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Financials Indicate Microsoft Prepping for War

Zonk posted more than 7 years ago | from the man-the-trenches dept.

349

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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Spot the dinosaur (5, Informative)

Anonymous Coward | more than 7 years ago | (#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 products for free.”

IMAGE [economist.com]

There are signs that Microsoft is feeling the pressure. In recent days the firm said that it would have to delay the introduction of both the next version of Windows, called Vista, and the next version of Office until early 2007. It also announced yet another re-organisation of its Windows division.

In an effort to respond to the new world it faces, Microsoft had already undergone a thorough management restructuring last autumn. Its seven business units were recast under three presidents, all of whom hail from the business side, not the technical one. Oversight of the sprawling Windows division was bundled alongside its internet unit, MSN, an admission of the importance that online services will play in operating systems in future.

At the same time, a relative outsider, Ray Ozzie, a veteran techie brought in last year, has created a stir by questioning why the most successful recent tech products, from Google search to the BlackBerry and the iPod, were not created by Microsoft. His remit is to see that the company reorients itself by adding an online component into virtually all its products. The first steps in that direction are “Windows Live” and “Office Live”. Microsoft, in short, wants to turn the rise of online software into an opportunity rather than a threat. “Before, we sold a cardboard box with a disk in it. We’re now in a world where it is easier for us to sell add-ons,” says Charles Fitzgerald, a Microsoft executive.

Fortunately, Microsoft already has within the firm units that have demonstrated the agility and online awareness that the whole company now needs. The Xbox gaming unit boasts more than 2m paying subscribers for its Xbox Live service—which allows users to download games and entertainment and chat—and is the model for Windows Live and Office Live. Meanwhile MSN has captured a small share of the roughly $10 billion online advertising market. But the anchor products of Windows and Office, which in effect subsidise these ventures, have not evolved to reflect the new online era.

So Microsoft now plans to graft subscriptions, downloadable add-ons and advertisements on to its core products. Again, it portrays this as an opportunity to open up new revenue streams, rather than a defensive tactic. “There are three ways to pay for anything in this business: ads, transactions and subscriptions,” says Craig Mundie, one of Microsoft’s chief technology officers. “You’ll see the company offer a full range of different ways to buy our product.” The difficulty will be getting the timing right, so that new products do not undermine existing cash cows.

For now, however, too many Microsoft managers are still measured by their success with yesterday’s business model—selling boxes of software. Microsoft is still formulating its response to the rise of online software. As one former Microsoft executive explains: the company’s problems are not just technical but organisational. “It has a vision but not a roadmap; it can see the peaks but doesn’t know how to cross the foothills to get there.”
 
::: yfnET

Re:Spot the dinosaur (1, Insightful)

Mr. Underbridge (666784) | more than 7 years ago | (#15223207)

FTA:"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 products for free."

What, like Netscape?

Re:Spot the dinosaur (4, Informative)

Daniel_Staal (609844) | more than 7 years ago | (#15223291)

Netscape was selling products when Microsoft came along. They didn't start giving away their browser until Microsoft was giving theirs away.

Re:Spot the dinosaur (1, Insightful)

Gunzour (79584) | more than 7 years ago | (#15223344)

Netscape was always a free download to anyone who knew where to look.

Windows monopoly is secure (3, Interesting)

jimmyhat3939 (931746) | more than 7 years ago | (#15223319)

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 pieces of software to work right together. OpenOffice pops up random dialog boxes when you try to save to a file share, Flash doesn't really work right on Linux under Firefox, Evolution doesn't like having its email repository stored on a share, etc, etc.

Then there are the user interface difficulties. Windows and OSX are the only 2 OSes I'm aware of where companies actually have done meaningful user testing to verify what works and what doesn't. Gnome and KDE are nice window managers, but they're just not set up right for office tasks. Sure I can sit around and change everything from the icons' sizes to the taskbar size, but who wants to spend days configuring their computer like that?

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.

As for this perceived threat from webapps, I don't think Microsoft should be worried at all. Even the mighty Google knows that trying to reimplement MS Office using Ajax would be an absolute disaster. And, think about it. How would I make my scanner scan files into Word? Does Javascript have an Ajax routine "useScanner()"? How about if I want to fax something to someone?

Personally, I dislike Microsoft's monopolist tactics. But, I have to admit, Windows is a better office OS than Linux (Gnome or KDE), and it's not even close. It's just that simple.

Re:Windows monopoly is secure (2, Interesting)

jimmyhat3939 (931746) | more than 7 years ago | (#15223488)

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 (5, Insightful)

MightyMartian (840721) | more than 7 years ago | (#15223554)

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 (1)

madcow_bg (969477) | more than 7 years ago | (#15223565)

Do you really need all this stuff? Shares on fat32 partitions? I bet on it... We'll see when EU court says MS is to disclose its specs for Samba and other intentionally broken stuff.


But ... really? I use Gnome and I think it is super. Well, now I type in Windoze because I play games;)


So ... really? Exactly HOW MANY people you know will notice these problems? If you feel like paying 200$ to M$ for the same ol' software with its theme changed, go ahead. But for the rest ... just try SuSE and smell the rozes;).

Re:Spot the dinosaur (1)

Illbay (700081) | more than 7 years ago | (#15223367)

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.

Re:Spot the dinosaur (1)

jimmyhat3939 (931746) | more than 7 years ago | (#15223378)

That's actually false. It's about 50-50 between Windows and Office. I used to think the same thing until I read through MS's annual report and 10-K one year.

Re:Spot the dinosaur-NOT YET (1)

Nom du Keyboard (633989) | more than 7 years ago | (#15223406)

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 immutable print, when I look back after a year I'd like to see that some of it has really and significantly happened. Until then, I don't take these predictions very seriously, since they always seem to assume that the world won't change significantly, and Microsoft won't alter their behavior -- neither of which can be relied on.

WRONG-O, DING-O DONG-O (0)

Anonymous Coward | more than 7 years ago | (#15223441)

March 2006 isn't May 2007, 11 isn't 1, and "months" isn't "month."

Vista (5, Insightful)

JediLow (831100) | more than 7 years ago | (#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 (5, Funny)

Anonymous Coward | more than 7 years ago | (#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 (2, Insightful)

guice (907163) | more than 7 years ago | (#15223195)

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.

Re:Vista (0)

Anonymous Coward | more than 7 years ago | (#15223328)

Posting AC to protect my source and me.

I am very close to a person who works at Microsoft. This person told me about this about 4 weeks ago. I was told to pay attention to the online landscape because it was going to change significantly when Microsoft makes its move.

This person is also not some mouthpiece, they gave me a little insight into what was coming up and I have changed my (small) businesses online plan to reflect it. This is not a joke, they are going after Google HARDCORE.

Re:Vista (1)

stanmann (602645) | more than 7 years ago | (#15223421)

Well thats a mistake, since they are still backing SCOX against IBM, and we all know how 2 front wars end.

Re:Vista (1)

MindKata (957167) | more than 7 years ago | (#15223465)

It could be they are building up to push other projects at the same time as having a high profile launch of Vista. That way, their other projects benefit from the higher profile of Microsoft in the press etc..

Re:Vista (1)

hackstraw (262471) | more than 7 years ago | (#15223504)

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 (3, Funny)

nizo (81281) | more than 7 years ago | (#15223088)

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?

Re:Maybe they gave up the battle (1)

lixee (863589) | more than 7 years ago | (#15223253)

Mr. Stahlman talking about M$'s investements? Something doesn't feel right.

Can I Do This? (1)

MudButt (853616) | more than 7 years ago | (#15223097)

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

Re:Can I Do This? (1)

gstoddart (321705) | more than 7 years ago | (#15223427)

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.

Need login? bugmenot is your friend (2, Informative)

whoever57 (658626) | more than 7 years ago | (#15223100)

Mods? parent is not a troll (1)

LunaticTippy (872397) | more than 7 years ago | (#15223228)

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.

No no no - wrong conclusion (2, Interesting)

plankrwf (929870) | more than 7 years ago | (#15223103)

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 (3, Interesting)

truthsearch (249536) | more than 7 years ago | (#15223153)

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.

Microsoft is betting on online services (4, Insightful)

Gunzour (79584) | more than 7 years ago | (#15223106)

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.

Re:Microsoft is betting on online services (2, Interesting)

truthsearch (249536) | more than 7 years ago | (#15223208)

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.

Re:Microsoft is betting on online services (1)

susano_otter (123650) | more than 7 years ago | (#15223320)

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.

Re:Microsoft is betting on online services (1)

JustNiz (692889) | more than 7 years ago | (#15223553)

>> or brought vast wealth to its principals.

Its just a shame they haven't brought principles to their vast wealth.

Xbox 360? (1)

nutshell42 (557890) | more than 7 years ago | (#15223107)

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.

"Yes, there are weapons of Mass Destruction..." (1)

wothbora (927556) | more than 7 years ago | (#15223109)

Oh yeah, abso-freaken-lutely, we have a product that is going to change the world. Everyone will bow in awe of our power and bug-less software and wonder how in the heck they survived so long without our new product...

So who was running it when it wasn't Bill? (0)

Anonymous Coward | more than 7 years ago | (#15223112)

Same old, same old. vaporware and fud and threats to keep people afraid to switch away.

They are already losing this war (5, Interesting)

chriss (26574) | more than 7 years ago | (#15223117)

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.

Re:They are already losing this war (2, Insightful)

just_another_sean (919159) | more than 7 years ago | (#15223219)

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 this "default page" strategy will attract at least some portion of advertisers. If nothing else I could see a lot of them investing in all three (google, yahoo and msn).

Right now (or last I checked anyway) the MSN portal page is the default home page for IE. If MS decides to make their new search page the default in IE7 then that may attract some attention. So I would look for an uptake in MS search based advertising when Vista is released... sometime around or after 2010 that is. :-)

Re:They are already losing this war (2, Insightful)

chriss (26574) | more than 7 years ago | (#15223317)

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 much easier to type www.google.com into IE than to download and install software, so I guess the advantage in comfort does not apply here as heavily. I know a number of people who use Firefox as their standard browser, but search not by entering the search term in the field in in Firefox, but call Google manually first. I'm always astonished about that, but they don't seem to mind. Calling an URL is sufficiently low tech to be handled by the majority.

Re:They are already losing this war (1)

zoomzit (860737) | more than 7 years ago | (#15223304)

I think it's idle speculation to say that just because Microsoft's expenses are going up, it means that they are ramping up for battle with Google. However... it is interesting to note that on the same day this article comes out, Microsoft stock drops 11%, while Google stock stays flat. It seems that Wall Street is wagering that Microsoft will lose this war.

Re:They are already losing this war (1)

chriss (26574) | more than 7 years ago | (#15223374)

However... it is interesting to note that on the same day this article comes out, Microsoft stock drops 11%, while Google stock stays flat. It seems that Wall Street is wagering that Microsoft will lose this war.

No, they also reported quarterly revenues and the analysts where disappointed. There were some announcements about a strategic shift toward web services and reports of more losses in the entertainment and home area. Only the business software is where it should be, and many people expect that adaptation of Vista will not be as huge as Microsoft hopes, so basically all areas where Microsoft tried to diversify lose money and their cash cow is in danger. A good reason for a stock drop. It's not all about fighting Google.

Re:They are already losing this war (1)

zoomzit (860737) | more than 7 years ago | (#15223484)

I see what you are saying, but it still relates to Google. Ultimately, Microsoft isn't doing as well as expected because their costs are higher than expected. For the most part, Microsoft isn't exactly saying what these additional expenses are, but a few articles have assumes that they are amassing a war chest.

However, having high costs that leads to lower profits alone isn't necessarily a bad thing from an investors point of view, as long as the additional short term costs lead to substantial long term profits .

If this whole "war chest" idea was a good one from Wall Street's perspective, they would have rewarded Microsoft (or at least not hurt them as bad). But, Microsoft got hammered. Wall Street doesn't like what Microsoft is doing. They don't like lower profits, but they really don't like higher costs that may not help profitablity in the long run.

Far from it (0)

Anonymous Coward | more than 7 years ago | (#15223329)

They'll make IE7 good enough and integrate search into their desktop. The default web search will not be Google or Yahoo, but will be Microsoft Live. It will be difficult to replace and most people won't, turning their 90% desktop monopoly into a 90% search monopoly. Ads can be figured out later. They don't have to be particularly good if they have 90% of the eyeballs because that's the important metric anyway.

They'll do the same thing with the Web 2.0 stuff. It will only work properly on IE7. You can already see this starting with their email services that degrade Firefox to backwards compatability mode (as if Firefox were still catching up to IE6, HAH). Expect this behavior across their Live product line.

Re:They are already losing this war (2, Insightful)

Excelsior (164338) | more than 7 years ago | (#15223516)

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 (well, actually the similar Google Toolbar) to start a search.

And I think that Google knows it, too. Right at this moment, the Google homepage shows an advertisement for Firefox right on their home page! (only visible for non-Firefox users) And Google Pack [google.com] includes Firefox. Yes, Google knows that Microsoft wants to leverage their monopoly by using IE 7 to drive searches to MSN Search, and Google must do everything they can to prevent it from happening.

Re:They are already losing this war (2, Interesting)

CaymanIslandCarpedie (868408) | more than 7 years ago | (#15223571)

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.

How? (2)

reldruH (956292) | more than 7 years ago | (#15223120)

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.

Re:How? (1)

flyingsquid (813711) | more than 7 years ago | (#15223496)

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 (2, Insightful)

t0qer (230538) | more than 7 years ago | (#15223127)

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.

Re:Microsoft started the battle long ago (1)

douggmc (571729) | more than 7 years ago | (#15223325)

"IE7 they're starting to get a little better supporting stuff like AJAX..."

Supporting? Dude ... didn't Microsoft invent the concept of Asynchronous Javascript and XML with there XMLHTTP / XMLHttpRequest?

Google? wtf? (3, Insightful)

moochfish (822730) | more than 7 years ago | (#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 (5, Funny)

digitaldc (879047) | more than 7 years ago | (#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]

Re:Bill is Back, Productivity Soars (1)

Hawthorne01 (575586) | more than 7 years ago | (#15223270)

Which implies that Steve Ballmer just isn't a wartime consiglieri.

Re:Bill is Back, Productivity Soars (1)

roman_mir (125474) | more than 7 years ago | (#15223353)

Which implies that Steve Ballmer just isn't a wartime consiglieri. - Ballmer was never a 'consiglieri' in the first place. He is just a placeholder, a space-occupying entity, but not a leader of any sort. Any interview this guy gives is painful to watch, it seems like he is always in an uncomfortable situation (back of a VW beetle?) I don't think he understand how to run a giant like MS, it's too big for him to handle, it doesn't fit into his framework of understanding. A company like that, with those kinds of assets and that many people, it's mind boggling and Steve's mind is boggling.

Re:Bill is Back, Productivity Soars (1)

Strudelkugel (594414) | more than 7 years ago | (#15223315)


'It's pretty clear that Bill is running the company again,'

Then what is Ballmer doing in the CEO slot?

While the guy has produced some of the best videos on the net ;-) , I don't see what he has done for Microsoft. I still suspect institutional investors are going to be pushing for changes given the lackluster stock performance, let alone after the recent hit to the stock price.

How long until the "Ballmer announces retirement" headline appears?

Awesome (1, Interesting)

HeavensBlade23 (946140) | more than 7 years ago | (#15223135)

I fully expect this to get moderated down, but this is great news. Increased competition is almost universally good for consumers. Now, all we have to do is persuade Google to release an OS and an office suite to compete with MS on *their* home turf.

Google's market share (3, Insightful)

MCSEBear (907831) | more than 7 years ago | (#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.

Re:Google's market share (1)

truthsearch (249536) | more than 7 years ago | (#15223233)

Microsoft can't dominate every market it enters.

Microsoft has never dominated any market but desktops and "office productivity" applications. And they entered those markets decades ago.

Re:Google's market share (1)

AKAImBatman (238306) | more than 7 years ago | (#15223276)

You forgot BASIC. Microsoft dominated the BASIC market all throughout the 80's. How that will help them in 2006 is anybody's guess, but they did dominate BASIC.

And in our business news... (1)

GillBates0 (664202) | more than 7 years ago | (#15223143)

...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 (2, Insightful)

CastrTroy (595695) | more than 7 years ago | (#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.

War Cry (5, Funny)

AKAImBatman (238306) | more than 7 years ago | (#15223154)

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 (3, Interesting)

erroneus (253617) | more than 7 years ago | (#15223164)

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.

Re:More expenses? I have a couple of guesses (1)

PepeGSay (847429) | more than 7 years ago | (#15223497)

Number 1 could be a good thing since they are in the group pushing net neutrality.

Good. (1)

floorpie (20816) | more than 7 years ago | (#15223165)

As much as MS is considered evil, this is a GOOD thing. We've been pooh-poohing MS on their inability to innovate, and how they've been resting on their laurels since Ballmer took over as CEO (yeah yeah, some of you might say since Gates took over...). Now, if they can actually "get in the game," spend money on actual R&D, they can actually compete with the likes of Google -- hence, we all win -- software devs AND end users. Competition is good for customers with better products. Competition is also good cuz it makes us software developers more in demand.

Exciting times. Exciting times.

Dear Microsoft stockholders (-1, Redundant)

Anonymous Coward | more than 7 years ago | (#15223168)

Dear Microsoft stockholders,

In the battle between Microsoft and the rest of the world, it would be wise to back the rest of the world.

Sincerely,

Common sense

I for one welcome our Microsoft overlords (2, Funny)

Enrique1218 (603187) | more than 7 years ago | (#15223171)

Oh wait... They already are our overlords and they suck at it. Oh, nevermind!!!

Apple will win. (0)

Anonymous Coward | more than 7 years ago | (#15223173)

Apple owns the new generation of users and now they make the fastest Windows PC. Buying a has always been the best value but now it can run legacy windows software, too.

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

postbigbang (761081) | more than 7 years ago | (#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.

You're guessing too much (1)

suv4x4 (956391) | more than 7 years ago | (#15223181)

They have Vista to push and advertise next year, or is that not important anymore.

Offsetting profits (1)

truthsearch (249536) | more than 7 years ago | (#15223186)

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 (3, Interesting)

Anonymous Coward | more than 7 years ago | (#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.

Steve Ballmer At War (0)

Anonymous Coward | more than 7 years ago | (#15223206)

Just trying to imagine Ballmers internal speech to prepear for 'the war' :-D

Re:Steve Ballmer At War (1)

WilliamSChips (793741) | more than 7 years ago | (#15223362)

Soldiers! Soldiers! Soldiers! Soldiers! Soldiers! Soldiers! Soldiers! Soldiers! Soldiers! Soldiers! Soldiers! Soldiers! Soldiers! Soldiers! Soldiers! Soldiers! Soldiers! Soldiers! Soldiers! Soldiers! Soldiers! Soldiers! Soldiers! Soldiers!
Your comment violated the "postercomment" compression filter. Try less whitespace and/or less repetition. Comment aborted.

Great (-1, Redundant)

Anonymous Coward | more than 7 years ago | (#15223215)

I, for one, welcome our new Microsoft warlords.

Cue "Ride of the Valkyries" (3, Funny)

spun (1352) | more than 7 years ago | (#15223241)

And Ballmer shouting, "I love the smell of Vista in the morning. It smells like victory."

Re:Cue "Ride of the Valkyries" (1)

EnsilZah (575600) | more than 7 years ago | (#15223535)

I find the image of a sweaty Ballmer saying "The horror! the horror!" much more believeable.

This is stupid (4, Insightful)

XMilkProject (935232) | more than 7 years ago | (#15223250)

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.

Re:This is stupid (1)

vertinox (846076) | more than 7 years ago | (#15223448)

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! ;)

Marketing $ not war $ (0)

Anonymous Coward | more than 7 years ago | (#15223309)

Might they be getting an ok to market in China next year?

Google OS (0, Flamebait)

zymano (581466) | more than 7 years ago | (#15223322)

Where is it? It would be nice if they pushed another OS on their site to beat out MS.

Linux and the BSDs' are too complicated and fractured by a million distributions and has driver problems.

Intersting effect on the stock too... (3, Informative)

Mr. Flibble (12943) | more than 7 years ago | (#15223338)

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?

Re:Intersting effect on the stock too... (1)

JustNiz (692889) | more than 7 years ago | (#15223480)

>> 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.

They are going to cut off Google's air supply (1, Troll)

NatteringNabob (829042) | more than 7 years ago | (#15223381)

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.

War on Google? (1)

oaklybonn (600250) | more than 7 years ago | (#15223392)

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...

Re:War on Google? (1)

robertjw (728654) | more than 7 years ago | (#15223540)

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.

When asked... (1)

TheBigTBird (796903) | more than 7 years ago | (#15223440)

When asked what was best in life, Ballmer responded...
 
  "To crush your enemies, see them driven before you, and to hear the lamentation of the women!"

before the Justice Department's antitrust lawsuit (1)

edxwelch (600979) | more than 7 years ago | (#15223444)

"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"

You realise of coarse the last lawsuit was only holding for 5 years, which means Microsoft has free reign to do whatever it wants since the start of this year
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