Nice boost in their search revenue, if your wondering why Google's CPCs are going down, that is why. Microsoft has gotten serious about exploiting their search engine tech and that is having an effect [1]. Unlike 'recuter' I don't think this is their "Blackberry Moment" :-)
Google is smearing the smartphone market, at the expense of Apple's cash engine, Microsoft is smearing the Search market at the expense of Google's cash engine and Linux is smearing the operating system market at the expense of Microsoft's cash engine. Seems like there is a lot of pressure to diversify.
> Linux is smearing the operating system market at the expense of Microsoft's cash engine
Is this true? I don't see too many Enterprise shops going "no more windows, exchange, and active directory. its ubuntu, postfix, and ldap all the way!"
Linux certainly has killed commercial unixes, but MS Server products never got popular for web and other areas Linux is traditionally strong in. The fabled year of the linux desktop never happened.
MS still leads with many enterprise products. For all the hand-wringing over surface and bing, MS is swimming in money on the enterprise side.
>>Microsoft has gotten serious about exploiting their search engine tech and that is having an effect
If you ask a source like Yahoo who see's real data, you would know thats not true. If Bing is making an impact Yahoo would not be going out of way to avoid Bing.
CPC is down due to lower CPC's on Mobile. Isn't it public knowledge?
> Google is smearing the smartphone market, at the expense of Apple's cash engine
That statement is not borne out by data. Apple’s iPhone revenues and market share have continued to rise since inception. Please remember that Apple was never the biggest phone manufacturer. In the last couple of years, iPhone (and in general, smartphone) growth has mainly come from people switching from feature phones. The rest came at the expense of Symbian, Windows Mobile, and Blackberry. The number of people switching from iPhone to Android is negligible on the whole.
In the last reported quarter by Apple, in which the iPhone offerings were awaiting a refresh, Apple sold 20% more iPhones compared to the same quarter last year. Unit sales reached an all-time high for the June quarter.
Dell has gone private, HP has flat out called them a competitor.
Their online division giving Google some heat is all well and good but that Wintel thing is still their bread and butter - alienating all their hardware partners by doing Surface and buying Nokia is a big deal and a great gambit if it works out - but so far its failing and seems desperate. Their position is increasingly precarious.
I don't think they are doomed, I do think they have a very real crisis in leadership and focus.
This is impressive. They blew through their numbers. They're showing that they can offset a slowdown in the core cash-cow via other product lines. Search revenue increase was particularly impressive.
Impressed by the diversity of revenue streams for Microsoft. Wonder how a one trick pony like Google will be able to handle this should it run into pressure from competitors in future.
I am a developer at an investment bank that passed the Level 1 Chartered Financial Analyst exam part of which explicitly tests you on your ability to read accounting statements. If you are a developer without similar training, please realize that you will probably sound as uninformed offering your commentary on this topic as would an equity analyst giving their opinion on pages of C code.
Then I absolutely want to know more about such things. Please do share some or anything you can, regarding, oh... I dunno... whatever sort of insights might escape the ordinary common man, equipped with a high-schooler's grasp of basic integer math.
I've heard these sort of claims before, coming from financially oriented colleagues. I hate it when they make these kinds of dismissive pronouncements. The worst thing you could ever do is plainly state that a thing is simply too complicated to be worth explaining.
If these arcane statements should be regarded as esoteric hieroglyphics by the uninitiated, at least tell us which one is the sun god?
Seriously, we're all pretty curious types around here, and even when the material is bone dry and stale as Soviet bread, we all enjoy learning. At least I know I do.
It sounds like you can give some solid insight on this issue. Could you please state your position instead of simply mentioning that other people are unqualified to do so?
While being able to read a financial statement is a step in understanding a business, I feel this comment needs to be knocked down a few pegs, so...
As an actual CFA charterholder, I can tell you any analyst I work with would have laughed out loud at someone bragging about passing level 1. It means you have roughly an undergrad level understanding of finance.
After reading your comments in this thread, I can see your training doesn't seem to have given you any particularly useful insight into this subject either.
For those people doubting the future of MSFT, here is my take:
MSFT is both a tech company and a utility.
It has growth potential (phones, surface, search, xbox) but it is also completely essential for global business (servers, AD, SQL Server, Exchange, Sharepoint).
In that sense it is a utility. If you took out all the MSFT software in the world everything basically stops. Your electricity probably doesn't work, you probably can't get on a train to get to work and if you manage to get to work you can't login to anything.
People say "but my company has BYOD!" that might be true, but MSFT is still the infrastructure it is running on. You can bring your AAPL car but you're still driving on an MSFT road.
Note the keyword is "first-quarter". Usually for Microsoft the first quarter of the fiscal year is a little below other quarters. But this first quarter is still below what MS typically achieves the other 3 quarters of the year:
- 1st quarter of last year: $16.01 billion
- 2nd quarter of last year: $21.46 billion
- 3rd quarter of last year: $20.49 billion
- 4th quarter of last year: $19.90 billion
- 1st quarter of this year: $18.53 billion (the "record" one)
For those of you who continue to predict the demise of MS, it might be worth mentioning that Microsoft has a quite broad range of products and they primarily sell to enterprise customers who are notoriously non-fickle.
Microsoft's ventures are very much dependent on their operating system though, making the entire company like a house of cards. If their operating system monopoly ever goes, the entire company would collapse with it since they're so dependent on it. The only other successful product they have that isn't dependent on windows right now is xbox, and that's a very volatile market.
Google is similar in the fact that a lot of what they do depends on internet ad revenue.
If they want to translate the great performance some parts of Microsoft are having into a Google-like stock price they should break Microsoft up into business and consumer companies.
Critics of Microsoft are wrong to call it's enterprise business a dinosaur. There is no reason to think Microsoft won't continue to grow this business for decades to come.
But I would like to be able to own this as a pure play, not mixed up with XBOX. Let's call this company "Azure" and spin it off, like HP did with Agilent (which should have been called HP), and let the "devices and services" part screw around with reinventing itself.
Windows revenue is (finally) down. I say finally only because many people wouldn't believe this would happen, even a few quarters ago. That could be quite a problem for Microsoft over the next few years. Right now they are offsetting that with enterprise deals, but do they really think that's safe for them? RIM did, too.
> Windows revenue is (finally) down. I say finally only because many people wouldn't believe this would happen, even a few quarters ago. Right now they are offsetting that with enterprise deals, but do they really think that's safe for them? RIM did, too.
If anyone is surprised by this, then that person has not been reading Microsoft's financial statements.
Windows revenues were also down year-over-year in Q4 of fiscal 2013, and in Q3 of fiscal 2013, and in Q1 of fiscal 2013. (Non-GAAP in all cases, to back out the effect of revenue deferrals.)
As for RIM, I don't see what it has to do with Microsoft. RIM didn't have platform lock-in -- all they had was email.
In contrast, analysts estimate that IBM still derives 40% of its profits from mainframes. ("Estimate" because IBM plays accounting games to minimize the contribution of mainframes.)
$400M in Surface revenues. At even a generous $400 unit price, that's only 1M sold this quarter. Probably closer to 700K if you consider some of them being Surface 2 priced up to $900.
If they play games in Q1, then they'd simply take a hit in Q4. The annual report is audited, and the quarterly numbers have to add up to equal the annual numbers.
It wouldn't look good to play the Surface write-off trick twice in a row.
There would be a beating of a high magnitude if these end up being false. If anything, if they were false, they would have only met numbers not gone and crushed them.
The enterprise and business division is turning into a juggernaut at Microsoft that shows no sign of slowing down. Unlike the Windows team, they have a clear focus and vision guiding them.
Well, junk^Wfast-food chains also growing, so what? What is popular ins't even good in the most cases. Just a Bandwagon + Peer effects as it is in case of Java.
And, of course, defacto server-side OS is Linux. So-called Desktop will be theirs for a long long time, but not because the OS is of any good - it is meaningless a bloatware, but because of word.exe and excel.exe which it seems to be here forever.
As for their services, well, forcing sheeple to use IE and Bing by re-writing their browser's settings doesn't account for even for popularity. IE is crap compared to Chrome, and even some sheeple could see that, but most of them just doesn't know any better, so they got stuck with IE and Bing.
And to appreciate the absurdity, just look what is happening with all those Java apps, which are supposed to run everywhere, with each new release of Windows, which are supposed to be 100% backward-compatible.)
For comparison there is the trend for 'iphone' and 'android'.
Sure Microsoft are doing loads of exciting things but people aren't typing 'Microsoft' or 'Windows' into the search engine box of Google as much as they used to. Make of that what you will.
Well, if you search for "windows safe mode", that went down too and "windows [version] safe mode" is systematically in the top 5 suggestions after "windows [version]". That may mean that people search less for windows because it became more stable. Good news!
I switched my default search in chrome to bing when the new tab page changed. I've since fixed the tab page, but left the search provider alone for now to see what differences I notice over time. So far, it's OK, but fails to give me my geek-centered results for generically named things like orange and amber.
The overwhelming need to poo poo these results in here is pretty disgusting though expected I suppose.
I'm interested in following those Surface numbers over the course of the next year. If they can get that revenue up to about a billion, they will have done very well. And I think they can do it.
[+] [-] ChuckMcM|12 years ago|reply
Google is smearing the smartphone market, at the expense of Apple's cash engine, Microsoft is smearing the Search market at the expense of Google's cash engine and Linux is smearing the operating system market at the expense of Microsoft's cash engine. Seems like there is a lot of pressure to diversify.
[1] http://techcrunch.com/2013/10/24/pricing-engine-adwords-bing...
[+] [-] drzaiusapelord|12 years ago|reply
Is this true? I don't see too many Enterprise shops going "no more windows, exchange, and active directory. its ubuntu, postfix, and ldap all the way!"
Linux certainly has killed commercial unixes, but MS Server products never got popular for web and other areas Linux is traditionally strong in. The fabled year of the linux desktop never happened.
MS still leads with many enterprise products. For all the hand-wringing over surface and bing, MS is swimming in money on the enterprise side.
[+] [-] kumarm|12 years ago|reply
If you ask a source like Yahoo who see's real data, you would know thats not true. If Bing is making an impact Yahoo would not be going out of way to avoid Bing.
CPC is down due to lower CPC's on Mobile. Isn't it public knowledge?
[+] [-] Samuel_Michon|12 years ago|reply
That statement is not borne out by data. Apple’s iPhone revenues and market share have continued to rise since inception. Please remember that Apple was never the biggest phone manufacturer. In the last couple of years, iPhone (and in general, smartphone) growth has mainly come from people switching from feature phones. The rest came at the expense of Symbian, Windows Mobile, and Blackberry. The number of people switching from iPhone to Android is negligible on the whole.
In the last reported quarter by Apple, in which the iPhone offerings were awaiting a refresh, Apple sold 20% more iPhones compared to the same quarter last year. Unit sales reached an all-time high for the June quarter.
[+] [-] seldo|12 years ago|reply
http://cl.ly/image/1t2Y3d1B0A1y
[+] [-] recuter|12 years ago|reply
Their online division giving Google some heat is all well and good but that Wintel thing is still their bread and butter - alienating all their hardware partners by doing Surface and buying Nokia is a big deal and a great gambit if it works out - but so far its failing and seems desperate. Their position is increasingly precarious.
I don't think they are doomed, I do think they have a very real crisis in leadership and focus.
[+] [-] CamperBob2|12 years ago|reply
[+] [-] jusben1369|12 years ago|reply
[+] [-] MaysonL|12 years ago|reply
[+] [-] barista|12 years ago|reply
[+] [-] 300bps|12 years ago|reply
[+] [-] droneStrikes|12 years ago|reply
I've heard these sort of claims before, coming from financially oriented colleagues. I hate it when they make these kinds of dismissive pronouncements. The worst thing you could ever do is plainly state that a thing is simply too complicated to be worth explaining.
If these arcane statements should be regarded as esoteric hieroglyphics by the uninitiated, at least tell us which one is the sun god?
Seriously, we're all pretty curious types around here, and even when the material is bone dry and stale as Soviet bread, we all enjoy learning. At least I know I do.
[+] [-] nilved|12 years ago|reply
[+] [-] sbuccini|12 years ago|reply
[+] [-] r00fus|12 years ago|reply
Otherwise, your comment sounds suspiciously like conversational terrorism, specifically the first item on this list:
http://www.vandruff.com/art_converse.html
[+] [-] lemma|12 years ago|reply
As an actual CFA charterholder, I can tell you any analyst I work with would have laughed out loud at someone bragging about passing level 1. It means you have roughly an undergrad level understanding of finance.
[+] [-] ejstronge|12 years ago|reply
What do you think about the importance of this announcement, given your training?
[+] [-] clavalle|12 years ago|reply
[+] [-] megablast|12 years ago|reply
[+] [-] bane|12 years ago|reply
[+] [-] sytelus|12 years ago|reply
[+] [-] unknown|12 years ago|reply
[deleted]
[+] [-] unknown|12 years ago|reply
[deleted]
[+] [-] netpenthe|12 years ago|reply
MSFT is both a tech company and a utility.
It has growth potential (phones, surface, search, xbox) but it is also completely essential for global business (servers, AD, SQL Server, Exchange, Sharepoint).
In that sense it is a utility. If you took out all the MSFT software in the world everything basically stops. Your electricity probably doesn't work, you probably can't get on a train to get to work and if you manage to get to work you can't login to anything.
People say "but my company has BYOD!" that might be true, but MSFT is still the infrastructure it is running on. You can bring your AAPL car but you're still driving on an MSFT road.
[+] [-] mrb|12 years ago|reply
- 1st quarter of last year: $16.01 billion
- 2nd quarter of last year: $21.46 billion
- 3rd quarter of last year: $20.49 billion
- 4th quarter of last year: $19.90 billion
- 1st quarter of this year: $18.53 billion (the "record" one)
[+] [-] teamonkey|12 years ago|reply
[+] [-] paul_f|12 years ago|reply
[+] [-] mikelat|12 years ago|reply
Google is similar in the fact that a lot of what they do depends on internet ad revenue.
[+] [-] Mikeb85|12 years ago|reply
While I have no doubt they'll survive another 20 or 30 years, they no longer have the power and mind-share they once had.
[+] [-] us0r|12 years ago|reply
RIM was a one trick pony. Microsoft has several billion dollar businesses.
[+] [-] Zigurd|12 years ago|reply
Critics of Microsoft are wrong to call it's enterprise business a dinosaur. There is no reason to think Microsoft won't continue to grow this business for decades to come.
But I would like to be able to own this as a pure play, not mixed up with XBOX. Let's call this company "Azure" and spin it off, like HP did with Agilent (which should have been called HP), and let the "devices and services" part screw around with reinventing itself.
[+] [-] devx|12 years ago|reply
[+] [-] tanzam75|12 years ago|reply
If anyone is surprised by this, then that person has not been reading Microsoft's financial statements.
Windows revenues were also down year-over-year in Q4 of fiscal 2013, and in Q3 of fiscal 2013, and in Q1 of fiscal 2013. (Non-GAAP in all cases, to back out the effect of revenue deferrals.)
As for RIM, I don't see what it has to do with Microsoft. RIM didn't have platform lock-in -- all they had was email.
In contrast, analysts estimate that IBM still derives 40% of its profits from mainframes. ("Estimate" because IBM plays accounting games to minimize the contribution of mainframes.)
[+] [-] marcosdumay|12 years ago|reply
Well, the price cut is another symptom of decreasing market appeal. But it does make the number less useful.
[+] [-] umeshunni|12 years ago|reply
[+] [-] veemjeem|12 years ago|reply
[+] [-] rsoto|12 years ago|reply
[+] [-] aabalkan|12 years ago|reply
[+] [-] epa|12 years ago|reply
[+] [-] tanzam75|12 years ago|reply
It wouldn't look good to play the Surface write-off trick twice in a row.
[+] [-] outside1234|12 years ago|reply
[+] [-] eddiegroves|12 years ago|reply
[+] [-] dschiptsov|12 years ago|reply
And, of course, defacto server-side OS is Linux. So-called Desktop will be theirs for a long long time, but not because the OS is of any good - it is meaningless a bloatware, but because of word.exe and excel.exe which it seems to be here forever.
As for their services, well, forcing sheeple to use IE and Bing by re-writing their browser's settings doesn't account for even for popularity. IE is crap compared to Chrome, and even some sheeple could see that, but most of them just doesn't know any better, so they got stuck with IE and Bing.
And to appreciate the absurdity, just look what is happening with all those Java apps, which are supposed to run everywhere, with each new release of Windows, which are supposed to be 100% backward-compatible.)
[+] [-] Theodores|12 years ago|reply
http://www.google.co.uk/trends/explore?q=microsoft%2C+window...
For comparison there is the trend for 'iphone' and 'android'.
Sure Microsoft are doing loads of exciting things but people aren't typing 'Microsoft' or 'Windows' into the search engine box of Google as much as they used to. Make of that what you will.
[+] [-] ucha|12 years ago|reply
http://www.google.com/trends/explore?q=windows+safe+mode#q=w...
My point is that, yeah, getting conclusions from that is hard...
[+] [-] spoiledtechie|12 years ago|reply
[+] [-] rch|12 years ago|reply
[+] [-] skc|12 years ago|reply
I'm interested in following those Surface numbers over the course of the next year. If they can get that revenue up to about a billion, they will have done very well. And I think they can do it.
[+] [-] tomkin|12 years ago|reply
[+] [-] unknown|12 years ago|reply
[deleted]