Thursday, April 24, 2008

Microsoft FY08Q3 Results

FY08Q3: favorite post-analysis sites for the results:

The last report was a knock-out and the stock responded accordingly and shot up.

Ends up Microsoft leadership had a plan to address that issue: attempt to acquire Yahoo. Amidst a world of puzzled financial faces mumbling "wtf?" we started our ill advised adventure to consume Yahoo, whether they wanted it or not. The stock responded accordingly and tanked.

I expect today will be another solid quarter, but the Ill Advised Adventure Monkey is riding our back and I expect a good bit of the analyst probing will be around Yahoo (wondering if we'd be dumb enough to raise our bid), and perhaps reviewing the upcoming money-making product stream, plus what a non-Microsoft + Yahoo future looks like (one word: shiny).

Mr. Ballmer engaged in some good bluster Wednesday, saying that Microsoft could just walk away from the deal. Please, please, walk on by. I haven't talked to every employee at Microsoft, of course, but everyone that I've talked to believes this is a bad idea. And that's not hand wringing.

Overall: the results are in and... ouch. Various reactions:

(1) MSFTExtremeMakeover: MSFTextrememakeover Q3 FY08 Earnings - which firsts starts off w/ MSFTExtremeMakeover considering packing the whole blogging gig up - go over and have productive participation if you want to express your encouragement for the blog to continue. A snippet on the initial analysis:

Again looking quickly, Client sucked. And it seems to be not just the technology guarantee impact but also anemic OEM growth. The .ppt brags about the same 140M Vista licenses sold that we've been hearing about for a while now. So clearly there's been no acceleration wrt installed base upgrades either. Surprise! Not. MBD was also weak. I haven't delved further to figure out why. Servers put in a strong showing as per usual. Kudos to that group at least. And finally E&D managed to eke out a paper profit (as long as you ignore intra-group transfers and the convenient "Corporate-level activity" bucket).

(2) Mr. Joe Wilcox: Microsoft Watch - Corporate - Microsoft Q3 2008 by the Numbers - as always a nice breakdown.

(3) Mr. Todd Bishop:

Microsoft Strategy solid even without Yahoo, which roles up a response from Mr. Liddell that you can only hope allows us to walk on by Yahoo (or at least not raise the offer price):

As outlined in our recent letter to the Yahoo board, unless we make progress with Yahoo towards an agreement by this weekend, we will reconsider our alternatives. We will provide updates as appropriate next week. These alternatives clearly include taking an offer to Yahoo shareholders or to withdraw our proposal and focus on other opportunities, both organic and inorganic.

Notes Microsoft's profits exceed estimates - snippet regarding Xbox / Entertainment and Devices making money instead of being one huge money sink:

Does the operating profit mean that the company is no longer losing money on the Xbox 360 hardware?

Colleen Healy, Microsoft's general manager of investor relations, didn't answer that question directly when I asked this afternoon. However, she said, "What I can confirm for you is we're making really good progress on that cost curve."

(4) WSJ: Business Technology Vista Drags on Microsoft - snippet:

If we dig a little deeper there’s evidence to suggest that Microsoft has a Vista problem.

(5) Scotch it! Two to close on, including best use of the word "scotch" I've seen in a while:

  1. Microsoft results disappoint Financial News - Yahoo! Finance
  2. Microsoft issues final threat to scotch Yahoo deal Financial News - Yahoo! Finance

Saturday, April 05, 2008

Microsoft, Just Walk on By

Walk on By: so, sure, we can get a little hissy and prissy with Yahoo not wanting to come to the table, but if even Microsoft's executive leadership is noting how the bloom and most of the petals are off of the Yahoo blossom, wouldn't that be a good idea to just walk away? Why are we out to buy a wilted arrangement? What does Mr. Kevin Johnson - the presumed architect behind the Yahoo acquisition - seem to know that most of the educated financial world doesn't?

I appreciate that we're at least threatening to lower the bid rather than pump it up.

I hope that this harsh strategic move can also be appreciated as an elegant way to walk on by, noting with disgust Yahoo's ability to deliver and be relevant.

Blabby McBlabster: SteveSi, "Pardon me, Mr. Gates, might you step in here for a moment of translucency re-education?" *Smack* Somehow the message to not talk about release dates didn't make it up to Bill Gates, all talking about Win7 rolling out next year rather than in 2010. You know, if that can be pulled off, it would be a lot better to start talking about it once the team has reached the light at the end of the tunnel. Throw this BillG comment in there along with the one of the Sony PS3 release walking head-on into Halo 3 (how'd that go? Oh, yeah, those guys seceded after they succeeded, having released when they were done).

Poor Me: yeah, I miss that DareO has adjusted his priorities and that blogging doesn't fit into them. I understand, but I'm sad for me and Dare's readers. This blog is indebted to Mr. Obasanjo because without his linkage to the early months Mini-Microsoft there's no way I would have built up that initial high quality readership and participation. Thanks for the links, Dare. One day, when this gig is up, I certainly owe you a lunch out.

Goodness knows I've thrown in the towel here, too. And I constantly wonder whether it's worth continuing, given that I'm not putting the deep research and reading into this that I did during those first two years. And the oodles of people we keep hiring is another reason to start fingering the towel: Mini-what? I don't know how many sharks we've jumped here already, and I always see fins in the water ahead.

MSFTExtremeMakeover: Is the Sleeping Giant Finally Waking Up, or Just Rolling Over? Snippet:

Like Nero fiddling while Rome burned, Ballmer seems to be preoccupied with GOOG while MSFT melts down - or at least while the first embers, which had already been apparent for years, now threaten to turn into something much more serious. Hence the recent ill-advised and fiscally irresponsible YHOO bid.

OO! OO! OOXML! What's interesting to me is to read the post-reactions to the approval of OOXML and how many respected people are appalled at the behavior of the anti-OOXML / pro-ODF fanatics. Now these people get to enjoy the experience of Slashdot-commenter-level idiocy crapping all over them and impugning their reputations. Thanks guys! You just opened a lot of doors to OOXML.

At least take some solace in: competition is good. Even for you.

MSPoll 08: a collection of interesting points made in the last post about the recent MSPoll 08: first, around actually implementing change for issues that come up in the poll:

I have been manager at Microsoft for several years. In each of the teams that I have been, the management team takes time to interpret the results of the surveys and try to find solutions.

However, it has always been extremely difficult to deal with the huge bureaucracy that have to be addressed in order to make any change (minor or major). [...] We have too much bureaucracy that prevents us from responding quickly, clearly and effectively to our employees and our customers.

Some hope to pass on that the MSPoll can help get 'er done:

Last year our PUM was wrecking our group, and the poll results showed it. Our fast-talking PUM convinced his management that this was a result of transient events outside the org, and a few months later we were actually asked to repeat the poll. By this time things were even worse and and the PUM had been publicly taking his frustrations out on his directs, so the 2nd time he really got slaughtered. He lost his team (it went to his GPM) and soon after left MSFT.

Viva the poll!

And another:

I've seen that the poll are almost magical to get rid of your lower performing managers up to GM level. You can't say it doesn't have effect although I don't think it changes any thing beyond that level. I've never heard a VP getting hurt by poll. Certainly won't change Ballmer's mind.

One disturbing theme did pop-up, though: happiness manipulation right before the poll. Beer, pizza, Xbox partying, espresso carts, and even saying that bonuses are directly tied to the team getting stellar poll results.

What's Going on in India? Okay, the last post also has a bit of a keg of gun powder in the comments, discussing the engineering quality of Microsoft India. Feel free to continue that conversation there, because the effective management of Microsoft India and Microsoft China is worthy of its own (tricky) post. Starting that off for now, some comments like the following have popped up:

I used to work in Microsoft India SMSG. In the past week, 10% of BMO quit. We've had people in EPG bail out in a hurry because the management does not care and is totally intellectually corrupt. Hiring is the exclusive domain of the GM who calls her cronies from HP to rape the company culture. I am done with MS India. DPE has a leader who is not a leader.

When people talk about MS Poll and how OHI has improved they forget that the the problem is that 50% of the hires in India are about a year old and they're still drinking the kool ade. To them, the mere act of joining Microsoft is something to be proud of. They're still giddy with delight at getting the MS offer letter because for years they have been shat upon by the Indian SIs they come from during their tenure there.

We've got a CVP who is preoccupied with seeing his face in the newspaper and magazines. To him, success is the number of publication impressions and not the well being of the employees.

Stock price?? It's important, but with grade levels sucking in India, the grants are miniscule. Unless of course you are a partner or VP in which case you are laughing all the way to the bank while the employees drive revenue and sweat in the mines.

This is the Microsoft India I left. I'm glad I am no longer part of it.


I have heard the same about India Dev Center also. Lot of people at lower levels (dev/dev-II) seem to be leaving the company and salary seems to be the primary motivation. In some cases, even the entry-level salaries at these "rival" companies is more than these people's (with 3-5 years experience) current salary.


How bad is things in Microsoft India? The GM Neelam Dhawan is fired and going back to HP. She is taking Rajiv Srivastava with her.


My friends and fellow Microsoft people, let me tell you that the situation in SMSG India is horrible. People are leaving and the leadership never meets the employees. We have box manufacturers trying to sell software. We have Chairman who I have not seen in 6 months in person. I have seen him on TV and the newspaper a few times. We have MD Neelam Dhawan who interviewed at Cisco 2 times and did not get a job there and is now going back to HP. The Country Manager for Xbox has left. BMO has almost 100% churn.

Forecast is... Suckage. Pure Suckage. Finally, from the Thank God for Monster, Dice, and HotJobs department:

Weekly reporting !!!

The Walmartization of Microsoft is now complete. I am in EPG and am now expected to give a weekly sales forecast. What crack is he smoking?


We are tired of scorecards and metrics and now Weekly Fucking forecasts????

Will Kevin-the-used-car-salesman please leave the building?

SteveB - what WILL wake you up?