Microsoft posts first quarterly loss in company history - Page 3

Joint licensing +MS had to buy 150 million in stock and agree to make Office for at least 5 years.

 

How were they not over a barrel?

Again, out of 3 HW products by Apple only the Zune from MS could be compared to an Apple product. So how exactly did Apple have a response to creating the iPod when it predates the Zune but over half a decade?

technically you can look at it that way. But I think the point he was trying to make was that the overdrawn bank account analogy just doesn't work that well in this case.

I look at it this way:

Say you have $1M in the bank, and you own (completely paid off) a house valued at $1M
The next year, you earned $500k, so that's $1.5M in the bank, but the housing market crashed, so you value your house at 1cent.

Your net worth went from $2M to $1.5M, so it looks like a 500k loss.
However, you actually have more money in the bank, and still a pretty nice house to live in... even if it is only worth 1cent.

MS isn't losing 400M in cash. They actually made 5Bish. They're just saying one of their 'houses' is only worth 1cent instead of 6.2B.

I love Mitchell and Webb. The snooker commentary is classic.

 

"And that's a bad miss" and Webb spoons sugar into his lager.

 

AI. Sloppy sentences. Sloppy "journalism". Why do I even read it? Oh, yeah, to enjoy the commenting ;)

 

"somewhat", definition: "most of the market". Example: "iPhone enjoys somewhat of a presence in high-end smartphone market, and iPad enjoys somewhat of a presence in tablet market"

"nascent", definition: "the decade before the last five years, or any long period of time followed by a short one, of interest to the writer" Example: "Men walked or rode horses during the nascent pre-airplane stage"

I understood the concept, which is quite simple. They still paid for the house, and if you downstream far enough actual money is involved, so money is lost somewhere, and in this case lots of it, unless someone gifted Microsoft a 6 billion dollar asset. I assume MS has made huge investments before and they probably didnt pay off as well too, but this is the first time they have ever reported a loss, which is very historic!

Maybe it is just me, but I would love a fridge that could automatically toast frozen bread...  However a tablet with a keyboard just seems silly.

 

Just because they did it all at once...

 

Normally when you write something off, you do this over a certain period. If they had written it off in 5 years this would have meant they had to write off 310mln each quarter. As the net profit this quarter was 6.7billion, with a 5 year write-off this would have been 6.4 billion profit this quarter (Which is up from 5.9billion same quarter last year).

 

To quote engadget : "Even with the aQuantive related hit, Redmond still managed to post a net income of $16.98 billion for the year.". The next quarter (if it's the same, which it won't be) will see a 6+ billion net profit again as there is no sign of a significant decline. So the next year should probably see a 24 billion net income for the year... This not even taking into account the revenue actually increased and the introduction of windows 8 (desktop, tablets and smartphones) will probably see this trend continue if you like it or not.

 

So no, MS is not doomed (and neither is Apple ;). They are both doing quite well.

 

Just my 2 ct's worth

 

You're over a barrel when you're already facing the government who is accusing you of abusing a monopoly position in the market place.

 

And at the rate Apple was burning money, that $150million wouldn't have made any difference at all. What Jobs wanted (and got) was time to get his house in order. He needed Office to keep the Mac platform viable. Now? I'm not so sure.

Then why would they write it all off like this at once and face all this negative publicity if the company were headed in the right direction?

MS stock was up over 2% in after hours trading.

 

The loss isn't really that important. Without the charge then MS would have had one of their most successful quarters on record.

 

No, the loss isn't important, but the reasons behind it don't bode well. They point to a management that sees the tides of change far too late, and then makes huge mistakes as they panic to change direction.

 

 

Would you like a tooth pulled in one quick tug, or would you prefer to have it drawn out slowly over several months?

 

Because the time (sentiment) was right to do it know, instead of next quarter (which might see a decline as the last quarter before the windows 8 launch), and the quarter after that (the win8 launch).

Part of the problem is the upcoming Windows 8. I say, change it to Windows 11. That's one better than OS X.

 

lol, sure. Microsoft will go out of business... ha. Not in any of our life times. Microsoft is bigger than the auto industry which was bailed out by our goverment a few years back. Even if Microsoft wanted to go out of business, they would not be allowed too. Do you even realize just how important Microsoft is to the world. you may not like them, but banks, goverment agencies, wall street, etc, etc, are all running M$ products to control their industires. foolish statement.

 

Y'know, I think that could be true. I don't think they'd be allowed to fail.

 

Wouldn't that need to be Windows XI 11.

Anyone here remember the movie "The Sixth Day"? There was a clip in the police station and the news on the TV talking about Microsoft getting so rich and powerfull that they are buying a US state? Back then everyone though MS is untouchable.. No one thought it will be run by an idiot who don't know what the hell he is doing and will burn it to the ground in the process.

It's not a structural loss though right? Just writing off a bad purchase. I'm sure Win 8 will give them a boost.

I believe that they did so in the early 90's, but I don't remember - and don't really care to check. They certainly haven't done so for at least 15 years.

The point is that someone likened it to bank account - which is entirely different. Bank accounts work under cash accounting. Business acquisitions work differently - accrual accounting. You can't really compare the two - and a smart company will closely monitor both.

The importance is that people are using Microsoft's loss as a sign that Microsoft is failing. While that might or might not be true (I think it IS clear that their glory days of dominance have been over for some time), it is misguided. Using a write-off for an event that occurred 5 years ago as evidence that they're failing today is just plain wrong.

It's not that simple. There are rules about assets and write-offs. In short, you normally write down an asset during the period that you realize that it's value has declined significantly. Your balance sheet is expected to be a fair and accurate statement of the assets and liabilities of your company and as soon as you realize an asset is worth less than its stated value, you should be writing it down. It's a little surprising that they spent $6 B five years ago and just now realized that the investment was almost worthless Perhaps it took them five years to realize that they bought a pig in a poke and there's no real value.

That's not uncommon. Wall Street understands the difference between cash accounting and accrual accounting. From a cash perspective, it was an OK quarter. The accrual cleans up the balance sheet and gets rid of dead wood - which is a good thing. Now, if it were to become a more regular occurrence, that view might change, but given how stagnant Microsoft's stock has been for a long time, that's already reflected in the share price.

Hopefully the first of many!  Microsoft is one of the evilest most horrible companies the world has ever seen.  No single company has done more to cripple innovation and limit choice than Microsoft.

There is nothing to displace Microsoft in the business world. No one is even trying. Apple is not remotely interested in that market. Hell, Apple is not remotely interested in anyone that does actual work on a computer, let alone enterprise market.
 

A write-down doesn't have nerve endings, and the damage was already done, all this is is acknowledging such in the books. How is this comparable?

Not any more. Apple now takes the first spot. No one is doing more to kill the idea of general computing. If Apple get their way kids will grow up without even having an expectation of running custom code on their locked down appliance.

 

This is a problem?

 

Or I'm just not picking up on sarcasm today.  

But Google's doing their best to catch up.

Absolute nonsense.

First, it's the slippery slope argument. Apple has created a line of easy to use appliances, so you assume that the market for full blown computers will disappear. There's no sign of that.

Second, your assertion that Apple's 'locked down appliances' preclude running custom code. That is, of course, wrong. There are hundreds of thousands of apps running custom code on iOS today - and the number is growing rapidly.

Finally, your assertion begs the question of whether a more limited device is inherently bad. I suppose when the first book stores came out, people like you were arguing that they were evil because all the content was already printed and the reader couldn't get the full experience unless they were up to their elbows in typesetting and ink.

How many people use their computers for anything that an iPad can't handle (or, at least, wouldn't be able to handle in a few more generations)? And for the few who can't do their work on an iPad, why can't they continue to use regular computers?

 

If Apple gets it their way, you will first have to pay Apple a cut before you can run your custom code (how much does it cost today before you can run your own custom app on your iPhone or iPad?), or it may become plain impossible to program your computer at all. How often do you run custom code on your other appliances? Exactly. If computers become locked down appliances you won't be able to or expected to run custom code on them either.

 

How many people expect to compile and run stuff on their iPad? None, but it's a perfectly capable machine, more powerful than PCs of the 90s.

It costs $99 a year to be an Apple developer. Less than ideal for a youth, but it's not that bad either.

Up until Android, you generally couldn't run user-generated code on a phone commonly owned by youth. The old Windows phones couldn't be programed using the free or student version of Visual Studio. Other phone development systems generally favored professional users.

Personally, I suggest starting out with Arduino hardware development system. The circuit is $30 and it helps teach hardware and software, how to make circuits.

Raspberry Pi is an ARM computer for $35, intended for education and hobby use. Add an HDMI screen (any TV or monitor these days), mouse and keyboard and it's a reasonably capable network computer.

 

Except it's nothing like being overdrawn. They made money last quarter on record revenue. They spun it to a loss so as to avoid paying less tax by writing down something they bought 5 years ago. Wall St likes this, hence the reaction to it.

 

To use a simplistic analogy, lets say you made $1000 last month, and spent $500, you would have $500 left. You wouldn't suddenly become $100 overdrawn because you threw out the old TV you bought 5 years ago for $600 would you?

I entered "Microsoft BOB interface" into Google Image Search. Guess what! The graphic shown in the article popped up on page 4. 

 

 

Had they split up the writeoff over the past several years, no loss would have been announced ever.

 

Had they decided to write the whole thing off next quarter, no loss would have appeared this quarter.

 

Had they made 8 Billion in other profit this quarter, no loss would have been announced this quarter.

 

It  is an accounting decision.  They lost real money, but the fact that they take the loss all at once, in a quarter with insufficient profits to "cover " it, makes for an announced loss this quarter.

 

 

Companies often do that.  They would rather have one "losing" quarter and get it over with.  My guess is that they don't want any overhang into the future, which would give folks (like the ones here?) the impression of continuous lowered profits.

 

They are taking their lumps all at once.  Future quarters will not be subject to nagging losses from this acquisition - all the losses have already been taken.  It is not at all uncommon for companies to do this.  It is well established in accounting conventions - generally, there are choices as to how to take these writedowns.  

 

 

"Oh Ess What?"

 

--Typical computer user

Ugh!

 

Because most Microsoft news isn't very complimentary to Microsoft.

 

The company has been run by a clown for the past decade, and has earned a reputation for fumbling attempts to follow Apple. They've become the court jester of the industry. 

 

In fact, for most of their existence, with a few (very few) exceptions, they've foisted third-rate products on hapless consumers thanks to their universal licensing racket. 

 

 

Do you do any work with  either of these platforms?

 

I've heard both breathless stories about the greatness of the Strawberry Pi and reviews which indicate that it cannot run video smoothly.  both viewpoints are likely accurate.

 

I've also heard about x86 systems starting at $50.  

 

Do you see any trend towards ultra-cheap ultra-simple stripped-down hardware for general hobbyist use?  Are we entering a new age of computer experimentation by amateurs?  Will these platforms lead to anything in the future?

 

I'd love to hear your thoughts.

Only the ignorant ones. I guess that's why you take that position.

How many people expect to compile and run stuff on their personal PC? An insignificant percentage.

As for the rest (having to pay Apple before you can run your custom code), that's a red herring. The number of people who run custom code is insignificant - and they can all afford the $99 fee to become an Apple developer and have their code added to the iTunes store. There are hundreds of thousands of free apps on the iTunes store - where Apple collects nothing but the $99 developer fee.

So, basically, you're using a combination of red herring and slippery slope arguments to justify your inane position.

Yeah,  good point.  Just like there is no viable alternate for Apple iOS hardware owners than to have Apple OS.  Bummer!!  Like one with a file system!!

Microsoft, the less, the better. Why use the obnoxious Microsoft products when there are great alternatives out there? The day Microsoft goes out of business, humanity will make a giant leap ahead!