This is a very pro-Microsoft spin on their first *ever* quarterly loss as a public company. This is the reason for "Secure Boot"... This is why they were rushing Win8 for October... This is why the new Office was specifically crafted to not work on XP/Vista. Bad move, Microsoft.
Still, I'm always amazed at how they put such a positive spin on negative results. Expect a *huge* advertising blitz for Window 8 over the holiday season, then a lot more Linux/Android lawsuits as the cash dies off three months later.
What part of "Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn" don't you understand?
Uh, no, the results aren't really that negative because it was only brought down by a collection of one time write offs. So doesn't reflect their long term financial outlook.
A good chunk was just because Microsoft wrote off $6.19 billion in so-called good will related to the 2007 purchase of aQuantive that proved to be a bad investment and another large chunk was to one time things like the $540 million of revenue related to the company’s Windows 8 Upgrade Offer, which they may profit from later if Windows 8 does well.
Though the write down does call into question Microsoft’s future in online advertising, which could lead to questions of Bing’s relevance and future.
However, for now the Microsoft’s Windows and Office empires are still more than strong enough to make up for the company’s many other weaknesses in search, online advertising, and possibly smart phones.
What the future holds for them remains to be seen but we've yet to see them hit by any really bad news...
I'm aware they pinned it all on a write-off from a 2007 mistake - I just don't believe it. To say you only ever got <2% of the value out of a $6.3B acquisition smells so funny that I thought it was nitrous oxide.
For years we've been hearing whispers about funny business in Microsoft's accounting practices, and how they make their costs look less via overvalued stock options. It may finally be reaching a tipping point (Though I do think next quarter will look good on Win8 expectations).
Oh well, when the next loss comes - they have 35 other acquisitions they can blame. That's how many competing companies they've bought-out since aQuantive. Hey, maybe we'll see an $8.4B write-down for Skype in five years!
"To say you only ever got <2% of the value out of a $6.3B acquisition smells so funny that I thought it was nitrous oxide."
Not really, MS acquisition of aQuantive was to try to beat Google at its own game and they clearly lost. So that investment clearly did not benefit them as intended.
While most of their other acquisitions had to do mostly with patents and they've already made profit on many of them, and their earnings are still on the rise. If not for the mark down they would have had a 67 cents per share increase. So it doesn't seem likely they will be reporting any other major losses.
Though Skype is one of their investments that has yet to bear any major fruit, along with being an even bigger investment than aQuantive, and there are reports of resistance to it in Europe from Carriers. So we'll see how that goes in another year.
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