Microsoft profit miss may be latest blow to company morale

“Microsoft Corp.’s share price may not be the only casualty of the software powerhouse’s surprise earnings miss. It might also hit company morale, becoming the latest gripe of employees who are already disillusioned with product delays and a once high-flying stock that has stagnated for the past three years, analysts said,” Scott Hillis reports for Reuters. “‘There are some folks who have been there for a long time and who will resent the way things are being run as a bureaucracy. And maybe they were there for the big stock run-up and they’re seeing the stock not move now,’ said Matt Rosoff, analyst with Directions on Microsoft. ‘If you think things are not being run well, then yesterday will lend credence to your arguments,’ Rosoff said.”

“Microsoft shares tumbled 11.4 percent to $24.15 on Friday, their biggest one-day drop in 5 years, a day after the company said earnings would be hurt by increased spending to stay abreast of competition such as Google Inc.,” Hillis reports. “A company spokesman had no immediate comment on employee morale. Investors treated the move as the latest stumble by the Redmond, Washington-based company, which last month said it would delay the release of the next versions of its cash-spinning Windows operating system and Office software package. Minimsft, a popular blog run by a Microsoft employee who advocates a drastic slimming-down of the company, lamented the results, exclaiming: ‘Yee-ouch! Right in the kisser!’ Wryly remarking on the idea that Microsoft could eventually pull out of the doldrums, the anonymous author wrote: ‘It is always just a few quarters out. For what, the last five years?'”

Full article here.

MacDailyNews Take: Schadenfreude… too… intense… here… quote…

How are monopolies lost? Think about it. Who usually ends up running the show? The sales guy… Look at Microsoft, who’s running Microsoft? Right, the sales guy. Case closed. – Steve Jobs, October 12, 2004 (source)

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55 Comments

  1. I know this will sound like blashphemy on this Mac site, but Microsoft is far from dead.

    In fact what I read, Microsoft is gearing up for a major offensive and marketing blitz for X-Box and Vista. So buying the stock might be a good investment right now.

  2. How times change!

    Back on the 5th September 2004, when I started keeping track of such things, Apple had a market cap equivalent to around 4.57% of MSFT’s $292 billion.

    Now, 600 days later, that figure has changed so that Apple’s valuation of $59.73 billion represents 23.93% of MSFT’s plummeting $249 billion price (it’s worth noting that, as recently as 9/12/05, MSFT had recovered earlier losses and was back at $296 billion).

    How long before we can start to use the word “beleagured” in connection with Dancing Monkey Boy’s jack-of-all-trades empire?

  3. “In fact what I read, Microsoft is gearing up for a major offensive and marketing blitz for X-Box and Vista. So buying the stock might be a good investment right now.”

    Ok, no doubt that is true. That will bring in some “true believers” to buy X-Boxes and Vista. Maybe lots, which will mean lots of dollars for Microsoft.

    But the first thing that popped into my head was my experience of a few years in real estate.

    Seller insists that his house is worth 20% more than what a very detailed market analysis shows it could probably sell for.

    I show him the evidence of that, but he insists and since I don’t want to lose the listing, I agree (my out of pocket expenses) to advertise the house for the amount that he insists upon.

    Guess what happens. The number of phone calls about the house continues continue to decrease in spite of the advertising blitz.

    In spite of? Maybe not. As I told him, since we advertised the house at 20% higher than market value, EVERYBODY knows we are trying to sell an overpriced house! Big Surprise! Moved the price to comparable houses in the neighborhood and sold it in a week. Customer now happy but burned up a month on the calendar.

    It pays to advertise a good product.

    What does that say about the “not so good” product? Might make the meter jump a little, but have to question what Vista ads will do compared to what they could do if the public thought it was a great product, but the evidence indicates that they probably won’t given the previous history of Windows. Kids, and “adult” kids love XBox, so it will work for that.

    It will be interesting

  4. I made my bet — the biggest bet by far that I have ever made — on AAPL a long time ago, based on Steve Jobs vision and unrelenting character. It has paid off. And I am convinced that this is just the start of Apple’s rise. I could be wrong, not being a fatalist. But Microsoft’s incompetence at anything creative was also part of my confidence that Apple could eventually prevail.

    The MS death spiral is now becoming obvious to even the dull normal IQs out there.

  5. Moved the price to comparable houses in the neighborhood and sold it in a week. Customer now happy but burned up a month on the calendar.

    A month and a few thousand wasted to take a chance at up to 20% more profit chance seems like a wise decision to me, some wait years.

    Should have a clause in your contract to minimize your loses though.

  6. 1. Longhorn rots.
    2. Vista dismantled, disemboweled, and delayed (again and again).
    3. Internet Explorer barely better.
    4. Origami flopped.
    5. Future expectations? Ambiguous at best, dismal at worst.

    Xbox stands as the lone survivor of Microsoft products. The mess at Microsoft is due to failed leadership. Don’t be surprised if shareholders demand a cull of top executives.

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