pan out several years ago, and now they're writing it off in a lump sum that's hitting them this quarter. That means that the biggest contributor to their quarterly loss was a one-time event that is already over and will not have any bearing on future profits or losses. This is not the proverbial writing on the wall yet.

Re:Loss due to 8 billion write down. (0, Flamebait)

HermMunster (972336) | more than 2 years ago | (#40705849)

Indeed. Microsoft is a monopoly. It's real hard to loose money as a monopoly.

Re:Loss due to 8 billion write down. (0)

Anonymous Coward | more than 2 years ago | (#40705711)

What investments? What stuff?

Re:Loss due to 8 billion write down. (0)

Haxagon (2454432) | more than 2 years ago | (#40705771)

aQuantive.

Re:Loss due to 8 billion write down. (0)

Anonymous Coward | more than 2 years ago | (#40705715)

i will mod you bro

Write down is still money that was spent (4, Interesting)

DragonWriter (970822) | more than 2 years ago | (#40705775)

No, Microsoft did not bring in less money than it spent. It has decided to wash its hands off of some of the investments it made.

The second sentence is basically true, but the first is somewhat misleading. Essentially, they recognized that a $6.3 billion purchase of aQuantive that they made (which wasn't counted as an expense at the time, because it was treated as the acquisition of an asset of equal value to the purchase price) was, in fact, almost a pure expense, since the asset they acquired turns out to be pretty much entirely worthless (they took a $6.2 billion writedown against the $6.3 billion purchase.)

But that writedown is money that was actually spent, its just money that was spent in 2007 and not counted as an expense then.

Re:Write down is still money that was spent (0, Troll)

140Mandak262Jamuna (970587) | more than 2 years ago | (#40705863)

hey hey you want me to shoot for frist psot and still be 100% correct? Yes, it is true, the money had already been spent way back in 2007 and they admit they got zilch for that investment. It also includes about 2 billion it had spent on the online arena without much results. Wonder where that money went? Could they have been giving 2 billion in bing rewards? Or it was all just paying shills to post in Slashdot?

Re:Write down is still money that was spent (1)

Mabhatter (126906) | more than 2 years ago | (#40706295)

The real problem is that with their margins, they STILL shouldn't BE ABLE to post a loss.

This is why people are starting to complain Microsoft is pissing away VAST amounts of money. Their main products, servers, OS, Office, are 80%+ gross profit. That accounts for a large portion of their income. So if those are half their income ($10B), how do they piss away $8 BILLION of gross profit in a year?!

That's the kind of numbers Balmer is mismanaging.

Steve Jobs took risks, but with all their riskiest products, Apple sold every UNIT at some kind of PROFIT. Apple kills products that dont make ENOUGH PROFIT. They don't sell ANYTHING as a loss leader.

Re:Write down is still money that was spent (0)

dAzED1 (33635) | more than 2 years ago | (#40706383)

just fyi, your caps-lock key appears to be malfunctioning, causing it to turn on in random spurts. The effect is to make your writing look as out-dated as my nick.

Re:Write down is still money that was spent (1)

antifoidulus (807088) | more than 2 years ago | (#40706533)

Actually they are pretty much selling their OS as a loss-leader. Lion and Mountain Lion, while certainly not very expensive to develop, probably ended up costing Apple more than they collect from users for the upgrades. However the difference is very, very minimal.

Ballmer (4, Insightful)

twistedcubic (577194) | more than 2 years ago | (#40705659)

This should be the end of Steve Ballmer's reign. He was a genius at muscling OEMs into screwing over the competition, but now that Windows is so ubiquitous, there's nothing else for him to do but retire.

Re:Ballmer (1)

hcs_$reboot (1536101) | more than 2 years ago | (#40705885)

"Balmer" and "genius" in the same sentence? Really?

Re:Ballmer (0)

Anonymous Coward | more than 2 years ago | (#40705911)

There is a period between Ballmer and genius in that post.

Re:Ballmer (0)

Anonymous Coward | more than 2 years ago | (#40706531)

He doesn't have to retire. He could, y'know, walk the earth.

Take a look at the details (4, Interesting)

Anonymous Coward | more than 2 years ago | (#40705675)

That loss is entirely down to the aQuantive 6.2 billion writedown. As far as analyst estimates are concerned, taking that into account, this is actually a beat. Take a look at after-hours stock price movement. Did MSFT get slammed?

Re:Take a look at the details (5, Funny)

MightyMartian (840721) | more than 2 years ago | (#40705789)

That loss is entirely down to the aQuantive 6.2 billion writedown. As far as analyst estimates are concerned, taking that into account, this is actually a beat. Take a look at after-hours stock price movement. Did MSFT get slammed?

No, but in a distant corner of the galaxy, Gronek II, Emperor of the Seventh Moon of Choil, after a tasty breakfast of fried duzelwip, lightly salted wurp jelly and a hot steaming cup of rinok-sphoo, opens up his paper to find out that his most beloved child, the fruit of his loins, the offspring of his brief but tumultuous marriage to Princess Nerb the Six-breasted; Steve Ballmer, has ceased to throw chairs, fuck over Netscape and perform all those other ceremonies one would expect of a scion of the proud house of Choil, and in his greater anger has spat out an orifice-full of hot rinok-sphoo. Before the Sixth Moon of Choil has done its second transit, the invasion fleet will be in place, and Steve Ballmer, once proud Prince of Choil will have to answer for his actions.

Might need to change their tag... (-1, Flamebait)

EdIII (1114411) | more than 2 years ago | (#40705679)

I guess we can't use M$ anymore then?

Can't say I am all that surprised. Microsoft has been losing steadily on a large number of fronts for years and SAAS offerings are not nearly as profitable as huge license expensive server farms that do the same thing. In many ways they are eating their own lunch.

  Part of me wants to rejoice, but there really isn't anything to celebrate since it leaves Google and Apple in the room alone. Hardly good for the consumer.

Hopefully this is a wake up call to the folks in Redmond.

Re:Might need to change their tag... (0)

Anonymous Coward | more than 2 years ago | (#40705987)

The company reported a record fourth quarter revenue of $18.06 billion, but did suffer a net loss over the last three months of $492 million....It's also important to realize that that loss is due to a one-time "goodwill impairment charge" associated with the collapsed aQuantive deal that set Redmond back $6.2 billion.
http://www.engadget.com/2012/07/19/microsoft-announces-record-q4-18-06-billion-in-revenue/ [engadget.com]

Re:Might need to change their tag... (0)

real-modo (1460457) | more than 2 years ago | (#40706283)

Time was when Microsoft's gross profit ratio was about two thirds, not one third. Hmm.

And (0)

ozduo (2043408) | more than 2 years ago | (#40705681)

google posts a rise in earnings for same period http://www.usatoday.com/tech/news/story/2012-07-19/google-earnings/56340478/1 [usatoday.com]

Re:And (1)

HarrySquatter (1698416) | more than 2 years ago | (#40705725)

Yes, because Google didn't do a $6.2 billion writedown like Microsoft did.

Re:And (0)

ozduo (2043408) | more than 2 years ago | (#40705803)

From my experience of the corporate world, when you have a bad period you whitewash it with a write down!

Re:And (1)

HarrySquatter (1698416) | more than 2 years ago | (#40705835)

Uh huh. Except that if you take out the writedown their quarter was pretty close to the previous one in which they had $6.6 billion in net income.

Re:And (1)

blind monkey 3 (773904) | more than 2 years ago | (#40706527)

From my experience of the corporate world, when you have a bad period you whitewash it with a write down!

Just use a heavy flow tampon and take some Ibuprofen for the pain.

"the loss stems from..." (4, Informative)

Haxagon (2454432) | more than 2 years ago | (#40705685)

"The loss stems from Microsoft's continued struggles with the online services division."

That's a flat-out deception! The loss stems from the fact that they made a 6 billion dollar write-off. The summary makes it seem like their online division is just naturally bleeding billions.
Millions, maybe, but not billions.

Re:"the loss stems from..." (5, Insightful)

DragonWriter (970822) | more than 2 years ago | (#40705891)

"The loss stems from Microsoft's continued struggles with the online services division."

That's a flat-out deception!

No, its not.

The loss stems from the fact that they made a 6 billion dollar write-off.

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.

The summary makes it seem like their online division is just naturally bleeding billions.
Millions, maybe, but not billions.

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..." (3, Insightful)

shutdown -p now (807394) | more than 2 years ago | (#40705937)

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:"the loss stems from..." (1)

DragonWriter (970822) | more than 2 years ago | (#40706029)

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).

How do you get the implication of something "particularly worse than the preceding ones" or being the "start of a trend" from the claim that was disputed in TFS -- the claim that the loss stems from continuing struggles in the online services division?

That actually outright states (not merely implies) the opposite of what you are trying to argue that it wrongly implies -- that the problem isn't new, and that its not the start of anything but a symptom of something that has been going on for quite a while.

Re:"the loss stems from..." (2)

shutdown -p now (807394) | more than 2 years ago | (#40706149)

From the title of the article. "First quarterly loss ever" is not particularly important when the loss in question is just an accounting trick to defer and lump together the recognition of a loss that occurred a long time ago in practice.

Re:"the loss stems from..." (1)

arth1 (260657) | more than 2 years ago | (#40706047)

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.

This is slightly misleading - they sold off Razorfish from this acquisition for over half a billion, so the value must have been higher.

Yes. they overpaid. Yes, it was probably based on chummy factor more than value. No, I don't think this marks the beginning to the end. I think Windows 8 will earn that distinction, and even then, it takes a long time for this big a whale to bleed out.

Re:"the loss stems from..." (4, Insightful)

b4dc0d3r (1268512) | more than 2 years ago | (#40705901)

The summary makes it seem like their online division is just naturally bleeding billions. Millions, maybe, but not billions.

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..." (2)

reversible physicist (799350) | more than 2 years ago | (#40705995)

The ad acquisition was intended to help their online businesses, which lost $2 billion in the past year, and is instead a complete write-off. They have several other big bets that could fail, including Bing and their Windows 8 move into mobile. If these fail, there will be more big write-offs.

MSNBC loves to blow things out of proportion (1)

bryantthesmith (862805) | more than 2 years ago | (#40705701)

Here's a great example of mainstream media blowing things up to get eyes on their site. Microsoft had one of the best FYQ4s ever and if it wasn't for a write off of $6 billion on a stupid acquisition in 2007 it would have made a huge profit. MS stock is up and investors are happy. Haters are going to hate.

Re:MSNBC loves to blow things out of proportion (-1)

Anonymous Coward | more than 2 years ago | (#40706161)

investors are happy

MSFT investors are fools.

stock market (1)

eyenot (102141) | more than 2 years ago | (#40705709)

My-my, what a perfect opportunity to analyze the differences between bulls and bears in the 21st century.

There are definitely those who will say this means the beginning of the end and who will sell, and those who will say this means nothing except a company has reached the maturity to be expected of any stock and that this is the beginning of the beginning and will hold. There are those who this is the first time they ever heard of Microsoft and they will buy because they figure, hell, the price is low, good time to buy.

As the Owl said in the Tootsie-Pop commercial, "Let's -- a'find out!"

and it's going to get worse due to market forces (0)

Anonymous Coward | more than 2 years ago | (#40705723)

Most predictions are that by late 2013 or early 2014, 50% of the entire computing market by unit sales is going to be tablets - something almost certain to be true unless there's a radical change to the rates of growth within the next 18 months. Microsoft doesn't have shit in the tablet space. Their monopoly is worthless there. It's a battle between Android and iOS.

Microsoft's core market is fading fast, and they're floundering around like a fish out of water. It's amusing to watch.

Captcha: exorcism :)

Re:and it's going to get worse due to market force (2)

Bigfishbowl (528934) | more than 2 years ago | (#40706043)

You know, I keep hearing this, but I do not understand how that is true. Were it true, you, being a slashdotter and thus years ahead would be composing this on a tablet. Apparently the soft-keyboard and such are no bother, nor is the lack of easy copy/paste functions. Personally, I'm typing this on my workstation which will never, ever, ever leave my office. Nor should it. I create content and solve problems on it. People may later consume said content but if you want to actually get anything more serious than email done, you need a real computer. Furthermore, could you imagine spending 8 hours a day on a tablet? That is a laughable suggestion. Given that unemployment is less than 50%, I suspect most people using computers for something other than leisure will still use a keyboard at some point during the day.

Positive cash flows (4, Insightful)

Mean Variance (913229) | more than 2 years ago | (#40705731)

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]

Re:Positive cash flows (2, Insightful)

Mashiki (184564) | more than 2 years ago | (#40705881)

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:Positive cash flows (1, Interesting)

Anonymous Coward | more than 2 years ago | (#40706111)

Microsoft has been pouring money onto everything until they monopolize it. It worked really well and annihilated a lot of competitors by the way.
I remember the times Microsoft will literally buy you to develop for the xBox or DirectX. I was there and then I saw the people that got bought to say that they felt "trapped" and could not get out from MS tech.
But as new companies with big pockets got into the game, first Google, then the new Apple and then Facebook, the last one with so much money and not really knowing what to do with it, the game did not worked as well as before.
The Microsoft Zune did not work out, Life, Bing and now Lumia are not working out as expected, even after pouring billions from their desktop and Office monopoly.

Re:Positive cash flows (1)

Mashiki (184564) | more than 2 years ago | (#40706409)

Microsoft has been pouring money onto everything until they monopolize it. It worked really well and annihilated a lot of competitors by the way.

Hey good for them. Welcome to capitalism, here's an idea. If you don't like it, start your own company and become a competitor. It does still seem to work. So I'm not really sure what you're post is about.

Even self-created monopolies come crashing down.

Blood in the Water (4, Insightful)

amiga3D (567632) | more than 2 years ago | (#40705739)

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:Blood in the Water (1)

reversible physicist (799350) | more than 2 years ago | (#40706403)

If I were an MS investor, I would take this as a sign that decision making at MS is not very impressive lately. So far they haven't made much progress breaking into online and mobile, and their old cash cows will dry up eventually. Maybe Windows 8 and Surface will be their big breakthrough in mobile, but I doubt it. Windows has a lot of momentum and so MS will probably get several tries at this, but I think they're going to have to make some difficult changes in business model and corporate culture to succeed.

Re:Blood in the Water (1)

steelfood (895457) | more than 2 years ago | (#40706519)

Hardly. I'd like to see more diversity in the OS/Office suite app space, but this was a write down for one of their online services purchases. This means next to nothing when you're talking about their cash cows, especially since most of their other divisions have been bleeding money (or, like the Xbox, barely in the black).

Until they make a bad Office acquisition or bad OS acquisition, there's no weakness to exploit.

Article: It failed to see iPhone and touchscreen (5, Interesting)

140Mandak262Jamuna (970587) | more than 2 years ago | (#40705831)

In addition to its $6.2 billion disaster of a purchase, Microsoft made another critical mistake in 2007: It failed to recognize the debut of Apple's iPhone as the game-changer it turned out to be and missed the launch of the touchscreen revolution. Its partnership with troubled Finnish cell phone company Nokia notwithstanding, Windows phones barely have a toehold in the iOS-Android duopoly.

It is par for the course for Microsoft to phoo phoo anything new (Remember "640K memory is enough for everyone", "You mean companies are going to print their URLs in their advertisements?" ) and then play catch up. Usually that strategy worked out for Microsoft because corporate computers formed 90% or more of the computing platforms in the world, and it had a stranglehold on that market.

Two things stymied Microsoft in the cell phone arena. First was obvious: It lacked market dominance for ram through bad but barely adequate competitor and swamp out the competition.

But there was a second player, that we slashdotter would loathe to give credit to. The much maligned evil phone companies. They are used to getting hefty margins peddling corded and cordless plain old telephone equipment. They saw what happened to the manufacturers of the ubiquitous beige boxes. They were reducing competing purely on price, the brutal price war changed the landscape. In the 1990s the hardware accounted for 95% of the cost of the computer and the software was hardly 5%. While software prices remained stable and went up (MS-Office retailed for $550 when the PCs had fallen below 500$ mark). The telcos were determined to not to let that happen to them. Being incompatible with Microsoft, and not giving it any toehold was the common strategy.

So even if someone in Microsoft saw the threat of iPhone that company is too big to move nimbly, too bogged down in earlier mode of competing, it had made too many enemies, it has stabbed the back of too many partners and it has scared off too many partners.

Re:Article: It failed to see iPhone and touchscree (4, Interesting)

real-modo (1460457) | more than 2 years ago | (#40706419)

Microsoft's problem is exactly that it has bought into this "threat of the iPhone" meme.

Microsoft and Apple have different markets and different sales channels. By trying to compete with Apple, Microsoft is exchanging a position of dominance in enterprise "productivity" computing for one of abject weakness in consumer/mobile/fashion computing. In so doing, it is alienating its partners and customers even more than usually.

Sure, enterprise computing is a mature market, and it's not possible to continue double-digit growth in it any more. Big deal. Are electricity utilities reinventing themselves as iOS app developers? No; they are making good money in a static to declining market. That's the mature, high-return, low-risk strategy.

Microsoft needs to ignore Apple; if it doesn't, lawyers will be getting fat off aggrieved shareholders.

Just wait (0)

morian97 (1325925) | more than 2 years ago | (#40705933)

till the Metro comes out.

What does it take to finally fucking fire Ballmer? (0)

WiiVault (1039946) | more than 2 years ago | (#40705955)

Love MS or hate them this guy must be either the best guy to work with imaginable, or he has some dirt on the board. I just can't comprehend how else he has be allowed to do so much damage, and put MS behind so many rivals who nobody ever thought would ever actually be worth more on paper than the mighty MS. As a shareholder he needs to be buried, and MS needs to admit his tenure was a mistake and work to make amends for the damage he has done to the brand, the value, and yes even the innovation he seems bent on extinguishing with his every breath. Competitors must love him though.

They still lost money (1)

theurge14 (820596) | more than 2 years ago | (#40705967)

Write off or not the fact is they still lost billions of dollars. And that was due to a very bad business decision.

Troll title (0)

Anonymous Coward | more than 2 years ago | (#40705997)

As others have already said ten times over, they beat earnings expectations. The "loss" is just from a one-time charge due to a bad acquisition. This submission could have been worded better, unless its purpose was to troll.

haw haw haw (0)

davydagger (2566757) | more than 2 years ago | (#40706015)

As much as I try to never loose my composure.

The only thing I can think of is "haw haw haw". Eat it microsoft.

I hope they loose more and more money. I hope Steve Ballmer gets mad enough throw another chair.

In related news (1)

gmuslera (3436) | more than 2 years ago | (#40706139)

religions all around the world today had a flock of new believers

A whole lot of "not a big deal" posts (1)

Grayhand (2610049) | more than 2 years ago | (#40706235)

Obviously it's not going to sink the company but it's showing a lot of poor judgement. 6 billion is hardly the chump change most are claiming. How many years did it take for the gaming division to even show a total of 6 billion in profits? The first ten years they seemed unstoppable but the last ten years they seem to be the game that can't shoot straight. The company just feels chaotic like they have no long term plans. I don't like Apple but it still feels like they know their product line for the next 5 years and maybe even have a road map for 10 years.

Tablets are the future (0)

Anonymous Coward | more than 2 years ago | (#40706261)

Leading edge is what it is about. Create secure sandbox on the cloud for enterprise to use on VPN. Put it on a tablet and watch the benefits grow!

The demise of MS is far away. (1)

TheInternetGuy (2006682) | more than 2 years ago | (#40706267)

I realize that this loss is in no way indicative of MS's demise.
But it still had me thinking about what will happen the day that there is nothing left to do for MS except patent litigation. That won't be pretty.

Tin foil hats kids!! (not aluminum) (0, Flamebait)

Mabhatter (126906) | more than 2 years ago | (#40706425)

I'm breaking out the tin foil here.

Microsoft sat on this bad investment for 5 years? They reaeased their first ever loss the quarter before the election.

I'm calling it now. In three weeks nobody will remember WHY Microsoft had a loss, just that in 2012 "Obama" had dragged the economy down so far, even MICROSOFT was effected! This will stand in the history books for decades.

You'll hear the rally for Republicans tomorrow morning... DEMOCRATS RUINED MICROSOFT! Count on it. Then queue renewed call for anti piracy measures, renewed call for cheaper workers... Blah, blah, blah.

Thoughts?

Re:Tin foil hats kids!! (not aluminum) (2)

Mabhatter (126906) | more than 2 years ago | (#40706439)

This will also help Ballmer say Windows 8 "saved the company" with their first profitable quarter after terrible, terrible losses.

It's all marketing.

Finally (1, Offtopic)

TheGoodNamesWereGone (1844118) | more than 2 years ago | (#40706427)

OS/2 is finally winning!
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