12-07-2012, 01:04 AM | #61 |
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[[[ update of Post 22 this thread ]]]
I finally went and looked for the date of that Electronics Show in Atlanta. It was COMDEX in 1997 in Atlanta I believe though it is possible it was 1995. 15 to 17 years ago. MS was selling Vaporware and the rest is history. Last edited by frahse; 12-07-2012 at 01:06 AM. |
12-07-2012, 01:22 AM | #62 |
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12-07-2012, 05:33 AM | #63 | ||
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I've just spent the past couple of hours googling, and have been unable to locate a breakdown of operating income by product for Microsoft, so I'll do a bit of speculating based on overall numbers. A recent WSJ article, commenting on the importance of Windows and Office to Microsoft's profitability, observed that in FY12 Microsoft's "three other divisions together generated 42% of revenue but no operating profit between them." That is, while Server and Tools, Entertainment and Devices and Online Services brought in 42% of MS's FY12 revenues, after subtracting off operating expenses Microsoft made no money on them, which is exactly what I said. But that's a bit disingenuous. Here is Microsoft's FY12 operating income breakdown by division (in millions): Windows & Windows Live: $11,460 Server & Tools: $7,431 Online Services: ($8,121) Business: $15,719 Entertainment and Devices: $364 Coporate-level activity: ($5090) TOTAL: $21,763 Since I haven't been able to find a breakdown by product, for the sake of argument I'll just pretend the Tools side of Server and Tools accounted for 50% of the S&T profits, and (again, for the sake of argument), we'll give Exchange and SQL Server each one third of that half. That works out to about $1.25 billion profit per product. Given a total operating income of nearly $35 billion ($31 billion of which derived from Windows and Office), that's what I define as "made no money at". Certainly, it's not money Microsoft could survive on. (In addition, I would argue that both Exchange and SQL Server are only as successful as they are because they're tied to Windows, but that's an argument for another day.) |
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12-07-2012, 05:44 AM | #64 | ||
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Compare that with total operating income of $21 billion in FY12. X-Box profits are a rounding error for Microsoft. |
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12-07-2012, 05:54 AM | #65 |
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That's not really the point. A company like MS can't afford to have all its eggs in one basket; it relies on revenue from a wide range of different products for its total income. If it makes $1bn a year from server products, that may only be a small slice of its $30bn overall profit, but that $30bn comes from lots of different sources.
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12-07-2012, 06:15 AM | #66 | |
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XBOX is the revenue generator in that division--their online efforts (Bing, ad sales, etc) are the sinkhole eating up XBOX revenues. XBOX generates north of a billion in profits by itself. Nonetheless, $364 million net profit is about as much as Nintendo makes in a good year. More than Amazon itself nets, too. There aren't many business that will clear you $3-5 billion in annual profits no matter who you are. For that matter, there aren't many million-dollar-a-day business, either. But building a few of the latter is relatively "easier" than hitting a jackpot with a much bigger cash cow. Those are few and far between. Last edited by fjtorres; 12-07-2012 at 06:29 AM. |
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12-07-2012, 10:41 AM | #67 | ||
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Put another way, Microsoft could comfortably survive the loss of every other product it sells. If the words "relies on" mean anything, then Microsoft's cake comes in only two flavors; everything else is just icing. Microsoft has spent most of the past two decades attempting to find a successful mobile strategy. So far all it has to show is a string of failures. And then a strange thing happened: while Ballmer was publicly laughing off the iPhone, and MS was still dorking around with WinCE, Apple was busy reconfiguring the tech world around its mobile offerings. Microsoft's failure to read the tea leaves handed Google the opportunity it needed to break into mobile, and Microsoft was once again left flat-footed. Of course, that may actually be a good thing for Microsoft. By some estimates, Microsoft makes more money from Android than it does from its own mobile OS. Maybe Windows 8 and Surface will finally change all that; I'm just not betting the farm on it. |
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12-07-2012, 10:53 AM | #68 | |
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The thing I'm astounded about is why they didn't put you in charge of MS when Gates retired. ???? Last edited by kennyc; 12-07-2012 at 10:55 AM. |
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12-07-2012, 12:03 PM | #69 | ||
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The Online Services Division had a net operating loss of more than $8 billion dollars in FY12 (though that included a one-time goodwill impairment charge of $6.2 billion from the aQuantive takeover, which is a story in itself). Entertainment and Devices had operating income of $364 million on revenues of $9.6 billion, which is as close to break-even as you'll get in Microsoft terms. I have not been able to find any breakdown by product of MS's operating income. Where do you get that the X-Box makes more than a billion in profit? Quote:
Microsoft needs to find replacements for its declining Windows and Office OI, but a few hundred million from its Entertainment Division won't come close to making up the difference. And early numbers coming in on Windows 8 and MS's tablet push in general are less than encouraging, as is implied in the topic of this thread. |
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12-07-2012, 12:23 PM | #70 |
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I'm wondering if Microsoft might try to limit its success. After all, if it tried had enough a court might decide to split the company up, like it almost happened in 2000.
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12-07-2012, 07:47 PM | #71 | ||
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* Or am I wrong on the default anti-virus facts here? MSE is default with a home-built Windows 8 PC, but what what about a name-brand unit with bloatware? Does anyone know? |
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12-07-2012, 08:51 PM | #72 |
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Ditto aQuantive. They bought it for $6.3 billion, then took a $6.2 billion goodwill impairment charge against it, which is the equivalent of admitting they paid $6.2 billion too much.
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12-07-2012, 09:06 PM | #73 |
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I don't know about new name-brand units, but IIRC, when I upgraded my Duo to Windows 8 I was given the option during setup to learn more about other AV products, install one of my choosing or use theirs (or none at all).
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12-08-2012, 02:44 AM | #74 |
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12-08-2012, 07:03 AM | #75 |
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The Tax Police would be "suspicious" if they did it *just* for that. And goodwill paper losses get scrutinized as a matter of principle.
It is not uncommon for mergers and acquisitions to result in significant paper losses because market conditions do change and by the time the deals are completed, the new property has declined in value. Plus, most mergers come at a premium over the true value of the property. Some are just more painful than others. It's all part of the "game". But yes, those big writedowns are applied to the tax bill to a certain extent. As a rule, companies take those "goodwill losses" in chunks, spread over time, but MS prefers to take their medicine at once. When they screw up that way they don't bother trying to sugarcoat it. |
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