back to article Microsoft posts first-ever quarterly loss

As was widely expected, Microsoft announced a loss of $0.06 per share for the fourth quarter, ended in June, which marks the first time the software giant has posted a quarterly loss in the 26 years it has been a public company. Most of that drop is attributable to a previously announced $6.2bn charge that resulted from …

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  1. Anonymous Coward
    Thumb Up

    Just like Google and Apple, I hate 'em, but soooooo glad I bought stock in 'em.....

    1. bdam
      Facepalm

      Well, they'll have to up the $5 per handset they extort from Android manufacturers then - after all, it's their only meaningful contribution to the mobile industry.

      1. Anonymous Coward
        Anonymous Coward

        FAT32 is the reason and it is a sort of lowest common denominator in terms of disk filesystems.

        Why not propose something different?

        1. bdam
          Pint

          Actually Mr Coward you have a point. Why can't Android use ext2/3/4 whatever? Its already using linux so technically this should be a cinch. If all access to it is done via a service layer then it's just the interface which conforms the the FAT32 API - and whoopie dee, didn't Oracle just "clear up" the confusion over whether API's could be copyrighted or not for us all last month?

          1. Anonymous Coward
            Anonymous Coward

            Can you USB mount EXT from Windows?

            I think you can but not easy. Same reason USB flash drives come with FAT32...

            Doesn't the FAT32 patent expire next year?

  2. Anonymous Coward
    Windows

    People lose faith

    I think that covers it.

    Personally I like working with both Win7 & Office 2010. I also think that adding Server 2003 into the mixture gives a pretty solid environment.

    But would I have any shares of Microsoft I too would have sold them as soon as possible after the Office previews came about.

    And before anyone goes off with: investments... (which by itself is a very reasonable point). Don't forget that a loss means it outweighs any foreseen investments + incoming profits (which is also a variable factor by itself). Unfair context but you could also reason that MS didn't get as much income as they anticipated.

    My point being: if this were due to investments it would still indicate very poor leadership because you'd normally anticipate for that.

    The more this story develops the more to I start to think we may see very drastic developments in the upcoming future.

    Something I'm personally not looking forward to but heck... Their loss.

  3. Combat Wombat
    Facepalm

    The hits will..

    Keep on coming.

    This is just the start of a whole heap of bad decisions coming home to roost.

    Can we please sack Ballmer ?

    The giant sweaty monkey has to go

    1. Trevor_Pott Gold badge

      Re: The hits will..

      What if they sack Ballmer, only to put Sinofsky in charge. To you want that? Really?

      1. Anonymous Coward
        Anonymous Coward

        Re: The hits will..

        I would say that Kevin Turner, COO, is next in line if Ballmer is out. Kevin Turner is one of the Wal-Mart crew with Randy Mott that rose the rising tide with Wal-Mart and for some reason people think he knows what he is talking about.

        1. Anonymous Coward
          Anonymous Coward

          Re: The hits will..

          A Wal-Mart guy in charge of Microsoft? Yes please, if only to hasten the demise of MSFT.

          I vote for Kevin Turner to be Steve Ballmer's successor.

  4. Ole Juul

    Bad data

    Redmond says . . . that 50 per cent of desktop PCs worldwide now run Windows 7.

    Just looking around my neighbourhood, most non-professional users are indeed using some form of MS-Windows. However, some use XP, most are still on Vista, and a couple bought computers recently which are running Win7. Whatever Microsoft does well, gathering realistic information isn't one of them.

    1. Anonymous Coward
      WTF?

      Re: Bad data

      Well looking around here,all 30 pc's are running W7 and 85% of the 3000 other machines are as well.

      Still, I bow to your superior knowledge.

      1. Ole Juul

        Re: Bad data

        What knowledge? I'm simply basing my comment on what I see regular people using. What you are referring to is no doubt correct in most work environments. Just because you and I use computers all day, doesn't mean that most people do. My point is that many more people have computers at home than at work, and all those computers in people's homes are not updated frequently and from what I can see are quite old by IT standards. A large (probably the largest) proportion of people don't work in an office or otherwise use computers at work. I suggest that MS is only "measuring" office or business computers.

    2. John Burton

      Re: Bad data

      And all a-few-thousand pcs in this building are running windows 7 ...

    3. Greg J Preece

      Re: Bad data

      Clearly your neighbourhood == the whole world.

    4. Anonymous Coward
      Anonymous Coward

      Re: Bad data

      Yes, because you looking round your mate's PCs produces a larger and more accurate set of data than the breakdown of OS versions that access, say, windows update every month. What's the best selling car in the UK? Can you see what your next door neighbour has?

  5. toadwarrior

    They better get around to paying that EU fine before things get any worse.

  6. Big_Ted
    Paris Hilton

    I may be a bit simpole here but.....

    [QUOTE]In addition, Microsoft says it has another $540m in revenue related to the Windows 8 Upgrade program that must be deferred until next quarter, once the company has actually shipped customers the upgrades.[/QUOTE]

    How have they got $540m from a product that is yet to be released and is available in consumer release for free ?

    Are people so desperate to get it or are they assuming that everyone who is running it now will upgrade for $39.99 a pop ?

    1. Richard Cartledge

      Re: I may be a bit simpole here but.....

      Ongoing annual contracts I presume.

      1. Khaptain

        Re: I may be a bit simple here but.....

        It can't be the annual contracts as Windows 8 is not yet available even to the corporates.

        Maybe it's just an internal budget thing whereby they were alloted 2 Billion for the dev and only used 1.5.

        I agree it's kinda strange ....

    2. AceRimmer

      Re: I may be a bit simpole here but.....

      There will be plenty of hardware vendors who will have already paid for Windows 8 licenses, ready to be able to sell those licenses with brand new PCs and laptops.

      Since Microsoft have not yet delivered Windows 8, that income cannot be declared as profit until delivery has actually been made; hence the fact its been deferred

    3. sleepy

      Re: I may be a bit simpole here but.....

      MS does this with every Windows upgrade. It enables them to claim enormous immediate sales of the new release, and in fact engineer more or less whatever initial sales figure they want.

      It's based on US accounting regulations that say you can't recognise sales until you have made ALL the deliverables available to the customer. So those Windows 7 licences OEM's are buying in the usual huge quantities (or quite possibly more, because of the threat Windows 7 might not be available at the current price for very long), include a free upgrade to Windows 8. And because Windows 8 is a not yet available deliverable, MS is not recognising the sales until after W8 can be downloaded. So it's not really a Windows 7 OEM sale is it? It's a Windows 8 sale that is not currently deliverable, but has the right to use Windows 7 meantime.

      And that's how MS can say to the world "our most successful Windows launch ever". It's a monopoly, and they simply relabel a suitable bunch of sales of the old version to look like the world eagerly CHOOSING the new product.

      So when, in due course, MS brags about the incredibly successful launch, you'll know their claims are entirely meaningless, won't you? You didn't think MS could afford to take a RISK with a Windows release did you?

  7. This post has been deleted by a moderator

    1. TheOtherHobbes

      Re: the dinosaur is staggering

      Outside of the Geekville city limits Linux on the desktop is a joke. When some of the lappy companies offered it, no one wanted it.

      Unfortunately for MS, Win 8 is also a joke. Most people will stick with Win 7.

      I agree with the rest. MS has no direction now, and almost everything Ballmer touches turns to crap. Me-too catch-up won't keep MS alive for long.

      Momentum and cash reserves will keep the party going for a while. But neither are infinite.

      1. Anonymous Coward
        Anonymous Coward

        "When some of the lappy companies offered it, no one wanted it"

        I always take a look at those offers, but every time I look I find it's cheaper to get a Windows laptop and install Linux myself.

      2. Keep Refrigerated
        Angel

        Re: "Outside of the Geekville city limits Linux on the desktop is a joke".

        You're right...

        That's why I'm always laughing when come the end of the day, I pause any Windows VM I'm running and shut down my work laptop running Ubuntu.

        Then I turn and watch my exasperated colleague (who has to get the train) freak out because his Windows laptop has X amount of updates to do: "Please do not power off or unplug your machine..." This seems to happen at least once every week.

        1. Anonymous Coward
          Anonymous Coward

          Re: "Outside of the Geekville city limits Linux on the desktop is a joke".

          So... you run Windows then? And obviously you've paid for it then? You know, since you have to pay for licences even for VM's. Microsoft couldn't really give two shits what you do with it, so long as you've paid for it.

          1. Silverburn

            Re: "Outside of the Geekville city limits Linux on the desktop is a joke".

            Being a boring spreadsheet company is no bad thing...

            ...if you can make a spreadsheet people actually want, isn't a bloated PoS, and has an even remotely usable interface.

          2. Keep Refrigerated
            Facepalm

            Re: @AC 09:44

            No idea how your reply is related to my comment, but the clue was in the keywords "work laptop". Personally I paid £0 for the license.

            To answer you're other question, It's not technically an VM... it's a physically separate partition accessed via a VM - no idea what Microsoft classifies this as but I get the job done and get out in time. Downvote away...

            1. Anonymous Coward
              Anonymous Coward

              Re: @AC 09:44

              Als... Do you have some sort of Magic OS in your Windows VM that doesn't need updating, otherwise you'll still need to go through the update at some point.

              1. Keep Refrigerated
                Unhappy

                Re: @AC 12:22

                I'd have thought it obvious that I fire up the VM at a more convenient time and let it update...

                Of course the joke starts to get lost if I try to deconstruct it any further. I suppose in that sense I've already failed in trying to defend it.

        2. Medium Dave
          Thumb Down

          Re: "Outside of the Geekville city limits Linux on the desktop is a joke".

          "I turn and watch my exasperated colleague (who has to get the train) freak out because his Windows laptop has X amount of updates to do"

          So rather than tell him how to hibernate Windows, you laugh at him? Nice.

          There's a word for people like you but I don't think i would get past the mods, even on El Reg.

          1. This post has been deleted by its author

          2. Keep Refrigerated
            WTF?

            Re: @Medium Dave

            Hey... the clue is in "pause my VM" - personally I never use hibernate. However I've shown him my setup a number of times... he doesn't seem interested, most people aren't. Somehow the promises of greater efficiency and reliability are not enough of a pull.

            I'm amazed at how you've managed to extrapolate such knowledge of who I am from one comment, though without even reading it.

            For the other downvoters, I was making a lighthearted comeback to a snarky comment about Linux on the desktop... no need for the intense hate.

            So far I've even resisted the urge to remark on how many Windows fanboys are here today...

            1. Medium Dave

              Re: @Medium Dave

              Not everybody needs or wants to use VMs. I'm currently running Chakra Linux with XP, W7 and Ubuntu VMs but it's not a setup I'd recomend to anyone who doesn't need it - it's heavy on the drives, takes ages to keep them all updated and tuned and needs a bucketful of memory. I don't file these under "greater efficiency and reliability", I file them under "PITA but useful for work" (besides, flicking between XP and W7 VMs on a desktop cube looks cool).

              Your collegue would do much better to hook hibernate up to the lid close so he can do a quick bunk at beer o'clock. You'll both have update Windows at some point, then he can laugh at you while you also update Ubuntu.

        3. durbans

          Re: "Outside of the Geekville city limits Linux on the desktop is a joke".

          "This seems to happen at least once every week."

          That's a bit odd (or untrue) considering that MS only release updates once a month.

    2. Anonymous Coward
      Anonymous Coward

      Re: the dinosaur is staggering

      Vunerable? We made more money last year, and sold more licenses than we have ever done before. Desktop declined a whopping 1%, which you would expect in the year before a new version. Server and tools just keeps flying on up though. Must be all those developers who dislike us eh? The $6 bill is an accounting decision. It probably could have been written off overtime, but when you have had such a stellar year it sometimes pays to take the hit upfront.....

    3. Anonymous Coward
      Anonymous Coward

      Re: the dinosaur is staggering

      I wonder what you would have found if you'd expended any energies into finding out where MS is successful?

      It's like the end of Animal farm: "MS bad, Linux good."

      Well, I've got news for you, it's much more nuanced than that Linux is great at some things, it sucks at others, MS are great at some things, they suck at others.

      As for Bill Gates being the least visionary person in computing. Yes, if your vision was "A computer on every desktop" he's done that so there is no more vision, now he'll just have to stick with pesky "end to malaria" type visions.

      1. AceRimmer

        Re: the dinosaur is staggering

        It's like the end of Animal farm: "MS bad, Linux good."

        The real end of Freeware Farm

        All distros are equal but some are more equal than others

    4. Anonymous Coward
      Anonymous Coward

      Re: the dinosaur is staggering

      Bill was at least a geek and knew what he was doing. Ballmer is a numbers droid.

    5. Schultz

      Re: the dinosaur is staggering

      Indeed, the dinosaur is staggering, but you missed the big issue:

      MS managed to post a loss despite record (and quite mind-boggling) earnings. So they manage to spend money faster than it's coming in, even though it's coming in quite fast. What if one of their big earners stumbles, e.g., because world and dog decides that they can live without the newest version of MS Office?

    6. John Brookes

      Re: the dinosaur is staggering

      I'm more than happy to slate MS for a lot of things, but it's more than a little harsh - not to mention wildly inaccurate - to say Redmond ruined Nokia, don't you think?

    7. Anonymous Coward
      Anonymous Coward

      Re: the dinosaur is staggering

      @Eadon. A long list those 18 points but this isn't GCSE Business Analysis so I won't award a grade E. You ought to re-read what you've written and consider how much is relevant, how much is opinion or wishful thinking, and how better to express what you are trying to say.

      Large businesses such as Amazon, Apple, Google, IBM, Oracle, SAP all have challenges to remain relevant and its equally possible to draw up a list of negatives for each.

      Possibly the low point for Microsoft was the attempt to buy Yahoo! at a highly inflated valuation. If Microsoft has moved away from that crazy acquisition phase paying stupid money for Danger etc. their financials are diverse and continue to look fine. All this quarter shows is the effect of the foolish acquisition of aQuantive.

      1. Wibble
        Angel

        Re: the dinosaur is staggering

        @AC: 10:41

        What's a grown-up doing in here? Get out now before we taunt you some more...

  8. Shagbag

    "Most of that drop is attributable to a previously announced $6.2bn charge that resulted from Redmond's botched acquisition of online ad service aQuantive."

    So they paid too much for it. How embarassing and now its official: Microsoft are losing money for their shareholders.

  9. Mage Silver badge
    Alert

    Past the peak

    No one needs Win7, it's just a default OS and a Vista Service pack

    Upgrades to MS office are increasingly pointless.

    You can be as productive on Office 2003 and XP.

    Desktop Linux still is not quite right, but MS determined to make Win 8 as rubbish as possible.

    Many people just using Internet or could use Open Office.

    Most future MS Windows and Office will only be "pre-installed". They are in slow decline. If Apple brings out a 1/2 price Mac Book/Mac Air running iOS on ARM (They'll never call it an iPad + keyboard but that's what it will be) then MS is looking at rapid decline as their own systems have poor legacy compatibility and a minority need it.

    1. turnip handler
      Windows

      Re: Past the peak

      "You can be as productive on Office 2003 and XP."

      I used to think the same until I actually started working with Win7 and Office 2010. Vista and Office 2007 were ok but an annoyance - the ribbon on Office 2007 didn't quite work as promised and I still find now that I struggle to work well on Word 2007.

      However - Office 2010 really seems to have got it right the Ribbon has been in improved in little ways, File menu for example, and to me those little changes that make applications easier to use are what it has made a big difference to actual productivity. In terms of nice little basics in Win7 then windows snapping to half the screen and the screen grab tool make everyday tasks much easier than in XP / Vista.

      In XP I have to have little applications installed to perform these tasks and in my corporate environment I'm not allowed to install those anyway. Building basic helpful tasks into the OS really helps productivity.

      And for any accountant out there, Excel with more rows than the 66k limit definitly helps productivity.

    2. durbans

      Re: Past the peak

      You've managed to completely contradict yourself there...

      "You can be as productive on Office 2003 and XP."

      "MS is looking at rapid decline as their own systems have poor legacy compatibility and a minority need it."

      Office 2003 and XP are legacy systems so these 2 statements are in direct contradiction....and I and most people (except those who cannot deal with change) will tell you that Win 7 and Office 2010 give you a big productivity boost.

      Also, have you used Win 8? If not, you can't pass comment on how 'rubbish' they are trying to make it.

    3. Arctic fox
      Thumb Down

      Re: Past the peak

      When you have woken up and stopped enjoying that lovely daydream do post again with something more closely in orbit around Planet Reality.

  10. Anonymous Coward
    Anonymous Coward

    RIP

    GOOD BYE TO BAD EGGS

    1. Tom Maddox Silver badge
      Holmes

      Re: RIP

      Big Dumb Guy 555, is that you?

  11. Andus McCoatover
    Linux

    Can't see what the fuss is all about...

    Given the current economic climate, it's absolutely nothing, except a write-down of a couple of 'misadventures'. Microsoft's still doing fine. Blip on the radar, that's about it.

    Even Nokia did (relatively) OK yesterday, and I predicted a total disaster - I was wrong.

    1. Anonymous Coward
      Anonymous Coward

      Re: Can't see what the fuss is all about...

      Sure, it's not total meltdown, but it's a bit worrying nevertheless, given that Microsoft makes such vast amounts of its money from corporate inertia. What it may mean is that a lot of corporates have made an *active* decision not to buy this quarter, and they've got to change their minds next quarter, which is never promising when you're talking about inertia.

      As for Nokia, it may or may not be a total disaster, depending on whether Elop decides to make it clear on whether that 4m figure is units sold, or just units shipped.

      1. AceRimmer

        Re: Can't see what the fuss is all about...

        Did you actually read the article?

        The loss is due to other factors. Sales and income remain strong

        As pointed out, this is their first loss in 26 years. Plenty of companies can make a loss, some even make a loss year after year, get bailed out by their biggest competitor and then come back to become huge.

        1. druck Silver badge
          Mushroom

          Re: Can't see what the fuss is all about...

          It's not because of a trading loss in difficult times, it is the wholesale destruction of asset values.

          Aquantive bought for £6.2bn, written down for $6.1bn - 98.4% of the value destroyed in five years.

          That's faster than free-fall in a vacuum.

          1. Anonymous Coward
            Anonymous Coward

            Re: Can't see what the fuss is all about...

            Eflop has managed to lose more in a shorter time at NOK, amazingly enough.

    2. Arctic fox
      Happy

      Re: Can't see what the fuss is all about...

      Never admit you were mistaken. Just do what several others do and remember that "posting as a AC means never having to say you are sorry" -:P. No, on a more serious note, I agree with you. MS made a poor purchase in 2007 and they have decided for accounting reasons to take the whole hit now. The background figures give a wholly different picture from the headline. Nokia, well the figures are not as poor as the market had been expecting and indeed their share price rose (a bit) on the news. However, the reality is that we will not know one way or the other before we see how the Finns do with WP8 - they screw up then its game over. I hope they do not because whatever certain howlers and haters might opine because of whom Nokia is allied with, Nokia going tits up would be a loss for us all regardless of whose phone/os we prefer.

      1. Philip Lewis
        FAIL

        Re: Can't see what the fuss is all about...

        NOK is already lost, and the engineering staff decimated. Nokia can no longer engineer very much at all, sadly, and those engineers are never going to be re-employed because the "vision" for NOK does not include them being an engineering company.

        NOKs "smart phone" strategy is dependent on MS and WP8, and since the customers for smart phones are in fact the carriers, this poses one very serious problem. MS and WP8 are "Typhoid Annie" for the carriers, and they won't touch it. WP8 is not going anywhere except down the tubes, because the channel has rejected it. Elop (and by extension NOK) is about as popular with the carriers as a pork chop in a synagogue, and nothing much he has said or done is likely to alter that.

  12. Keith 72

    bing's RSS desktop theme is a much appreciated waste of money!

    Their photo's are so good, I feel embarrassed every time I pick up my camera. But obviously, they're not going to make any money on them and I doubt that they work terribly well at advertising their search engine.

    1. lurker

      Re: bing's RSS desktop theme is a much appreciated waste of money!

      They have a search engine? Wow, I should google that.

      1. This post has been deleted by its author

  13. bdam
    FAIL

    Not so fast - it's just some script kiddie wrapper, because everyone knows Microsoft’s Bing uses Google search results—and denies it: http://goo.gl/1qsuo

    1. Anonymous Coward
      Anonymous Coward

      No, wrong...

      Someone at Google managed to engineer the Bing toolbar into making it look like the results from Google was used by Bing. The high level of what happens is:

      Bing toolbar looks to see what people search for

      Bing toolbar observes what they visit after they have done a search

      This info is fed back to MS/Bing

      If there are very obscure searches (ie: Bing has no results for them and they've never been searched for before) they get added to bing right up the top of the results list (because there are no existing results.)

      All this data are collected from the URL history, not from any specific search engine.

      This means that if you have access to the back end of search engine X, you can game Bing toolbar to get results into bing. The results from that search engine haven't been copied, the user's behavior after a search has been observed.

      If you think that Google don't do something pretty similar, if not the same, you've got another think coming.

      1. bdam
        FAIL

        Re: No, wrong...

        But Mr Coward, "However you define copying, the bottom line is, these Bing results came directly from Google."

        1. Anonymous Coward
          Anonymous Coward

          Re: No, wrong...

          No, the Bing results come from the behavior of the person visiting Google. Google is not at any time accessed by Bing, MS or anyone related to them, the results are obtained from observing the URLs that the Bing tool bar sees. Google gamed Bing, in order to make it look like they are copying Google. What they've done is visited results from a Google search (manipulated because they have access to the back end of Google) to show pages which weren't previously picked up by Google or Bing. The Bing toolbar sees that this new page has been visited and then, a week or so later, adds it to the Bing search results.

          Google are bang out of order by suggesting that Bing is copying them.

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