Let's have some chart fun courtesy of Yahoo financial charts (not pretty, but the data is there)... first, just looking at share price increase, it's MSFT vs. GOOG:
Ka-Pow! (Well, at least of this writing; the charts are live and all of this text might make zero sense relative to current financial trends [that would be nice].) Okay, the next contender: MSFT vs. AAPL:
I really don't like being the horizon here in both cases. Now then, of course we're bringing in billions $USD while Google is in the millions. But they have momentum and their stock is going in a direction I'm damn well envious of. And Apple? Well, they are All That right now, aren't they, grooving silhouettes and all. During a special meeting with BillG & SteveB a while back, one of the Microsofties posed a concerned question about Apple and what we're doing to compete against their cool iPod this and iTunes that. BillG did a great reality check by observing, "Well, I wouldn't want to swap places with Apple." True. But, still... return on investment is looking pretty sweet right now. I'd swap that!
So Microsoft's earnings for Q1 of FY05 looks solid from the results perspective, but the future is not enthusing analysts. From one report: (bold mine)
Analyst Jamie Friedman with Fulcrum Global Partners said the company's quarterly numbers looked fairly strong overall. But he said Wall Street would likely be concerned about the company's unearned revenue figures.
Those numbers, which reflect contracts that are signed but not entirely recognizable as revenue immediately, declined more sharply than he expected. That raises concerns the company doesn't have a major new product available to lure corporate customers into renewing long-term contracts.
Microsoft doesn't expect to ship a new version of its dominant Windows operating system until 2006, and the next big upgrade for its server product isn't expected until 2007.
"The company looks like it needs products," he said.
But Friedman also praised Microsoft for cutting costs, something executives have pledged to do as the years of explosive growth in the technology industry have waned.
Hell yeah, we need products. We need products real bad.
2006? Are we to wait until then to see the stock potentially move up in reaction to our ongoing Longhorn salvage operation? If you had to guess what the market's reaction is going to be to the next version of Windows when we finally, finally manage to give it the bums' rush, what would it be? My guess: zero reaction. What are we putting in there that is going to excite the user / analyst? Better security, more stability? Dude, are you telling me what I just bought from you is insecure and broken? And you want me to pay you to make it better?
All these technical improvements we meaningfully expound upon might make your everyday IT guy's nipples harden (mmm, USB-drive lock-out), but the analysts and consumers just hear ya-da-geekity-geek-not-worth-my-money-bing.
And as for praising our cost cutting, I guess that praise would fall a little short if details were provided regarding how we're reaching our $1,000,000,000 goal for FY05. It would look like a dance around the obvious: the best way to cut costs is to cut staff. Especially a lot of the dead wood filling the offices. Cuts now would invigorate the company, and enthuse the analysts about Microsoft's future.