Wednesday, April 26, 2006

Microsoft FY06Q3 Results

Update: added discussion of the released financials. Plus Ballmer talking about firing people. And Intel's restructuring.

Another quarter, another check-in with FY06 for MSFT. So how is it looking?

Pre-discussion of the earning results:

Post-discussion earning results: Yee-ouch! Right in the kisser! You'd think we done good. Except for meeting expectations. And how does The Street treat those who come up short?

It slaps them with a 2.5.

Let's see, after hours check-in has us down over 6% to $25.59. Yes, the commenter who sold at $27 yesterday is looking pretty bright right tonight. So we did not meet expectations.

The webcast was pretty boring, until after just over an hour Rick Sherlund of Goldman Sachs probed quite deftly regarding how the numbers didn't seem to add up and that there had to be some kind of mystery project going on to represent a big chunk of extra expense. A two-point-four billion dollar mystery. Liddell was mum. Discussion:

Snippet in the InformationWeek link:

"The revenues looks good…but your expenses are more than $2.4 billion more than I estimated....There's something really big here. It sounds like you're building a Google or a Yahoo and Ray Ozzie has said this is really expensive. It looks like you're ramping up your online business and the decision is to take the benefits of next year's product cycle to gear up for a battle in the online market," said Rick Sherlund, partner with Goldman Sachs as he tried to suss out what was going on.

SQL server has been a knock-out winner. Xbox 360 has been a wonderful way to burn through cash.

General round-up:

Meanwhile, in the world, Mr. Ballmer goes and describes how everyone needs to fire as many people as Microsoft does (ar-roo? I'd like to see that!) and Intel slaps down a painful reality-check restructuring. I think Mr. Ballmer needs to be taking some advice vs. giving it. I know, I know... get Vista wrapped up and then whip-out the bitter medicine. Even Mr. Johnson is noting that Windows has more people than it needs. If you're in one of the groups that Kevin notes as being part of the redundant overhead (e.g., photos), you know it's time to start looking around before someone starts arranging the chairs and plays the arr-i-eff music.

In other going ons...

(1) Jamie has done it again over at Channel9 with C9Park: Browser Wars. Yes, I laughed pretty hard at Han Scoble but ever more at Princess LisaB.

(2) Mr. Scoble had an interesting post this week... what was it again... oh yes: How Microsoft can shut down Mini-Microsoft. When I first saw the title my mind raced wondering just what the heck kind of break Scoble had been on. Re-education with a head-mounted cage and a hungry rat? Then I read it and appreciated its forward looking optimism.

Yes, please: marginalize me! Nothing would make me happier than to put up the post titled My Work Here is Done. (Well, I guess that could have multiple meanings.) Basically, address the pillars that have become the foundation of this blog and not only can I go back to more date nights with my beloved Buttercup but also we all end up with an efficient Microsoft with well compensated and empowered employees along with delighted, happy shareholders, customers, and partners. Win. Win. Win. Win.

(3) DerekDB, a wonderful Ex-Microsoftie (bad attrition again), has landed a one-two punch with a couple of recent posts. In More Developers != More Features he discusses the mis-middle-management going ons with Longhon / Vista, including this snippet:

Vista isn't neutered and delayed because of any lack of people. It is a mess because of middle management. [...] At least at the time I left (6 months ago), I saw very little evidence that the management of these failed projects was getting any kind of a slap on the wrist. The problem is that in an org that large with that my dependencies, it was impossible to tell which team was actually mismanaged, and which team just was dragged down by the other mismanaged teams.

And while still running hot off of this, Visual Studio (perhaps in some sort of revenge) starts letting loose the grief upon Derek: VisualStudio ...oh my.... I've mentioned woes people have had with VS before (VS2005 specifically). Derek's thoughts here:

What developer wants to waste time with this crap? It is embarrassing (for Microsoft) that I've had such better experiences with Sun's JDK and Eclipse. Sure, VS is faster, but what good is faster, when it doesn't work?

How are the VS service packs coming, anyways? Anyone in VS-land willing to reach-out to Derek and pick him up as a buddy as we fix VS bugs and work towards Orcas? I think you'd have a wonderful time.

(4) Dare has a couple of interesting posts, too: New Features aren't Innovation and Our Org Chart is %@&$'d Up (sorry... prude here). Plus a goodbye to Gretchen (hmm, that one has some whispering in Scoble's ear).

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