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Brier Dudley's Blog

Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

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July 17, 2008 1:40 PM

Microsoft earnings tidbits: Danger costs, plus MSFT's mortgage issue

Posted by Brier Dudley

Among the interesting nuggets in Microsoft's earnings report today: The February acquisition of Palo Alto, Calif.-based handset software maker Danger added $24 million in costs to the entertainment group.

Sounds like the group is also stepping up investments into the next Xbox (or Zune?).

The report doesn't say exactly what Microsoft paid for Danger, but it does say Microsoft experienced $24 million in expenses related to the company. Hmmm.

"Research and development expenses (in the Entertainment and Devices Division) increased $141 million or 38%, primarily reflecting increased headcount-related expenses, increased product development costs, and costs relating to Danger, including a $24 million in-process research and development expense."

In another surprise disclosure, Microsoft said its investments include mortgage-backed securities but they're mostly "prime" mortgages and the portfolio is not directly exposed to the sub-prime meltdown:

"While we own certain mortgage and asset-backed fixed-income securities, our portfolio as of June 30, 2008, does not contain direct exposure to subprime mortgages or structured vehicles that derive their value from sub-prime collateral. The majority of the mortgage-backed securities are collateralized by prime residential mortgages and carry a 100% principal and interest guarantee, primarily from Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, and Government National Mortgage Association. The remainder of the mortgage position is collateralized by high quality international prime residential mortgage loans."

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July 17, 2008 1:15 PM

Google growth slows, misses EPS estimate

Posted by Brier Dudley

Apparently Google is not immune from the economic troubles. Earnings per share, diluted, were $4.63 versus Wall Street analyst expectations of $4.74. That's also down from $4.84 the previous quarter.

I wonder if this explains why it's taking so long to open the Kirkland campus?


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July 17, 2008 10:53 AM

Sampa nears 100,000 sites, eyes another funding round

Posted by Brier Dudley

Three months after Sampa launched a new version of its family Web site service, the Bellevue venture is powering nearly 100,000 sites, Chief Executive Paul Gross said.

"We are about to reach our 100,000th Web site created on Sampa, and given that Wetpaint has raised gads of money and proudly announced their 1,000,000th wiki, we figured we should do the same,'' he said in an email, noting that Sampa's reaching 100,000 sites with $1 million in funding versus Wetpaint reaching 1 million with $13 million in funding.

Sampa's now thinking about taking series B funding this fall or next spring.

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July 17, 2008 10:18 AM

AOL goes fishing in Seattle, only gets nibbles?

Posted by Brier Dudley

That's how the New York Times characterized the outcome of deal talks between Microsoft and the forlorn Time Warner Internet property.

The companies reportedly met in Seattle yesterday. I supposed we could have generated Techmeme fodder by scouring local hotels and restaurants looking for East Coast business development types in dark suits, but it's hard to get worked up about a deal that may happen eventually but doesn't seem earth shattering.

I wonder if the AOL team really just wanted an excuse to be in Seattle for this weekend's blockbuster event lineup, including the Bruce Lee memorial and the Bite of Seattle.

It was probably their last chance to visit this month, before the hotels fill up around Seafair. Microsoft's people won't want to leave Seattle (or the San Juans ...) for New York City in August, so my guess is that an AOL deal, if there is one, won't happen until the third quarter.

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July 2008



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Gadgets and games | Fun stuff I've written about lately includes Apple's iPhone, Hewlett-Packard's HDX laptop and Microsoft's Halo3. Also on the radar are new digital video boxes such as the Tivo HD and the Vudu.