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MS ActiveTank™

It's not just the recession.

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REDMOND (Rixstep) -- Microsoft are tanking. They've had the first really bad result sheet since 1986. They've previously insisted they were going to pick up momentum again and the recession was doing to drive customers back from Apple and Open Sauce solutions to their fold. But Apple are doing very well, thank you. So there's only one possible explanation.

Those Famous Ballmer Quotes

Notorious monkey on crack Steve Ballmer has certainly put his foot in it (and his fist in it) before but the following quote may go to history as one of his most momentous ever.

Apple gained about one point but now I think the tide has really turned back the other direction. The economy is helpful. Paying an extra $500 for a computer in this environment - same piece of hardware - paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be.
 - Steve Ballmer CEO Microsoft Corporation

But it didn't work out that way. They immediately laid off 1,400 employees and have plans to lay off perhaps another five thousand or more. Their abortive ad campaigns designed to improve their image have accomplished less than nothing - all they've done is make the former Redmond behemoth look more ridiculous than ever.

And now they're supposedly in talks with Yahoo again.

No Buybacks

Microsoft have supposedly been involved in buying back their own shares - a gesture from within the corporation of their confidence in their own future and growth. Back in September last year the board authorised a $40 billion five year repurchase program. Said CFO Chris Liddel at the times:

These announcements illustrate our confidence in the long-term growth of the company and our commitment to returning capital to our shareholders.
 - Chris Liddell CFO Microsoft Corporation

So how much have Microsoft spent on buybacks so far? Nothing. What does Liddell say now?

It's generally environmental. We'd be generally more cautious in this current environment in terms of building our cash reserves. We have built cash and investments back over $25 billion. We're still committed to repaying cash as much as possible, but it is going to vary quarter by quarter, and is going to depend enormously on the environment we find ourselves in, and things like our working capital management as well.
 - Chris Liddell CFO Microsoft Corporation

Paid Content's translation: don't look for Microsoft to buy back stock this quarter either.

As Bad as It Gets

So how bad are Microsoft bleeding?

  • Online services. Sales drop 14%. Losses more than double to $575 million. Ad revenues drop 16%.
  • Entertainment and devices. Sales drop 2%. Losses now at $31 million compared to $106 in profit one year ago. Most of this loss due to decreased sales of Microsoft software for Apple computers.
  • Office, Windows business divisions. Sales and profits drop.

MS ActiveTank™, Microsoft Windows™, and Microsoft Office™ are trademarks exclusive of Microsoft Corporation because no one else wants them.

See Also
Washington Post: Microsoft First Ever Drop in Revenue
Paid Content: Microsoft Cut Share Repurchases to Zero

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