Ouch! Microsoft Profits Skydive

By WebProNews Staff - Thu, 04/24/2008 - 18:36

Revenues hit a company record, though

When Steve Ballmer threatened to take the Yahoo deal off the table, that could have been with an eye on the company's woeful financial performance, just announced for their third quarter.

I've been on the freefalling Tower of Terror in Disney World, where gleeful Imagineers yank you down thirteen stories faster than gravity could do, because it's more fun that way. Microsoft shareholders endured a similar ride when the tech company reported the awful truth about their Q3 2008 financials today.

Plummeting operating income, down 33.1 percent. Net income, lowers by 11 percent. Revenues were fantastic, a record $14.45 billion for the quarter. So what happened?

Look across the Big Pond, at our friends in Europe, says Ballmer and company. La belle dame sans merci indeed.

"Operating income and earnings per share results included a charge of $1.42 billion, or $0.15 per share, for the European Commission fine," Microsoft said in its announcement. Microsoft received that fine for failing to live up to the Commission's perceptions of what they should be doing in making technical information available to third-party developers.

Microsoft enjoyed a bright spot at its troubled Entertainment division, where repairing defective Xbox 360 consoles suffering from the Red Ring of Death. Revenue for the division rose 68 percent year over year in the quarter, with cumulative console sales passing 19 million during that period.

After hours activity showed some mild negative sentiment by investors. At press time, shares of Microsoft were down 4.65 percent to $30.32. As Silicon Alley Insider noted, the numbers will make it a little more difficult for Microsoft to close the Yahoo takeover without kicking in more cash or stock to increase the value of the bid.

News Tags: Financial, Microsoft

7 Comments

By ofertas trabajo madrid (WPN reader) - Sat, 12/13/2008 - 00:51

this is story of microsoft

this is story of microsoft and yahoo company...

The idea of Yahoo and Microsoft getting together has been out there for years, often scoffed at, but making sense in Yahoo’s large lead in search against Microsoft and that company’s failure to quickly gain on Google, much less Yahoo.

Back in May 2006, then Yahoo CEO Terry Semel now famously quipped about Microsoft having "no chance in search:"

In a breakfast interview with New Yorker writer Ken Auletta, Mr. Semel, a former film industry executive, swatted down the idea that Yahoo ever talked about an outright sale to Microsoft. Instead, he said that they tossed around the notion of Microsoft buying a stake in Yahoo’s search business — a transaction that he compared to an amputation.

“Microsoft taking over Yahoo — that conversation has never come up,” Mr. Semel said. “[We discussed] search, and Microsoft co-owning some of our search. I will not sell a piece of search. It is like selling your right arm while keeping your left — it does not make any sense.”

Indeed, Mr. Semel’s less-than-flattering comments about Microsoft made an alliance between the two companies seem even more unlikely. “My impartial advice to Microsoft is that you have no chance,” he said. “The search business has been formed.” He also suggested that Yahoo employees might chafe under Microsoft’s control.

If Microsoft now actually buys Yahoo, some might say they had the last laugh. But then again, it is to some degree an acknowledgment that Microsoft did need Yahoo, after all.

In 2007, more news of talks came out, but these went nowhere (see here for a Ballmer reaction). But the letter to Yahoo from Microsoft suggests that Yahoo doesn’t have the luxury of sitting back:

In February 2007, I received a letter from your Chairman indicating the view of the Yahoo! Board that "now is not the right time from the perspective of our shareholders to enter into discussions regarding an acquisition transaction." According to that letter, the principal reason for this view was the Yahoo! Board’s confidence in the "potential upside" if management successfully executed on a reformulated strategy based on certain operational initiatives, such as Project Panama, and a significant organizational realignment. A year has gone by, and the competitive situation has not improved.

Microsoft has developed a plan and process that will include the employees of both companies to focus on the integration of the combined business. Microsoft intends to offer significant retention packages to Yahoo! engineers, key leaders and employees across all disciplines.

By internet marketing indonesia (WPN reader) - Sat, 12/13/2008 - 00:48

look Yahoo has posted a

look Yahoo has posted a short response:

Yahoo! Inc. (Nasdaq:YHOO), a leading global Internet company, today said that it has received an unsolicited proposal from Microsoft to acquire the Company. The Company said that its Board of Directors will evaluate this proposal carefully and promptly in the context of Yahoo!’s strategic plans and pursue the best course of action to maximize long-term value for shareholders.

By lowongan cpns 2009 (WPN reader) - Sat, 12/13/2008 - 00:45

I hear : Microsoft has

I hear :

Microsoft has proposed to Yahoo’s Board Of Directors that Microsoft acquire all Yahoo shares for $31, which is currently estimated to be worth $44.6 billion. Yahoo shareholders would get either cash or Microsoft shares (0.9509 of shares per 1 Yahoo share), though the entire deal couldn’t involve more than half payment overall in cash ($22.3 billion). The price is said by Microsoft to be 62 percent higher than what Yahoo shares went for as of the close of trading yesterday. Note that former Yahoo CEO Terry Semel has just stepped down as chairman of the board, with existing board member Roy Bostock now stepping up.

By lowongan kerja terbaru (WPN reader) - Sat, 12/13/2008 - 00:43