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Microsoft Posts Record $11.8B Revenue

By Nate Mook, BetaNews

January 26, 2006, 4:46 PM

Microsoft on Thursday announced its financials for the quarter closing out 2005, posting record revenue of $11.84 billion and a 9 percent increase over the previous year. Profit for the quarter topped $3.65 billion thanks to 14 percent growth in the company's Server and Tools division.

Microsoft also cited the Xbox 360 and the success of Windows XP in a growing PC market as reasons behind the record results. Operating income dipped 2 percent to $4.66 billion due to expanded marketing efforts like the one pushing the new Xbox console. Microsoft also returned $8.5 billion to shareholders during the quarter in the form of dividends and share repurchases.

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By ShafuyZ

posted Jan 28, 2006 - 3:53 PM

Microsoft should spare the investors the silly dividends and invest that money wisely, instead - for the LONG TERM benefit of the company/investors.

How about buying a few security companies/experts to audit your code for other "unexpected new-style-of-attack" surprises a-la WMF-fiasco? How about buying a few game companies to take DirectX to the next level to adequately compete with future game-consoles? How about buying Akamai/their-competitors to excel the search-engine and quality-hosting-for-the-masses concept? How about doing automatic backups to that Akamai-style network to help us poor users to deal with ever-reducing harddrive reliability?

Yes, I think I should be on the MSFT shareholder board though I don't (yet) own a single MSFT stock. ;) hehehehe

Score: 0

By ShafuyZ

posted Jan 28, 2006 - 3:01 AM

Mark my words, MS is gonna screw Google real hard. And without vaseline even! G's P/E is kinda double Microsoft's today, while it is Microsoft who has all the power and opportunity to grab huge chunks of G's earnings. The reverse - a Google OS? hahahahahaha I nearly sh*tted my pants from laughing so hard the first time I heard about that concept (hello?? drivers?? software?? a freakin' REASON for people to try it??). Google Talk as an alternative to the AMAZING Windows Live Messenger (which I am betatesting BTW)? C'mon!! All Microsoft needs to do to punch Google in the nuts, is buy, say, Akamai (something they should have done cheaply in 2002) and start analyzing the data patterns/ref info geared toward SEARCHES. The backend can be unix-flavored, just like has been the case for Hotmail despite promises/claims of MS moving to their own platform on it (nobody actually believes Win2K/2K3 servers can handle Hotmail load).

To make a long story short: I bet (my own money BTW) that MSFT stock price is gonna increase at least 50% within 5 years while Google's stock loses at least 70% of current value in that same period of time. And if MS gets pissed off enough about Apple's Macintels, they'll kick them, too, in the piehole by stopping all Mac software development (Office included...IE aleady stopped as you know).

Man, I just love those greedy MS b*stards! Oh, and to those people who said MS doesn't donate? They sure do... But their donation is kinda like an eskimo "donating" blocks of ice to a visiting friend from Africa to take home with him. It don't cost MS a penny to "donate $50million" when it's actually just MS product licenses which the receiver couldn't afford to begin with and possibly would have gone open source otherwise. ;)

Score: 0

By fewt

posted Jan 28, 2006 - 7:11 AM

LOL

Microsoft's stock has been flat for *5 years* it's not going to increase in the next five unless they do something radically different.

See for yourself: http://finance.yahoo.com/q/bc?s=MSFT&t=5y

Score: 0

By ShafuyZ

posted Jan 28, 2006 - 3:14 PM

I'm fully aware of that, and it's a good thing(tm) from an investor POV to put your cash in an UNDERVALUED stock (IMHO).

Radical changes in the brewing:
1. MS is gonna make REGULAR PEOPLE money (see example in the latest move to share revenue with MySpaces users)

2. MS is gonna make DESKTOP Developers Currently Raped By Cracks MORE MONEY (see push toward Trusted Platform Module-chip support and slowly-into-acceptance push to 100% legal Windows+Software usage - currently at maybe 10% worldwide [installation count])

3. MS is gonna make WEB DEVELOPERS more money (see all the Live services being pushed and Visual Studio webservices enhancements including integrating SQL Server in the tools, later in the CONSUMER OS with WinFS/etc). Line between local, intranet, internet will be blurred completely.

4. Last but definitely not least: MS is not gonna rest until they punch Google's revenue stream real hard, totally emulating their business model (nicely summed as "adwords"). There's still plenty of room for improvement in the "relevant search result" business which means the company that spends more on R&D on it, and GETS MORE COMMON PEOPLE TO HELP, will win.

Why would someone allow his search keywords and time spent on each search result to be logged (anonymously, to enhance search technology) when he's even using a competitor search engine? Because he'll get Windows Live services for cheap/free that way (or some other incentive).

How else would the average users be assisting? Simply by turning on their shiny new PC and searching for something. The built-in engine will obviously not be Google. And it'll be Good Enough (tm) - unlike the sh*t that is MSN Search right now. :)

Now, obviously when MS makes all these people mentioned above some money, they'll get their cut. As you can see, MS potential revenue streams are kinda more diverse than Google's current and realistically-potential future streams (IMO of course). I'm sure Google fans will disagree (let's see their predictions/analysis).

Though I do believe the world will be divided into two distinct camps the next few years: those who support copyright Nazi-style enforcement (with hardware assistance), and those who will fight it. MS has made a tactical decision to support it, it seems, which will probably cost them the loss of their monopoly status in the OS market (but gain of power in other segments, and 20-fold total earnings gain as they will partner with every single sane capitalistic company protecting its IP). Google will be FORCED to fill the void (or Mac will do it) and offer crappy-immitation of OS to those cheap/poor/idealistic enough to go against DRM.

In the end, it's not gonna be worth it to be a software/music/movie thief in 2016. It'll be too much hassle and you'd rather spend your time making money if you have any iota of creativity in you (since DRM will guarantee you earnings). People won't be obsessively downloading everything that moves, like admittedly I do now myself, just because I can. Among the 500GB+ I've downloaded in the past years as a huge pirate-of-anything, I can frankly admit to only really enjoy 5% of it.

So you know I'll be on the DRM supporting side, as odd as it may seem... Nah, I'm kidding - I'm a law abiding citizen.

But I really think DRM will push forward a huge amount of creative artists/programmers/writers who right now do something else "to make a living" just because they know they'll be killed in the non-free market where a Madonna song is worth the same as a new-artist song = zero. A true free market is when you HAVE to pay for a Madonna song, whatever she wants you to pay, and thus you'll be thinking to yourself "hmmm that new artist wants to charge me 10c for each of his 4 great songs with unlimited play, Madonna wants $1 per so-so regurgitated-crap song for play on 2 devices only -- what should I do what should I do".

So yeah, forcing us all to pay whatever we're asked (or decline the offer naturally) will be the true information revolution. Resurrection of micropayments shall be a major part of this.

Score: 0

By ds0934

posted Jan 27, 2006 - 12:35 PM

Proof that no matter how much people complain, badmouth, deface, and chastise MS, they continue to succeed. Say what you want, they obviously do something right, and that "something" is SELL. Money doesn't come from air, it comes from US (people). If you hate MS, don't buy their products. Otherwise, shut up and get back to work.

Score: 0

By PC_Tool

posted Jan 27, 2006 - 2:51 PM

*gets back to work*

Score: 0

By maniakmx3

posted Jan 27, 2006 - 10:11 AM

This is somewhat of a reply to all the Sony VS M$ comments Below....

Ok what has Sony been spending all their money on? THe same thing IBM/Lenovo and Toshiba have!! The Cell Processor. The Cell Processor is revolutionary!! We're talking Power from a chip that uses less power consumtption than a laptop chip, with more power than a server chip! Remember that quote from Terminator 3? "My CPU is a Nuronet Processor, a Learning computer"

Yeah...Terminator 3 but in real life! This chip has cought the eyes of Honda, for their ASIMO robot. This Processor could be the new standard in Super Computers and robots alike.

The Three companies just vowed to spend billions of dollars over the next 5 years on researching for Cell Technologies. All the Play Station 3 is in Sony's eyes is a "Prototype" for the Cell Processor.

Sony in conjunction with many other companies in the Blu-ray disc association are researching ways to cut the cost of Blu-ray Drives and players, They are also developing drives and players that are also HD-DVD Compatible as to not "screw" the customer if the NexGen DVD war is not ended soon. Heh funny because The HD-DVD could care less, they havn't even talked with the BD-Rom association about the possibility of a HD-DVD/BD-Rom cross model, where as the BD Association is currently working on one.

Also, the Little robot doggy that they put to sleep? Most of you said "Heh..as expected from a company like sony" But they did that to take those engineers to the Cell Lab to work on it. If you guys read that part. Sony has become a company of Research, Partnered up with IBM and Toshiba. Which is actually kinda funny because Sony and Toshiba are battling in the NexGen DVD war lol

Score: 0

By templar™

posted Jan 30, 2006 - 11:00 AM

You forgot something: rootkit investment is a major part of the expenditure. ;)

Score: 0

By Kramy

posted Jan 26, 2006 - 5:57 PM

Didn't Sony just post $20B revenue, and $1.4B profits?

Score: 0

By bourgeoisdude

posted Jan 26, 2006 - 8:27 PM

Your point?

After all MS did get $3.65 billion in profits so the $20 billion revenue just shows they spend more to get less...this is why MS will, at the current rate (and barring some extreme outside influence), will eventually topple the Playstation. Remember too that Sony doesn't give too much away to charities like MS does and MS still ends up ahead. Sony is spending too much money on useless stuff...

Score: 0

By rijp

posted Jan 27, 2006 - 8:16 AM

Microsoft making the Xbox, has NOTHING to do with the Playstation being overcome. That's a rediculously stupid statement. The playstation is a much better console, and when the PS3 comes out, it will blow away the Xbox 360. Microsoft may be better at OS, Server, and Desktop technology, because Sony doesn't compete, but the console arena will continue to be owned by Sony.

I think that other guy is right, you are making this stuff up. What, you just wake up in the middle of the night and think this stuff up? Stop doing crack, or at least lay off the weed.

Score: 0

By purefx

edited Jan 27, 2006 - 6:21 PM

I smoke weed, and you're full of crap too. For you to make assumptions about a product that is not even released yet is stupid. There are countless factors involved when determining the success of a console, and "looks better" DOES NOT WORK. Oh, and if you haven't noticed, Sony hasn't 'owned' the console area since PS1. That said, I look forward to PS3 and will not be buying a 360 anytime soon.

Also, Microsoft's ability to maintain profitability WILL determine whether or not they can overcome Sony in the market. Microsoft is taking a decent hit on every X360 sold, and it is already FACT that Sony will take a much bigger hit when PS3 is released. If Sony can't invest the amount of money it takes to layout consoles in their market at a reasonable price, they will either charge more or produce a leaner product, either of which could cause them to lose market share.

I see below you even commented on how the PS3 isn't finalized, yet you are confident it will 'blow' the competition away. You've got a nice imagination yourself.

Score: 0

By fewt

posted Jan 27, 2006 - 7:34 AM

Do you have evidence supporting your statement that Sony doesn't give much away to charities? I'm not one to defend Sony but I'd bet that you are making that statement up.

Score: 0

By DarkOne123

posted Jan 27, 2006 - 1:08 AM

I don't think MS give much to charity unless you mean Bill Gate, he has given away from his personal fortune BILLIONs to charity

I think I am correct I might be wrong.

Score: 0

By Kramy

edited Jan 26, 2006 - 10:46 PM

I didn't actually have a point; I was hoping someone would come along and fill in the blank for me. :P

Good point.

Edit: Except that hardware is always more expensive than software. If MS wants to topple the PS3, they're going to have to take a hefty hit with the 360, like they are right now.

Score: 0

By flanque

posted Jan 27, 2006 - 1:01 AM

Except the Blue Ray drive is very expensive to create. Start up manufacturing is typically expensive. What will make more of a difference is when scales of economy start to come into the mix, then we'll see who's really is "cheaper".

Score: 0

By Niro

posted Jan 26, 2006 - 11:28 PM

Unfortunately for Sony...they will be taking a much heftier hit on the PS3 the MS is on the 360...Sony already admitted that production cost of the PS3 is extremely high due in part to Blu-Ray drive production. That'll make the console cost more and still have sony losing more money per console...:)

Score: 0

By rijp

posted Jan 27, 2006 - 8:22 AM

Its still too early to tell. The PS3 has yet to be finalized. It may cost 400 to make the PS3, but the estimate is it will cost 500 in the store.

This is just estimated on one site I saw.. The financial figures aren't real anyway, it costs 500 million dollars lets say to develop the PS3 or the Xbox. Per unit, that works out to be 400 dollars to make, and divide that by the the number of units they intend to sell, and that's where they are getting their costs. That's just paper, not real money per unit, they aren't taking a loss, its just a reference. The money is already spent on research, development, hardware, etc.. They will make all this money up in licensing, games, and the hardware appears to be a loss, because its not a 1 for 1 cost vs profit. They dont' care about that, they will make billions in the years to come. Microsoft doesn't make money on the OS, that's just something to get you interested in their Software, so OTHER developers pay money for the right to have products, and then that's where MS makes their money.

Sony is no different. So, in essence the money isn't really losing, because they don't build these machines 1 at a time, they build however many they think will sell, and go from there. If the machines don't sell, THEN they lose per box.

Score: 0

By expert01

posted Jan 27, 2006 - 10:01 AM

"Microsoft doesn't make money on the OS"

You're right, they don't make any money at all for selling $200 copies of their software that make their way on to 90% of computers made.

"so OTHER developers pay money for the right to have products"

There's no licensing for the Windows OS.

Unless you are talking about the console, in which case you would have said "Microsoft doesn't make money on the CONSOLE", which still makes you an idiot. BTW, microsoft is doing a great job on the 360 marketing, they've sold a ton of consoles, and thw whole eBay mania with consoles going for over $800 is just... priceless. I'm sure they will have quite a large user base in the US and Europe, and if they can get some decent RPG's in the japanese market, they should get a firm foothold there too.

Although that's one thing I don't get... supposedly Japanese kids try to be like americans, yet they don't want to play our violent video games?

Score: 0

By tubaman

edited Jan 26, 2006 - 6:56 PM

And...?

Score: 0

By GeorgeSantayana

posted Jan 26, 2006 - 5:42 PM

This is just more evidence that Microsoft is on the brink of collapse and Linux is poised to sweep the desktop market.

Score: 0

By rijp

posted Jan 27, 2006 - 8:24 AM

Whatever. I can tell by that statement alone, you must be what, 15? You have no real grasp of economic ideals. Linux is freeware. How much profit do they make?

Score: 0

By ogman

posted Jan 29, 2006 - 1:07 AM

Duh, missed the joke again, huh?

Score: 0

By flanque

posted Jan 27, 2006 - 1:07 AM

Kind of hard to see how increased revenues and increased profit equates to collapse.

Take care of your house keeping such as debating for months on end GPL v2 vs GPL v3 and then talk to us...

Score: 0

By expert01

edited Jan 26, 2006 - 7:09 PM

You are right, microsoft is posting record revenues, therefore they must be on the verge of bankruptcy.

(BTW revenue != loss)

Score: 0

By GeorgeSantayana

posted Jan 26, 2006 - 9:00 PM

...Irony and sarcasm are completely lost on Android, and being impossible to insult or injure in any way, he is invulnerable to conventional attack. If, for example, someone were to call him a pinhead, he would get out a tape measure and after finding that his cranium falls within normal size specifications Android would dismiss the comment as erroneous. Android's circuits are not equipped to process ambiguous or aesthetic input, consequently any extensive discussion involving personal feelings, intuition, art and metaphorical allusions will quickly drive Android from the field of battle.

Score: 0

By Kramy

posted Jan 26, 2006 - 9:39 PM

http://redwing.hutman.ne...warriorshtm/android.htm

Flame Warriors ftw.

Score: 0

By ogman

posted Jan 29, 2006 - 1:10 AM

Cool!

Score: 0

By school1012

posted Jan 26, 2006 - 6:15 PM

I think you a mixed up, you mean that this is the brink of the linux collapse and MSFT will pick up the useful pieces(which is not much by the way)

Score: 0

By fewt

posted Jan 26, 2006 - 8:07 PM

Here you are again spreading FUD yet again.

If Linux was going to collapse it wouldn't be on millions of peoples computers today. If Linux wasn't useful then every major vendor wouldn't support it on servers either.

I swear you are paid to post here.

Score: 0

By bourgeoisdude

posted Jan 26, 2006 - 8:23 PM

Funny--I believed the same thing about you Fewt :)

Score: 0

By fewt

edited Jan 26, 2006 - 10:03 PM

Yet you've never been able to find a single post to prove your theory.

Who pays me? I bash or compliment whomever deserves either and I always back it with facts.

You still have nothing bourgeoisdude, but please feel free to keep trying.

Score: 0

By bourgeoisdude

posted Jan 27, 2006 - 9:29 AM

OMG! I was only kidding, geez...

Score: 0

By fewt

posted Jan 27, 2006 - 10:59 AM

Oh, well you didn't imply it.

Score: 0

By ogman

posted Jan 29, 2006 - 1:13 AM

Hey Nate, can I get a raise, and maybe some stock options?

Score: 0

By drumcat

posted Jan 26, 2006 - 5:12 PM

Hopefully that means that the folks in Redmond start making a little more. The SDETs and STEs that they hire from places make dirt. Hopefully this is a sign of a few more Blue Badges and less of the 6 month contracts.

Score: 0

By bourgeoisdude

posted Jan 26, 2006 - 4:50 PM

*Please read before bashing!*

This can only be good news! Now MS can lower prices or just give more money away to charities and such.

Alright, you're now free to bash away...

Score: 0

By rijp

posted Jan 27, 2006 - 8:28 AM

right, they just posted profit and revenue...yeah, lets take a hit this year, because last year we made soooo much money.

Good one. You should sue your brain for non-support.

Oil companies, should use this strategy, but that's not how businesses operate. Stock holders and board members want to see a continuing trend in profits each year, as well as revenue. So we won't see prices get any lower.

Score: 0

By googun

posted Jan 27, 2006 - 4:08 AM

Lower prices and give more to charity?

Unlikely. Very unlikely.

Score: 0

By fewt

posted Jan 26, 2006 - 10:09 PM

Yes, their shareholders are going to JUMP ALL OVER that idea!

LOL

LOL

ROTFLMFAO LOL

There's a phrase that comes to mind, something about elephants and flying..

Score: 0

By PC_Tool

posted Jan 27, 2006 - 9:57 AM

Can they be pink? I like the pink ones.

Just stay away from the green ones. They're bad, bad green elephants.

Score: 0

By fewt

edited Jan 27, 2006 - 8:24 PM

I like bad bad green elephants.

*AND* I like'em almost as much as I like heffalumps and woozles.

heh

Score: 0

By garou506

posted Jan 26, 2006 - 5:28 PM

Microsoft is evil :D

Score: 0

By ogman

posted Jan 29, 2006 - 1:15 AM

That's so old school, dude. Now....Google is Evil!

Score: 0

By PC_Tool

posted Jan 26, 2006 - 5:26 PM

lmao.

Do we have to?

Score: 0

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