“Under pressure from Microsoft Corp. investors to return a portion of the company’s $35 billion cash reserve and revive a flagging share price, Chief Executive Steve Ballmer Wednesday defended the company’s ‘first-class problem’ of having too much cash,” Reuters reports. “Ballmer, speaking to investors at the Sanford C. Bernstein Strategic Decisions conference, said Microsoft prefers to have the cash on hand in order to take risks on new technology and other things important to the company’s operations.”
“Microsoft surprised investors in late April by announcing that it would sacrifice billions in profit next year to invest in new business areas. Analysts estimated that the company planned to spend $2 billion more than initial forecasts. The share price fell on the news, marking the latest decline for a stock that has underperformed every major U.S. equity index since the start of 2002,” Reuters reports. “Shares of Microsoft (up $0.10 to $23.25) rose in early trade on the Nasdaq. The shares are down 11 percent since the start of 2006.”
Full article here.
MacDailyNews Take: Just how much are towels, anyway? What are they spun gold? Seriously, it’s smart to keep a strong cash reserve for investments, but $35 billion? On the other hand, with bloated Microsoft’s obvious inefficiencies, even $35 billion might not be enough. Microsoft’s true “first-class problem” is the sales guy in the corner office who’s responsible for a stock chart that’s been flatlined for years. Hopefully, he stays as Microsoft’s CEO for as long as it takes.
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should be doing something productive…
This does not have anything to do with this post, but I just found this and I almost kill my self
http://www.engadget.com/2006/05/31/dell-xps-m2010-gets-official
this is just sad
MDN – Do all Ballmer articles have to feature that picture.
Please, I’m eating.
“MDN Edit: Ballmer photo removed out of concern for duper’s lunch… and we don’t want to scare the children, either”
I really:
Still you have to admire Dell’s design flair…
no wait.. not admire.. uh.. dammit, what’s the word…
Oh yes… ridicule.
That’s it.
Obvious
LOL
hahahaha
Ballmer tried to use that picture of himself to get a big part in slither!
Apparently they decided not to cast him as he was more horrific than the bugs and would take away all the limelight.
Picked up a nick name though – ‘old slither lips’
Leo
Can’t give up any of it. Not gonna happen.
Every penny of that reserve is necessary for Bill Gates to take his weekly “money bath” treatment in his “money room” at the specially-built “money spa” made entirely of $100 bills molded and glued into construction materials.
Translation from Ballmerese:
Since we can’t make a product that anyone in his/her right mind would ever buy, we need that cash on hand to buy out those companies that understand what innovation truly means, to pay our partners (SCO) to file frivilous lawsuits to spread FUD, to make campaigh contributions (AKA bribes) to the GOP to avoid monopoly penalties, and to try to usurp standards organizations to make sure that they toe the Microsoft party line.
Why does Ballmer need to keep so much cash?
Because he’s is scared.
He knows MS stopped innovating years ago and Office, Vista, .NET, etc are stagnant products.
What’s next from MS?
They need to wait for companies like Apple to innovate so they can copy. Ballmer knows this business model will eventually crash but if they have enough cash, they might be able to buy themselves out of extinction.
It takes cash to replace broken office chairs.
Yeah they better keep those 35 billions safe. The XBOX alone costed M$ 6 billions (that was the first machine).
Sounds like 35 billions COULD go away fast :/
The cash will go to entrepreneurs savvy enough to sell their businesses for cash and not Microshit stock. The businesses will eventually falter after they are Microshafted…er, infiltrated by the kings of bloat. The entrepreneurs will quit and retire, spending a large amount of cash to keep the IRS off their backs. Lawyers and tax accountants will make a killing. Customers will get shafted.
All is well.
Obviously throwing money at Vista has no effect, so they might as well “give it back to the shareholders”.
Actually Apple isn’t doing too bad on their cash stash either. As a small business owner who would love to have a nice cash stash (even if it was only in the “thousands”) I can see that it is a great advantage for both Apple and MS: It gives them a time to rids out down cycles in the economy (which do happen), allows for acquisitions now and then, plus is a great backup for R&D projects that suddenly pop up and have a great potential.
OSxDude –
Thanks (i think) for that link to Dell’s iMac-esq disaster.
I was just at North Park Mall in Dallas where an Apple store opened in April and the Dell store is underconstruction just across the hall. I can’t wait to see that shimmering piece of Dell crap across the way from the Mac Pro and Leopard later this year when it opens!
Use the money to widen Highway 520 and build a new Lake Washington bridge. This is the road that Microsofties clog every morning and evning commuting from Seattle to Redmond. The better transit infrastructure will help non-Microsoft drivers get to their jobs and innovate non-Microsoft products and pimp Microsoft talent. Gates OWES Seattle a new bridge.
I’d buy MSFT shares today if I thought that fat turd Ballmer was seriously considering taking that $35 bn and paying a dividend to the shareholders. Only in tech would a company get away with having a cash reserve that was equal to a fifth of it’s market cap. I can’t believe that no corporate raider has made a bid to buy the company and take it private. As much as MSFT sucks, it still spins cash, and definitely needs new management.
me-
for real I don’t know what that heck is dell thinking
amyblue.net
You know I’ve been watching you guys
The reason we purposely kept our stock down is because many of our employees have stock options. We are losing people left and right because they do just enough to milk the system and cash out.
I have implemented a 10% employee reduction program to weed out the non-performers and get this company I love to be more productive.
I wouldn’t be dissing us, you’ll be coming over to the “dark side” shortly.
Muhahalalala
OS X dude.. that looks a lot like Apple’s 20th ann Mac…
Don’t forget that interstellar travel is also very expensive. Here’s a
” rel=”nofollow”>candid shot of Gates and Ballmer coming back from a recent excursion.
“He knows MS stopped innovating years ago and Office, Vista, .NET, etc are stagnant products.
What’s next from MS?”
Microsoft brand heroin in the form of Flinstones Chewables.
me – LOL! What Dell moron made the strategic decision to open across from an Apple Store? That guy/gal should be fired! If Dell had any brains they’d be at the other end of the mall where their customers couldn’t see throngs of happy people walking out with the actual product. You gotta video tape that and post it to YouTube!
About a year-and-a-half ago I recall Microsoft employees wanting a portion of Microsoft’s then enormous profits in the form of good pay raises. In response, Steve Ballmer told the employees that the money belonged to the shareholders. His recent reply to the shareholders wanting a cash return doesn’t surprise me – anything to keep the money in his grasp.