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Microsoft sets its New Internet Startegies
By Find2k | April 30, 2006
After a long back Bill Gates is again into action, this time he want to baet Yahoo and Google in the Internet Market.
Lets see what the news agencies have to say about this:
As per the Australian News
Microsoft takes a tumble after revealing internet strategies
WALL Street wiped more than $US30 billion ($39 billion) from Microsoft’s stock market value on Friday after the software company revealed a dramatic shift in strategy to boost its investment in the internet and other new markets.The heightened spending points to an escalation in Microsoft’s efforts to jump-start its flagging MSN online business to take on Google and Yahoo and an attempt to steal a march on Sony in the video games business before this year’s launch of PlayStation 3, analysts say.
It also suggests that Microsoft is emerging from a five-year period of grappling with the aftermath of the rapid growth of the 1990s.
Steve Ballmer, who took over from Bill Gates as chief executive officer six years ago, has presided over an overhaul that has seen Microsoft try to adjust to its sheer size and the maturing personal computer market.
“Bill is back - he’s now thinking about the Microsoft that has to be built,” said Mark Stahlman, an analyst at Caris & Co in New York.
“Ballmer doesn’t do strategy.”
With a new version of Windows due to be launched soon and a range of other new products lifting its sales, Wall Street had looked forward to a period of steadily rising profits.
That “instant gratification” had now been delayed as Microsoft ploughed back some of the profits from its latest product cycle into new markets, said Rick Sherlund, an analyst at Goldman Sachs.
Analysts attributed the sharp stock price fall to a lack of detail in Microsoft’s announcement of its new spending plans, which will add $US2 billion to $US2.5 billion to its operating costs in its next fiscal year.
The news emerged as the company announced its earnings and gave forecasts for its next financial year, beginning in July.
Earnings per share will now rise by only 8 to 12 per cent, well below the 16 per cent analysts had expected.
The change in direction was announced by Chris Liddell, the company’s chief financial officer, although he said further details would not be available until an analysts meeting at the end of July.
“I think Gates and Ballmer should have been on the call, and they should have talked about this some time ago,” Mr Sherlund said.
While Microsoft said the higher spending would be spread across a number of products, the shift was widely seen as an attempt to catch up with Google and Yahoo in the fast-growing online business.
The company’s quarterly earnings revealed that the MSN business overall was still shrinking and its search advertising business was growing at only 7 per cent, far below the levels achieved by its internet rivals.
Shares in Microsoft closed almost 11.4 per cent lower at $US24.15 in New York.
Read more at The Australian
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Topics: Internet Marketing and MSN |