Got Ads?
1/25/2007
  Woeful Q4 For Microsoft

Not that you'd know reading the Microsoft earnings release, but MSFT had a weak quarter, posting it's lowest growth Q4 in ten years (according to GigaOM).

Profit in Q4 declined to $2.6B from $3.6B in Q4 2005.

MSFT was quick to blame Vista slippage, and point to deferral of $1.6B(!) in revenue as the reason for the weak quarter. Be that as it may, Microsoft has a few key structural issues - namely their businesses besides Windows, Servers and Office:

Those are supposed to be the growth areas. At least in the conf calls, they do realize their complete and utter failure up to this point in search.

"On the search side you are correct we lost market share," Microsoft CFO Chris Liddell said in response to an analyst's question on the company's earnings conference call. He said he is "clearly not happy with that."

Not only is search share declining, but revenue per search (RPS) has GONE DOWN from what they used to get with Overture! In other words, their launch of adCenter has resulted in WORSE RPS than Yahoo's old Overture system. That's bad, especially since Yahoo has moved on to Panama, and expects improvements in RPS this year.

Microsoft's plight makes Yahoo look like Google in comparison...

Despite all the talk about "long-term investment", Microsoft has lost in search. They will never catch up. Google understood this phenomenon with YouTube, realizing they had to buy it, because Google Video would never be able to catch it with traffic growth. Search may not be as social or viral as YouTube, but it is self-reinforcing enough that with a 10% to 60% share difference Microsoft won't catch Google. BTW, search isn't over, but I am saying Microsoft has lost.

Seriously, if you ever want to be depressed about the nature of giant tech companies, just go read MiniMSFT and MSFTextrememakeover, both are insider blogs.

MiniMSFT covers the HR issues and management debacles, while MSFTextrememakeover is a bit more financial oriented - for example, you'll learn how Microsoft has lost around $5B on Xbox over the years..

Depressing.

Labels: , ,

 


Links to this post:

Create a Link



<< Home

Subscribe to GotAds?



Links



Recent Posts

Woeful Q4 For Microsoft


Archives

February 2005 /  March 2005 /  April 2005 /  May 2005 /  June 2005 /  July 2005 /  August 2005 /  September 2005 /  October 2005 /  November 2005 /  December 2005 /  January 2006 /  February 2006 /  March 2006 /  April 2006 /  May 2006 /  June 2006 /  July 2006 /  August 2006 /  September 2006 /  October 2006 /  November 2006 /  December 2006 /  January 2007 /  February 2007 /  March 2007 /  April 2007 /  May 2007 /  June 2007 /  July 2007 /  August 2007 /  September 2007 /  October 2007 /  November 2007 /  December 2007 /  January 2008 /  February 2008 /  March 2008 /  April 2008 /  May 2008 /  June 2008 /  July 2008 /  August 2008 /  September 2008 /  November 2008 /  December 2008 /  January 2009 /  March 2009 /