Laura’s Insights ITIC Blog

It’s been a busy summer for Microsoft and chief executive Steve Ballmer.

In recent weeks, the software giant; released customer previews and ship dates for the newest versions of its flagship Windows and Office products; purchased Yammer, a cloud-based enterprise social networking company; hosted its annual Worldwide Partners Conference (WPC) in Toronto, and; vocally signaled its intent to leave no stone unturned in competing head-on with rivals Apple and Google.

Sounds good, right? Unfortunately all of these positive moves are overshadowed by three things:

• Microsoft reported the first quarterly loss in its 26 years of being traded as a public company. Slipping into the red for the first time in nearly three decades, Microsoft has reported a loss of $492 million in the June quarter. Most worrisome is the reason for the loss. Microsoft took a non-cash write-down of $6.2 billion related to non-performance of online advertising business and Internet services division, aQuantive, which Microsoft acquired in 2007. On a positive note, revenue for the fourth fiscal 2012 quarter rose four percent to $18.05 billion, compared to the $17.36 billion sales Microsoft posted in the same period a year ago.
• A scathing profile, titled “Microsoft’s Lost Decade” in the current issue of Vanity Fair magazine by contributing Editor Kurt Eichenwald. In it, Eichenwald makes a case that Microsoft has spent the last ten years unsuccessfully dithering in several key market segments including smart phones, search engine, social networking, mobility and tablets, falling far behind competitors like Apple and Google.
• Windows 8 is being dubbed as a “disaster” three months in some quarters before its scheduled October ship date.

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Microsoft: Bullish or Bottoming Out? Part 1Read More »