
Microsoft Expected To Post First Ever Quarterly Loss In Its History - z92
http://www.cbs19.tv/story/18940632/consumer-corner-microsoft-could-post-first-loss-in-20-years
======
bunderbunder
The news is somewhat less disastrous in that it's because Microsoft had to
write down a purchase they made a while ago. So they didn't lose money this
quarter so much as acknowledge that they had previously lost a lot of money
and put that on their books this quarter.

What's really disastrous, though, is Steve Ballmer's recent comments about how
they are determined to compete with Apple on every single front, regardless of
whether they have any other reason to be in that portion of the market. This
aQuantive debacle is a result of Microsoft trying to do exactly the same thing
with Google. With that statement, Ballmer indicated in no uncertain terms that
he has learned absolutely nothing from that mistake.

~~~
guelo
If Microsoft really wants to compete with Apple they should kill Office on OS
X and revoke license for Windows on BootCamp and all OS X virtualization
products. Though really they should have done these things 5 years ago. Apple
doesn't allow Windows users to run OS X, Microsoft shouldn't allow the other
way.

~~~
danieldk
First, how can they revoke a license for Windows on Bootcamp? If I purchase a
retail Windows license, I can install it on any PC.

Second, I don't think OS X is the real threat to Microsoft. Sure, the Mac
still grows in popularity, but it's relatively marginal. The biggest threat to
Microsoft is the popularity of tablets. The iPad convinced people that they
can use it for the majority of their home computing. Every time the average
consumer buys an iPad it's a lost or delayed PC sale. Imagine what happens
when Google gets things right, and the tablet market explodes like the
smartphone market before.

~~~
streptomycin
> First, how can they revoke a license for Windows on Bootcamp? If I purchase
> a retail Windows license, I can install it on any PC.

They could do it the same way Apple prevents you from installing OS X on
commodity hardware:
[http://en.wikipedia.org/wiki/OSx86#Legal_issues_and_Apple_ob...](http://en.wikipedia.org/wiki/OSx86#Legal_issues_and_Apple_objections)

~~~
Tloewald
Except that Microsoft's entire business is installing its stuff on commodity
hardware.

~~~
streptomycin
The larger point is that software companies can restrict what you do with
their software, even if you buy it.

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stephengillie
It's not an article, just a blurb:

(CBS/CNN) - Microsoft is in danger of reporting its first quarterly loss in
the last 20 years.

The world's largest software company will absorb a $6.2 billion dollar charge
stemming from an online advertising service it bought in 2007. Analysts
estimate Microsoft earned about $5.3 billion dollars in the quarter that ended
in June, so that charge would send the company into the red.

------
randomdrake
More information about this can be found in their press release [1] from a
couple weeks ago. It appears that they are having to do a writedown [2] on
their purchase of aQuantive [3]. The original purchase was to be more
competitive in the online advertising marketplace when they lost out to Google
in acquiring DoubleClick [4].

Unfortunately, there is little information about this will actually affect
their financials. The single-sentence blurb from the source doesn't shed much
light on the situation.

[1] - [http://www.microsoft.com/en-
us/news/Press/2012/Jul12/07-02Co...](http://www.microsoft.com/en-
us/news/Press/2012/Jul12/07-02CorpNewsPR.aspx)

[2] - <http://en.wikipedia.org/wiki/Write-off#Writedown>

[3] - <http://en.wikipedia.org/wiki/AQuantive>

[4] -
[http://www.pcworld.com/article/131991/microsoft_to_buy_aquan...](http://www.pcworld.com/article/131991/microsoft_to_buy_aquantive_for_6_billion.html)

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jmduke
The hubris in some of these comments are incredible. I'm no fan of Microsoft,
but wanton armchair criticisms aren't constructive in the least.

Microsoft has a great number of flaws, and "hurf durf Ballmer is a dunce"
doesn't really address any of them.

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dkhenry
This is more of an accounting trick then an actual problem. Normally a company
would write down a bad asset over a series of quarters to help drive good will
from investors. As MSFT is currently preforming very strongly I think they
chose this route (The quarterly loss) so that subsequent quarters when they
launch their new products , and more specifically the Microsoft surface. They
have good comparison numbers.

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CurtHagenlocher
Microsoft Corp. today announced quarterly revenue of $18.06 billion for the
quarter ended June 30, 2012. Operating income and loss per share for the
quarter were $192 million and $0.06 per share.

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ars
See also: <http://news.ycombinator.com/item?id=4267946>

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carsongross
I am become Steve Ballmer, the destroyer of companies...

Don't let the bean counters or sales guys run the company. Always the product
guy.

~~~
edwinnathaniel
Sounds like a cargo cult: always X, don't ever think of anything else.

~~~
antoko
I think that would just be cult.

<http://en.wikipedia.org/wiki/Cargo_cult>

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moron
It's weird to me that aQuantive is apparently not viewed as a massive failure
for MS, even though they paid billions in cash for it and it's now worthless.
But not only that, it was supposed to make them more competitive in a big
market and didn't do that at all. So from a lay perspective it seems like that
should be a disaster for Ballmer and probably others at MS, but it's being met
with an attitude of "yep, that happened, and it doesn't really mean anything".

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cubicle
[http://www.marketwatch.com/story/microsoft-performance-
expec...](http://www.marketwatch.com/story/microsoft-performance-expected-to-
be-strong-2012-07-18)

    
    
      Analysts surveyed by FactSet Research estimate Microsoft MSFT +0.91%  will 
      earn 62 cents a share on $18.2 billion in revenue, compared with a profit of 
      69 cents a share, on sales of $17.37 billion, in the same period a year ago. 
      
      [...]
      
      At Citigroup, analyst Walter Pritchard said that even with the huge 
      writedown, he expects Microsoft to report results in line with expectations. 
      Still, Pritchard said, in a research note, that there are “many moving pieces 
      in the numbers” from Microsoft, and that the prospects for Windows 8 will be 
      a big driver of how investors treat Microsoft over the next year.
      
      Microsoft shares rose 64 cents, or more than 2%, to $30.32 Wednesday, and the 
      stock is up by almost 17% since the start of the year. 
    

I can't comment myself, due to lack of information. We'll all see in four
hours.

~~~
brudgers
> _"Microsoft shares rose 64 cents"_

Thus, Ballmer became $213,281,913.60 richer.

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sabat
Steve Ballmer is a used car salesman cast in the role of a CEO. These are the
natural consequences.

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adventureful
It'll actually end up being a tax benefit while costing them no actual red
ink.

~~~
steve8918
No.

Writing down a loss on a purchased company is not a taxable benefit at all.
They are writing off goodwill and intangible assets which were acquired when
they purchased a company, and this has no tax consequences. Maybe if they
wrote off tangible assets, they could accelerate the depreciation, but it's
most likely that all of the write down is in goodwill and maybe intangible
assets.

~~~
_delirium
There are some cases in which you can write off intangible assets as
"abandoned", but it's complex. A brief bit discussed in these two articles:
<http://www.cbiz.com/page.asp?pid=8872>,
<http://www.cbiz.com/page.asp?pid=8984>

