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Microsoft In Decline

 1:18 am on Oct 28, 2005 (gmt 0)

crn article [crn.com]

For the quarter ending Sept.30, MSN showed 1 percent year-over-year growth to $564 million. After being questioned by one financial analyst, however, executives confirmed that MSN revenues declined sequentially even as Google reported 15 percent growth, and Yahoo followed with 6 percent growth.

"Search advertising revenue has not been as strong as we'd like," said Scott Di Valerio, corporate vice president and chief accounting officer at Microsoft.

Aside from the new "Advertising Center, Microsoft is working to develop its algorithmic search capabilities and will integrate search into its desktop and server software, he said during the analyst call.



 1:29 am on Oct 28, 2005 (gmt 0)

Of course msn isn't making money, they can't even get the data center server farms to serve a query without crashing, what do they expect? If you can't get close to 100% success on delivering a result to a query like google and yahoo then you don't deserve to make any money.

Asking someone to create a huge data center running on windows is really mean, it's not fair to the techs and other guys who actually have to make the thing work, that's a case where eating your own dog food may end up costing ms a lot more than they realized.

MS needs to make an msunix so they can play with the big boys.


 5:02 am on Oct 28, 2005 (gmt 0)

Ahaha 2by4 nice post. I agree, MSN is really falling short -- all because of Microsoft and their lack of realization for the power of the web. They need to step up their game to keep up.


 9:17 pm on Oct 29, 2005 (gmt 0)

Today I did an msn search, that's saturday, off peak time, the first search took almost 3 seconds, when I reran it, it took almost 1.5 - 2.0 seconds.

The msn time to search given was 0.26 seconds, plus or minus 0.01 seconds for each repeated search, but there is some hangup in the first phase, pre processing the query that adds over 1 second to it.

At exactly the same time, the same search in google came back at 0.04 - 0.07 seconds, without the lag pre processing.

This is exactly the speed difference I'd expect to see between a well tuned *nix system and what is essentially an untunable windows server 2003 system.

But at least msn worked today, many weekends it just crashes with a database access error. MSN search is an internal project, with probably very little restriction on hardware, and if they can't get a datacenter server farm working....

This performance should be noted by anyone considering establishing a very processor and resource intensive project.


 6:21 pm on Oct 30, 2005 (gmt 0)

create a huge data center running on windows is really mean - Very funny.

I had expected this to beteh other way around Google declining and MSN thriving, if only because I assumed that MSN have the money and brain power. Not so.


 8:11 pm on Oct 30, 2005 (gmt 0)

there have been articles recently where major comp sci department job fairs have all the recruiters, and the booth everyone clusters around is google's, not MS's.

Everyone knows that working for MS is working for bill gates, and he's not a very nice guy to work for. And the one straw MS could hold out, stock options, isn't working since their prices stabilized, the options aren't worth anything, that means you're using the best years of your programming life to work for a straight salary on a boring product that doesn't let you do what you want.

MS has to pay to get its people, google has them lining up to work for them - they have to pay too, but the people actually want to work for google in the first place.

google loves the web, MS doesn't. Nothing can change that fundamental fact.

Lord Majestic

 9:18 pm on Oct 30, 2005 (gmt 0)

Everyone knows that working for MS is working for bill gates, and he's not a very nice guy to work for.

Do you know how many people who worked for BG became millionaires?


 10:04 pm on Oct 30, 2005 (gmt 0)

Yes, but the key word here is 'became'. That's back when MS stock was being split 2 for 1 every 6 months. I know some of those millionaires.

But with stocks stable, and not out of touch with reality, those types of option incentives no longer function.

People still become millionaires working for MS, but if you're the best in your class which would you choose? MS or Google. Google stock is unreally high, but compsci students are not known for their stock smarts, they just see the big numbers.

I'm not making this up, if I had the links I'd post them, it's easy to find the stories though, google is doing cool stuff, ms is doing boring corporate stuff, and they aren't even doing it well. Google is doing more interesting stuff, of interest to people into interesting stuff, that's the smart ones that is.

Just one instance, google is cherry picking ms talent, ms isn't getting google talent, look at which way the head hunting is flowing, it's completely obvious.

Lord Majestic

 10:44 pm on Oct 30, 2005 (gmt 0)

More than 4,000 of Microsoft's 27,000 employees already millionaires (Aug 1 2005 data). This pretty much answers the question whether its really bad to work for Bill Gates.

Its much safer to work for a company whose stock's valuation is reasonable rather than totally out of this world - Microsoft earns solid cash because people actually pay for its own products - Google is living on being an ad broker who is currently good at his job.


 11:02 pm on Oct 30, 2005 (gmt 0)

Oh, you don't have to convince me, it's the young comp sci graduates that are flocking to google that you have to talk to, I can't influence these guys at all.

A certain type of programmer is likely to join MS, and a slightly different kind is going to join google etc. And money isn't the main thing that interests all programmers, but that's the main thing that MS has to offer, that's one of their problems, they just don't do any 'cool' projects at all.

Oh, I missed your last comment, that's really too funny lord majestic, you've had your head in the sand the last 10 years I guess or something, MS earns it's ridiculous profits because it has a virtual stranglehold on the consumer and corporate desktop, and they didn't 'earn' that position.

A certain type of person is repulsed by this type of behavior, another type wants to cash in on it too. That's why MS is so ridiculously uncreative, they can't get the creative guys because they want to do creative interesting work. Believe what you want, doesn't matter to me.

Lord Majestic

 11:12 pm on Oct 30, 2005 (gmt 0)

you've had your head in the sand the last 10 years I guess or something

I doubt it - I've been watching Microsoft develop ever since I tried their first software: MS-DOS 3.3

MS earns it's ridiculous profits because it has a virtual stranglehold on the consumer and corporate desktop, and they didn't 'earn' that position.

They earned that position - it was not a lottery.

But as it always happens company that is on top for long gets complacent and loses out -- often fatally but Microsoft has shown ability to fight back and this would not have happened without Bill Gates.

I don't like to create idols -- be it Microsoft or Google as for us its better to have competition in the marketplace and if Google provides it then I welcome it, but I would not want the world where dominance of Microsoft would change to dominance of Google -- just look at threads with 1000+ posts every time Google makes an update, do you want to depend on one company THAT much? I don't. At least when Microsoft started releasing crap products like recent Office's I just did not upgrade and that was the end of it.


 7:38 am on Oct 31, 2005 (gmt 0)

"They earned that position"

Ok lord majestic, I'll have to end this discussion now, if you've been following that company for as long as you claim and actually believe this to be a true statement, no need to say anymore, you've said enough.

Lord Majestic

 1:17 pm on Oct 31, 2005 (gmt 0)

if you've been following that company for as long as you claim

My father told me about Bill Gates and Microsoft when I was 11 -- after that I read some books on computer history and Microsoft was already there - among pioneers like Lotus (RIP). This was in 1987 and back then Microsoft was nobody facing domination of IBM - if Microsoft did not earn its success then I don't know who.

We (non-hardware IT people) all owe Bill Gates for changing the world where prevailed IBM's view that only hardware was worth paying money for and software was free.

P.S. I neither work for Microsoft nor own their shares.


 1:50 pm on Oct 31, 2005 (gmt 0)

This is a fascinating topic. I think the key factor for me in all this is the Big Company Titanic syndrome. Particularly with a captain like Steve Ballmer, it's very tough for anyone to point out that there may be an iceberg ahead. When they were making lots of money, who would dare to question the way of doing business. Full steam ahead. It it ain't broke don't fix it.

If you're working all the time among gung-ho coworkers, it's very tough to be the devil's advocate. Robert Scoble has begun to open up the ears a little with the blogging movement within Microsoft. However it's tough to turn a ship like the Titanic. Unless Bill Gates decides that there really is an iceberg ahead, Microsoft is due to go through some very hazardous times.

Lord Majestic

 3:19 pm on Oct 31, 2005 (gmt 0)

When they were making lots of money

They still make lots of money - but I have to say that they really run out of idea with Office because personally I still prefer good old Office 97 and see no reason to upgrade (but then again I don't use office much anyway).

From OS point of view however Microsoft made very good effort in moving from 16 to 32 bits and Windows XP is good enough for desktop use, server side is another issue but they never made much money from that anyway.


 8:54 pm on Oct 31, 2005 (gmt 0)

Microsoft is in a bit of a stall, I'd say at the moment, but some big things are on the horizon.

1.) Vista - New OS is always a huge deal for MS. True 64bit processing amonng other things.

2.) Xbox360 - Their entertainment division has been making some inroads in a tough market to go at. 360 has the Christmas season to itself as far as new hardware/toy. They could easily sell out retailer stock before Dec if right press catches hold of the right games. Xbox360 may be come the default "Killer App" for the 1080i HDTV owners.

3.) MSN AdCenter - I'm impressed with MSN's ad interface so far and I think with some tweaks and improvements, it could be close to AdWords in most areas and even better in a few others. Do not underestimate MS's ability to infuse their MSN search into every product they own. They are threatened by Google and many companies that they have been threatened by now lay in their wake.

Point is, MS sucks for some people, but do not undersell these guys. They've made alot of money in the past 20 years and I see no reason to believe they have any intention of stopping.


 8:02 pm on Nov 1, 2005 (gmt 0)

Netscape was the last major company Microsoft was able to crush by virtue of leveraging their monopoly; remember when Netscape had 90% marketshare for browsers and then MSFT gave it away for free (including forcing OEM's like Dell, HP and others to include IE)?. Since then the DOJ has opened and closed its case against MSFT and lest people forget, MSFT was found guilty. As a direct result of their being convicted, MSFT has had to cease and desist in its anticompetitive monopoly leverage strategy and guess what - the stock has been stuck ever since.

Whether you made or lost money competing or working for MSFT over the last ten years - those are the facts. Relative to its pre-Netscape self, MSFT as a growth company is OVER.

Lord Majestic

 8:09 pm on Nov 1, 2005 (gmt 0)

MSFT has had to cease and desist in its anticompetitive monopoly leverage strategy and guess what - the stock has been stuck ever since.

Stocks of most IT companies crashed down and Microsoft's is actually not doing too badly at all.


 5:15 am on Nov 4, 2005 (gmt 0)

It's been flat for quite some time now and judging by the valuation, nobody expects any growth anytime soon. If they started paying dividends, it might be a place to park some cash, but you're probably better off putting your money in a CD than buying Microsoft stock now.

Google is the hydra with many heads that will eventually start taking $$$ out of Microsofts pockets if Microsoft doesn't change its ways. It's just a matter how how fast Microsoft can become an innovator again, how fast they can change the way they do business and when they will grok the net.

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