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Microsoft's Ballmer On The Financial Crisis: "no company is immune"

     
3:29 pm on Sep 30, 2008 (gmt 0)

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Microsoft's Ballmer On The Global Financial Crisis: "no [reuters.com]company is immune"
Microsoft Chief Executive Steve Ballmer said on Tuesday the global financial crisis will sap consumer and business spending, affecting all companies, including his own.

"Financial issues are going to affect both business spending and consumer spending, and particularly ... spending by the financial services industry," Ballmer told reporters on the sidelines of a news conference in the Norwegian capital.

"We have a lot of business with the corporate sector as well as with the consumer sector and whatever happens economically will certainly effect itself on Microsoft," he told Reuters.

"I think one has to anticipate that no company is immune to these issues," he said, but declined to be more specific.

4:09 pm on Sept 30, 2008 (gmt 0)

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Does this mean Microsoft is going to ask for a $25 Billion bailout of their own? ;-)

Maybe they can cut back on those stupid vista commercials to save.

On a more serious note, I have some friends that were hired there a year ago, I sure hope it doesn't become last hired, first fired for them.

[edited by: amznVibe at 4:10 pm (utc) on Sep. 30, 2008]

4:15 pm on Sept 30, 2008 (gmt 0)

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Hopefully, all the corporations that had the resources to outsource to India, who pocket the difference between US and the miniscule wages they gave to the poor people over there, will go under and leave some breathing room for solid, debt-free small business to prosper and hire locally.

I'm not saying it lightly. I lost a lot in the market and 401k myself, but when a bubble gets ridiculous you need to pop it and rebuild with a solid foundation. Propping a credit bubble with more credit will not be the solution that the mainstream media are selling to us with their coterie of experts.

Journalism used to mean that people with different opinions come on TV to discuss all sides of an issue. Having devoured news shows yesterday, I felt like all the networks, the right and the left, were coming on like ad people selling their latest wares: The Bailout.

We need alternate opinions too.

4:33 pm on Sept 30, 2008 (gmt 0)

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To me it looks more like no executive is immune from the opportunity to shift blame for their companies performance.
4:56 pm on Sept 30, 2008 (gmt 0)

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Ballmer is a smart CEO, what he's saying is that since MS products are sold to every medium and large business, when "market" (i.e. engineered crisis) affects these it will also affect their spending on Microsoft products. Microsoft has always been good at projecting downshifts, and then beating estimates revised by these downshifts.

[edited by: bill at 2:21 am (utc) on Oct. 1, 2008]
[edit reason] no politics please [/edit]

5:39 pm on Sept 30, 2008 (gmt 0)

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Microsoft's revenues heavily depend on new computers purchased (which usually would have Windows pre-installed), during crisis such sales drop so Microsoft gets hit. In business segment with Office/Servers people will be inclined to use older versions that work fine or use Open Office and such.
3:13 am on Oct 1, 2008 (gmt 0)

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Don't forget that M$ will have seen an increase in revenue with people buying up XP before the end of sales - this will be reflected by the same people not making purchases now.
4:03 am on Oct 1, 2008 (gmt 0)

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"Hopefully, all the corporations that had the resources to outsource to India, who pocket the difference between US and the miniscule wages they gave to the poor people over there, will go under and leave some breathing room for solid, debt-free small business to prosper and hire locally. "

How will this solve the credit crisis caused by 'toxic mortgages' and high risk loans given to U.S. citizens?

Oh! I got it.. The loans were given because they did not have a job.. the job being shifted to India..

5:03 am on Oct 1, 2008 (gmt 0)

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This makes sense. Less earnings, harder to get funding...all translate into less advertising and IT spending
5:09 am on Oct 1, 2008 (gmt 0)

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How will this affect the resale value of computers? If cash is tight, are more purchasers going to be looking for refurbished systems?

If a company can sell on year-old machines which cost $1000 new for $600 rather than $400 then they may decide to replace hardware earlier.

8:56 am on Oct 1, 2008 (gmt 0)

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People are looking to the old fashioned principle of 'making good with what you have got'; a good thing in my view.

I expect IT repairs and upgrades to be quite popular, which is good for a business like mine.

I'm not sure about the near future of online marketing. Will small businesses see it as an effective means of advertising... a way of reducing their costs? Or will they focus on their traditional, tried and tested marketing where they are in their comfort zone?

10:59 am on Oct 1, 2008 (gmt 0)

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How will this affect the resale value of computers?

It will drop and I think pretty quickly - Intel and other manufacturers will have to offer very good deals on NEW hardware to tempt buyers, so old computers would look slow.

Noone is immune from this crisis, maybe apart from debt collectors :(

2:36 am on Oct 2, 2008 (gmt 0)

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Until markets are "normalized" and spending is under control in all quarters, everyone is going to take a hit. This "crisis" has been coming on since 1999...just took this long to pop.

Meanwhile, I make a few bucks keeping older systems humming and that's good for me and the clients.

11:09 am on Oct 2, 2008 (gmt 0)

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Is there any re-sale value in computers?

In my mind a 2 year old machine that cost say $700 is worthless after 2 years as a re-sale. Sure, it's worth something to the user but would you buy a 2 year old bog standard machine, and if you would what would you pay? Me, no more than $150, if that.