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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times reporter Sharon Chan.

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July 31, 2008 11:03 AM

Yahoo shareholder meeting shaping up to be an anticlimax

Posted by Benjamin J. Romano

For much of the spring and early summer, Yahoo's shareholder meeting loomed as the potential defining moment in Microsoft's battle to take control of the company and its valuable online properties. At one time, Microsoft was planning a proxy fight and was lining up its own set of Yahoo director candidates. Then billionaire investor Carl Icahn proposed his slate and began campaigning hard against the incumbent directors. The presumption was that Icahn's directors would be amenable to a Microsoft deal.

Tomorrow's meeting would have been the chance for Yahoo shareholders to vote, essentially, to sell the company or continue independent of Microsoft (the path Yahoo management has taken). But it turns out that the meeting will likely have none of that drama, which is not to say it won't have drama.

Continue reading this post ...


Comments | Category: Carl Icahn , Yahoo |Permalink | Digg Digg | Newsvine Newsvine

July 30, 2008 7:01 PM

New Microsoft exec heading education efforts

Posted by Benjamin J. Romano

Microsoft has created a new corporate vice president position overseeing its education products. L. Michael Golden, most recently a senior vice president at education services company Pearson School, is filling the role, a spokeswoman said in an email.

Continue reading this post ...


Comments | Category: Corporate organization |Permalink | Digg Digg | Newsvine Newsvine

July 30, 2008 3:54 PM

Ballmer foreshadowed new look for Live Search

Posted by Benjamin J. Romano

Today, Microsoft began rolling out a new look for its Live Search start page. The company is going away from the spartan search box on a mostly empty white page -- the design most-closely associated with Google's world-beating search engine -- in favor of a look that leaves room for it to highlight various features of its search and online services offerings. Microsoft CEO Steve Ballmer said last week that he was no fan of the blank start page.

Continue reading this post ...


Comments | Category: Branding , Search , Steve Ballmer |Permalink | Digg Digg | Newsvine Newsvine

July 30, 2008 10:58 AM

Microsoft Translator quietly making progress in machine translation

Posted by Benjamin J. Romano

I didn't have space in today's print story to share an update on Microsoft's translation efforts, which have been in the market -- quietly -- for nearly a year. The Microsoft Translator group is somewhat unique in that it's still part of the Microsoft Research team, even though it's a live product. That's also why it was on display at the Microsoft Research Faculty Summit yesterday.

Continue reading this post ...


Comments | Category: Online services , Research |Permalink | Digg Digg | Newsvine Newsvine

July 28, 2008 2:42 PM

Virtualization company VMWare leasing East Wenatchee data center from Sabey

Posted by Benjamin J. Romano

The Wenatchee World this morning reported that VMWare is the latest company to bring a data center to the hydro-powered server farms sprouting east of the Cascades.

Continue reading this post ...


Comments | Category: Data centers , Real estate and facilities , Virtualization |Permalink | Digg Digg | Newsvine Newsvine

July 28, 2008 12:48 PM

Redefining Internet search

Posted by Benjamin J. Romano

A regular refrain from Microsoft these days is that it's "early days" in Internet search. The status quo model -- 10 blue links on the left, paid-for ads on the right and the top -- "is ripe for innovation," CEO Steve Ballmer said at Microsoft's Financial Analyst Meeting last week. Today, we see the launch of a new search engine that promises to disrupt the model. But it's not from Microsoft. Or Google.

Continue reading this post ...


Comments | Category: Search , Steve Ballmer |Permalink | Digg Digg | Newsvine Newsvine

July 25, 2008 3:37 PM

Open houses scheduled on 520 tolls

Posted by Benjamin J. Romano

On my way back to Seattle from Redmond Thursday evening, I watched as Microsoft Connector shuttles streamed by in the carpool lane. Saving time, and, if Highway 520 gets tolls in two years, saving money. In any case, those who want to share their two cents on the tolls will have five opportunities in the coming weeks.

Continue reading this post ...


Comments | Category: Commuting , Commuting |Permalink | Digg Digg | Newsvine Newsvine

July 25, 2008 11:36 AM

Microsoft's Kevin Johnson resigned

Posted by Benjamin J. Romano

When news that Microsoft Platforms and Services Division President Kevin Johnson was leaving the company broke Wednesday afternoon, it wasn't clear whether he was quitting or was fired. A regulatory filing today clears that up.

Continue reading this post ...


Comments | Category: Corporate organization |Permalink | Digg Digg | Newsvine Newsvine

July 24, 2008 3:30 PM

FAM: CFO Liddell says chance of full acquisition of Yahoo "essentially negligible"

Posted by Benjamin J. Romano

Microsoft Chief Financial Officer Chris Liddell just took the financial analysts here through another re-hash of Yahoo pursuit. He said the value of Yahoo has eroded since Microsoft made its acquisition offer in January. Going forward, he said, the chances of Microsoft buying all of Yahoo are so small as to be "essentially negligible." A search-only transaction is still a possibility.

Comments | Category: FAM 2008 , Financial , Yahoo acquisition |Permalink | Digg Digg | Newsvine Newsvine

July 24, 2008 3:05 PM

FAM: Robotic receptionists coming to Microsoft buildings

Posted by Benjamin J. Romano

As my colleague Brier Dudley noted, Microsoft Chief Research and Strategy Officer Craig Mundie just described spatial interaction with computers as a major new frontier in computing.

He also showed progress Microsoft has made in robotics and natural user interfaces such as speech and facial recognition. He gave one demonstration of how Microsoft is putting these big ideas in practice.

Microsoft is working on "robotic receptionists" for its buildings that will perform one of the most common but mundane tasks that the real receptionists do dozens of times a day: scheduling shuttles, Mundie said.

Continue reading this post ...


Comments | Category: Commuting , FAM 2008 , Natural user interface , Robotics |Permalink | Digg Digg | Newsvine Newsvine

July 24, 2008 2:22 PM

FAM: What about the reorg?

Posted by Benjamin J. Romano

I was expecting more discussion at today's Financial Analyst Meeting of the significant reorganization of the company announced late Wednesday afternoon. It could be further evidence that Kevin Johnson's departure for Juniper Networks caught Microsoft by surprise.

Microsoft CEO Steve Ballmer made little reference to the change, which split the giant Platforms and Services Division into two groups, one focused on Windows/Windows Live and the other on Online Services. Ballmer is taking direct oversight of both groups.

He's due on stage again for a Q&A with analysts later this afternoon, so it may come up.

Here's what he said this morning, introducing the section of his talk focusing on the online business and Internet search in particular:

Continue reading this post ...


Comments | Category: Corporate organization , FAM 2008 , Steve Ballmer |Permalink | Digg Digg | Newsvine Newsvine

July 24, 2008 1:27 PM

Microsoft buying high-end data warehousing company DATAllegro

Posted by Benjamin J. Romano

Microsoft said today it intends to buy Aliso Viejo, Calif.,-based DATAllegro, a data warehousing appliance company.

Continue reading this post ...


Comments | Category: Enterprise , FAM 2008 , Server and tools |Permalink | Digg Digg | Newsvine Newsvine

July 24, 2008 11:32 AM

FAM: How is Windows doing with businesses?

Posted by Benjamin J. Romano

Bill Veghte, Microsoft senior vice president of Online Services and the Windows Business Group, is telling financial analysts about the success of Windows Vista and the improvements in the product and its adoption in the last year.

On security, for example, Windows Vista is 62 percent more secure than Windows XP SP2, he said.

Microsoft has sold 180 million Vista licenses since it launched in January 2007. Sales have been "very balanced" between consumer and business customers.

Enterprises are accelerating their deployments of Vista, particularly since Microsoft released Service Pack 1 in March. Veghte said deployment is consistent with what Microsoft saw with Windows XP.

Contrast Veghte's sunny presentation with this note from market researcher Forrester:

Continue reading this post ...


Comments | Category: FAM 2008 , Windows Vista |Permalink | Digg Digg | Newsvine Newsvine

July 24, 2008 10:52 AM

FAM: Will Microsoft set Xbox 360 pricing for market share or profit?

Posted by Benjamin J. Romano

Microsoft Entertainment and Devices Division President Robbie Bach was just asked about pricing for the Xbox 360 at Microsoft's Financial Analyst Meeting.

How does he evaluate the need to drive share this year and maybe lower prices versus your profitability goals, and do you want to increase your share as the cycle progresses or are you more intent on profitability?

Continue reading this post ...


Comments | Category: FAM 2008 , Xbox 360 |Permalink | Digg Digg | Newsvine Newsvine

July 24, 2008 10:15 AM

FAM: Microsoft and Facebook in search deal

Posted by Benjamin J. Romano

Microsoft has inked a search distribution deal with social networking site Facebook.

Satya Nadella, senior vice president in charge of Microsoft's search, MSN and ad platform engineering efforts, said Microsoft "will be providing an API to Facebook where they will create a rich search experience, inclusive of Web search."

It will launch in the fall, and will include both Live Search results and Microsoft search advertising.

The company is positioning it as another effort to broaden awareness of its Live Search engine, which Nadella demonstrated at Microsoft's Financial Analyst Meeting today.

Last August, Microsoft and Facebook inked a display advertising deal. In October, Microsoft bought a 1.6 percent stake in Facebook for $240 million.

Update, 11:15 a.m.: The deal is U.S. only. It is apparently exclusive, as Microsoft will be providing search on Facebook's site, a Microsoft spokeswoman said. I've asked Facebook for confirmation that Microsoft will be, in fact, its exclusive U.S. search provider. Facebook has more than 90 million active users globally.

Upate, 11:23 a.m.: Facebook spokesman Matt Hicks said in an email: "We're not disclosing the terms of the search deal, but it is specifically for the U.S."

If it were exclusive, why wouldn't Microsoft and Facebook come out and say so definitively?

Update, 12:04 p.m.: Just got an update from Microsoft: The deal is exclusive to Microsoft for search in the U.S.

Comments | Category: FAM 2008 , Facebook , Search |Permalink | Digg Digg | Newsvine Newsvine

July 24, 2008 10:01 AM

FAM: Ballmer on Yahoo

Posted by Benjamin J. Romano

Microsoft CEO Steve Ballmer is explaining his view of the Internet search market and the company's pursuit of Yahoo, which has been the biggest story in the tech world for the first half of the year.

Ballmer repeated his mantra: Yahoo was a tactic to quickly build the scale necessary to compete in search and search advertising, but it wasn't the company's strategy.

The company was ready to spend "$40 whatever blah-blah billion for Yahoo," he said. Because it's no longer doing that, the company has more flexibility to reinvent the search and advertising model, Ballmer said.

He said there's "nothing under discussion between the two of us," but did not rule out the possibility of future discussions.

One big reason Microsoft backed off its proposal to buy the whole company was the delay in moving a transaction forward, which would have pushed the regulatory review process into the next U.S. administration. Ballmer said the company had a tight time line and wanted to go through regulatory review of a potential acquisition with one administration, not two.

Comments | Category: FAM 2008 , Steve Ballmer , Yahoo acquisition |Permalink | Digg Digg | Newsvine Newsvine

July 24, 2008 8:47 AM

FAM: Ballmer's big perspective

Posted by Benjamin J. Romano

About 250 financial analysts have gathered at Microsoft's Redmond headquarters to hear from the company's top leaders, starting with Chief Executive Steve Ballmer, who is on stage now. A link to a live Web cast of the event is here.

Microsoft announced a significant shakeup late Wednesday, including the departure of longtime executive Kevin Johnson, who headed the company's huge Platforms and Services Division. Ballmer also sent an e-mail to employees yesterday outlining his priorities for the 2009 fiscal year.

Ballmer started out telling the investors and analysts in the room that he's with them:

Being a substantial Microsoft shareholder, "I am deeply concerned about where we're going and being responsible about shareholder interest," Ballmer said.

Check back for updates from Microsoft's Financial Analyst Meeting throughout the day.

Update, 9:15 a.m.: Ballmer has covered a lot of territory in 22 minutes on the stage. One big issue for this audience and for investors everywhere: The stock price. Why is it such a laggard? Why does the company's price-to-earnings ratio trail its peers in technology and the S&P 500, despite growing profit by 18 percent a year, on average, for the last six years.

Ballmer didn't say exactly why he thinks the stock has been stuck, but he did list the issues he thinks have the greatest impact on share price:

The Windows PC engine;

Growth opportunities in enterprise;
Technology shift risk;
Success in online and mobile;
Earnings, return of cash, willingness to invest.

Incidentally, the company's shares are down 85 cents, or about 3.2 percent, to $25.58 in midday trading.

Update, 9:45 a.m.: One of the biggest topics on investors' minds today is Microsoft's strategy for online. The company continues to increase its investment in this broad area. We'll hear more throughout the day from executives directly overseeing the various businesses that are touched by the online shift (it's pretty much all of them), but just now, Ballmer laid out the size of the opportunity and why Microsoft has to pursue it.

"Everything in the world that can move to be delivered and embraced over an IP network -- over the Interent -- will be," Ballmer said.

Everything you read, watch, want to communicate is going to happen over the Internet: TV, books, magazines, phone calls, shopping, advertising, online customer service, content, community, commerce, he said.

"The whole world goes digital. ... The size and magnitude of that is really unbelievable," Ballmer said.

The digital transformation is fundamentally "as much a software opportunity as anything else," he said. Software, of course, is Microsoft's expertise, which is part of what gives him confidence in the company's ability to play a major role in the online opportunity.

Why go after it? Ballmer said at Microsoft's scale -- more than $60 billion in revenue during the just-ended fiscal year -- there are few remaining opportunities that can have a major impact on the company's growth rate.

"There's at least $1 trillion just of media, communications and advertising -- not all of which we can capture -- but we don't have a lot of trillion-dollar markets that are being transformed," Ballmer said.

That opportunity, to Ballmer, justifies the investments the company is making now. The $1.2 billion operating loss in the company's Online Services Business last year was about 5 percent of total operating income, he said.

"But the amount of economic value that we have the opportunity to create, is certainly at least 40, 50, 60 percent or more of our total economic value today," he said. "... I think it is a very good risk-return."

While the opportunity extends to nearly all of Microsoft's businesses, Internet search is the tip of the spear -- the front door of the Internet.

Comments | Category: FAM 2008 , Steve Ballmer |Permalink | Digg Digg | Newsvine Newsvine

July 24, 2008 8:40 AM

Confirmed: Microsoft's Johnson to Juniper Networks

Posted by Benjamin J. Romano

Network equipment maker Juniper Networks this morning confirmed that Kevin Johnson, 47, the former president of Microsoft's huge Platforms and Services Division, will be its new chief executive officer, beginning in September.

Continue reading this post ...


Comments | Category: Corporate organization |Permalink | Digg Digg | Newsvine Newsvine

July 23, 2008 5:46 PM

Ballmer internal e-mail lists priorities for year, including competition with Apple, Google

Posted by Benjamin J. Romano

Microsoft CEO Steve Ballmer sent an e-mail to Microsoft's employees at 4:30 this afternoon explaining the reorganization of the Platforms and Services Division, and the departure of Kevin Johnson, a 16-year Microsoft employee who was president of that division.

Ballmer also laid out his priorities for the company in the 2009 fiscal year, which began July 1. The e-mail is after the jump.

Continue reading this post ...


Comments | Category: Steve Ballmer |Permalink | Digg Digg | Newsvine Newsvine

July 23, 2008 4:04 PM

Microsoft President Kevin Johnson departing

Posted by Benjamin J. Romano


Steve Ringman/THE SEATTLE TIMES

Kevin Johnson, president of Microsoft's huge Platforms and Services Division, is leaving the company, reportedly to head Juniper Networks. Microsoft is splitting the division into two groups, both of which will report to CEO Steve Ballmer.


The Wall Street Journal just posted a story citing unnamed sources who say Kevin Johnson, president of Microsoft's huge Platforms and Services Division, is leaving the company to run Juniper Networks. I've asked Microsoft representatives for confirmation, but have not heard back yet.

Update, 4:25 p.m.: Microsoft just confirmed Johnson's departure and announced a major reorganization of his division.

The Platforms and Services Division, which has more than 14,000 employees and is responsible for Windows, and the company's growing suite of online services -- including Internet search -- will be divided in to two groups, both reporting directly to CEO Steve Ballmer.

Update, 4:33 p.m.: The groups will be Windows/Windows Live and Online Services, according to a company statement.

"Effective immediately, senior vice presidents Steven Sinofsky, Jon DeVaan and Bill Veghte will report directly to Ballmer to lead Windows/Windows Live," the statement continued.

The company will search for a leader to fill a new position atop the Online Services group.

"In the Online Services Business, Microsoft will create a new senior lead position and will conduct a search that will span internal and external candidates. In the meantime, Senior Vice President Satya Nadella will continue to lead Microsoft's search, MSN and ad platform engineering efforts," the company said.

Johnson was one of three Microsoft division presidents. He took over the division in September 2005. Johnson led Microsoft's largest acquisition to date, Seattle-based aQuantive, and would have been in charge of incorporating Yahoo into his division.

According to his Microsoft biography, Johnson has been with the company since 1992, holding positions including group vice president of worldwide sales.

Update, 6:14 p.m.: Ballmer sent an e-mail to employees this afternoon laying out his priorities for the current year and explaining Johnson's departure and the reorganization. Read it here.

Comments | Category: Corporate organization , Online services , Windows Vista |Permalink | Digg Digg | Newsvine Newsvine

July 23, 2008 2:50 PM

$3.25 toll to cross 520 as soon as 2010? Make your Connector reservations

Posted by Benjamin J. Romano

Driving to work could get significantly more expensive for Microsofties and others heading from Seattle to Redmond, or vice versa. A new state study released today lays out four options for tolling to raise some of the cost of replacing the Highway 520 floating bridge. Afternoon peak tolls could range from $2.95 to $3.25 starting 2010. Morning peak tolls would be $2.15 to $2.60.

Continue reading this post ...


Comments | Category: Commuting |Permalink | Digg Digg | Newsvine Newsvine

July 23, 2008 11:07 AM

Microsoft, Sony producing original video content for online game networks

Posted by Benjamin J. Romano

Microsoft is co-producing a series of digital short films for distribution over the Xbox Live in another sign that online gaming networks are becoming more like all-in-one digital content distribution channels. Meanwhile, Sony is eyeing its own exclusive video offerings for distribution over the PlayStation Network, possibly in partnership with the company's formidable movie and television studios.

Updated, 4:03 p.m.: New comments from Microsoft after the jump.

Continue reading this post ...


Comments | Category: Games & entertainment , Sony , Video , Xbox 360 |Permalink | Digg Digg | Newsvine Newsvine

July 22, 2008 12:44 PM

Microsoft sharing revenue with amateur game developers

Posted by Benjamin J. Romano

My colleague Brier Dudley is covering Gamefest, where Microsoft has announced a revenue-sharing arrangement for amateur video game developers. The company announced it will sell amateur-created Community Games over Xbox Live and give developers up to 70 percent of the proceeds, Dudley reported.

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Comments | Category: Games & entertainment , Xbox 360 |Permalink | Digg Digg | Newsvine Newsvine

July 22, 2008 9:22 AM

Report: Microsoft ads to equate Vista-haters with the Flat Earth Society?

Posted by Benjamin J. Romano

Ed Bott at ZDNet has a screen shot that may be part of Microsoft's forthcoming $300 million advertising campaign to improve the image of Windows Vista. The shot shows a tall sailing ship on the open sea next to the text, "At one point, everyone thought the Earth was flat." Below that, "Get the facts about Windows Vista."

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Comments | Category: Advertising , Windows Vista |Permalink | Digg Digg | Newsvine Newsvine

July 18, 2008 3:02 PM

Former Microsoft employee gets 22 months for fraud scheme

Posted by Benjamin J. Romano

Seattle Times business reporter Isaac Arnsdorf filed this dispatch on the sentencing today of Carolyn M. Gudmundson:

Carolyn M. Gudmundson, the former Microsoft employee who pleaded guilty in January to embezzling about $1 million, was sentenced in federal court today to 22 months in prison.

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Comments | Category: Legal issues |Permalink | Digg Digg | Newsvine Newsvine

July 18, 2008 11:42 AM

U.S. search market share trend reversed in June: Google down, Microsoft and Yahoo up

Posted by Benjamin J. Romano

Did anyone hear a cheer go up from RedWest just now? Microsoft's Internet search-market share had its first up-tick this year, according to just-released data from comScore.

The company's Live Search engine gained almost a percentage point of U.S. market share from May to June, though it still trails far behind Google.

Continue reading this post ...


Comments | Category: Search |Permalink | Digg Digg | Newsvine Newsvine

July 18, 2008 10:10 AM

Microsoft shares fall after earnings news, analysts react

Posted by Benjamin J. Romano

Microsoft's stock has not recovered from the tumble it took in after-hours trading Thursday. At 10:15 this morning, shares were down $2.06, 7.5 percent lower than the $27.52 closing price Thursday before the company announced earnings that missed Wall Street forecasts by a penny per share, and lowered its fiscal 2009 profit forecast. Here's what analysts had to say about the results in notes to investors this morning:

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Comments | Category: Financial |Permalink | Digg Digg | Newsvine Newsvine

July 17, 2008 3:38 PM

Wii passes Xbox 360 in total U.S. sales

Posted by Benjamin J. Romano

NPD Group just released data confirming what Nintendo of America President Reggie Fils-Aime predicted in February. His company's Wii console sold 666,700 units in the U.S. in June, bringing its total install base to 10.9 million, taking the lead from Microsoft's Xbox 360.

Continue reading this post ...


Comments | Category: Games & entertainment , Nintendo , Sony , Xbox 360 |Permalink | Digg Digg | Newsvine Newsvine

July 17, 2008 1:22 PM

Microsoft, too, misses Wall Street earnings estimate, but just by a penny

Posted by Benjamin J. Romano

From the company's just-released fiscal fourth-quarter earnings announcement: Revenue was $15.84 billion for the quarter ended June 30, 2008, up 18 percent; operating income and diluted earnings per share were $5.68 billion and 46 cents. The average estimate of Wall Street analysts was for earnings of 47 cents a share.

Update, 1:31 p.m.: Microsoft is also tumbling in the after-hours market on the earnings miss. Its shares finished the regular session at $27.52, but were trading around $25.95, down 6 percent, in the after-hours market.

Update, 1:43 p.m.: Microsoft lowered its income and earnings outlook for the current fiscal year, which began July 1. Now the company expects full-year operating income of between $26.3 billion to $26.9 billion compared with a range of $26.7 billion to $27.4 billion given April 24.

Earnings per share, management says, will come in between $2.12 to $2.18 for the full year, down a penny from April 24 update of $2.13 to $2.19.

CFO Chris Liddell will surely offer an explanation for the move, which isn't entirely surprising given the tighter IT spending environment. Still, this is the first sign that Microsoft's business has been impacted.

Update, 2:23 p.m.: After speaking just now with Colleen Healy, Microsoft's investor relations head, it turns out the reduced guidance is not the result of an expected tightening IT budget. Microsoft instead is upping its spending on the Online Services Business, which just turned in a $1.2 billion operating loss for the fiscal year, more than twice the loss of the prior year.

Since the April update, "We have made a conscious decision to increase our spending, in particular to invest in our Online Services Business," Healy said.

Specifically, the company wants to drive increased awareness and search traffic to its Live Search engine; continue building its advertising platform; and enhance its MSN portal, Healy said. In total, that will come in at about $500 million in operating expense increases.

Revenue growth forecasts for 2009 are actually up slightly, indicating the company is not expecting any softening in sales. "We're feeling good about fiscal year 09 and that does give us the confidence to invest in the business," she said.

Also, in the current fiscal fourth quarter, Microsoft saw operating expenses increase by $500 million, in part because revenue was higher than expected because of increased consulting business and Xbox 360 sales, which have higher costs associated.

The other half of that op ex increase -- about $250 million -- "was to do things like get tenacious on taking advantage of the economic climate out there to attract top talent," Healy said.

Update, 2:37 p.m.: The Entertainment and Devices Division met its goal of profitability -- operating income of $426 million for the full fiscal year, a first. But the company stumbled to the finish with a $188 million loss in the current quarter. Healy chalked up the loss to investments in the division.

"We did continue to invest in things like our mobility efforts and other areas in that business, which, we think, is going to fuel growth in the future," she said. "Our goal was sustained profitability on a yearly basis, and that doesn't mean that quarter-by-quarter, it's going to be in the black. It means that our goal is that on a yearly basis, we expect to be in the black, which continues for fiscal year 09."

The company noted strong Xbox 360 sales in the quarter, and revenue growth of 36.6 percent. Asked if the company loses money on each console, Healy said the company's goal is for the console to break-even in the long run, excluding the $1.1 billion charge the company took in the fourth quarter last year to expand warranty coverage on its overheating Xbox 360s.

Comments | Category: Financial , Microsoft |Permalink | Digg Digg | Newsvine Newsvine

July 17, 2008 1:11 PM

Google sees sequential profit dip, misses estimates, gets a beating

Posted by Benjamin J. Romano

Microsoft's top Internet rival, Google, saw a slight, sequential decline in profit in the second quarter, posting non-GAAP net income of $1.47 billion, compared with $1.54 billion in the first quarter of 2008. Non-GAAP earnings per share were $4.63, missing the average analyst estimate of $4.74 a share. The company's stock was tumbling in the after-hours market.

Next up Microsoft.

Comments | Category: Financial , Google |Permalink | Digg Digg | Newsvine Newsvine

July 16, 2008 10:39 PM

Microsoft Q4 earnings preview

Posted by Benjamin J. Romano

Microsoft reports earnings for the fiscal 2008 fourth quarter and full year Thursday. It will also sharpen its forecast for the current quarter and fiscal year against a backdrop of grim developments in the broader economy.

At the same time, the ongoing pursuit of Yahoo could be coming to a climax in two weeks at Yahoo's shareholder meeting. But the drama that has unfolded in the last five and a half months has put an anchor on Microsoft's stock and called the company's online strategy into question.

So what are analysts expecting and watching for Thursday?

Continue reading this post ...


Comments | Category: Financial , Games & entertainment , Google |Permalink | Digg Digg | Newsvine Newsvine

July 16, 2008 5:53 PM

E3: It takes all kinds in the games industry

Posted by Benjamin J. Romano

LOS ANGELES -- I got an email yesterday from Bill Dugan of Torpex Games, a collection of video game industry vets who are bootstrapping it in the growing downloadable games market. He had good news: Their game, Schizoid, shipped last week.

As I head home from the E3 Media and Business Summit, Dugan's success was a reminder that the games industry is not all about the blockbuster titles and multi-million dollar marketing extravaganzas like this one.

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Comments | Category: E3 2008 , Games & entertainment |Permalink | Digg Digg | Newsvine Newsvine

July 16, 2008 4:11 PM

E3: A word on the next 'Halo' from a top Microsoft exec

Posted by Mark Watanabe

Brier Dudley points out in his blog today that Xbox boss Don Mattrick told a blogger from MTV's Multiplayer blog that a new version of "Halo," the blockbuster game, is in the works.

Mattrick's remarks came after Bungie Studios, the Kirkland-based developer of the series, canceled an announcement many expected Tuesday at E3.

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July 16, 2008 12:52 PM

Reports: AOL-Microsoft meeting today to advance possible deal talks

Posted by Benjamin J. Romano

The Wall Street Journal is reporting that Time Warner and Microsoft are talking more seriously about a possible deal.

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July 16, 2008 3:21 AM

E3: Video: Tour of game art gallery

Posted by Benjamin J. Romano

LOS ANGELES -- One feature of our revamped Microsoft Pri0 blog is video. Check out this tour of "Into the Pixel: An Exhibition of the Art of the Video Game" here at E3. Some of the images are beautiful, and very interesting. I think it gives a sense for how the games industry has matured and is a full-fledged, vibrant art form. Feel free to share your thoughts in the comments below.


Comments | Category: E3 2008 , Games & entertainment , Video |Permalink | Digg Digg | Newsvine Newsvine

July 15, 2008 11:48 AM

E3: Sony press conference

Posted by Benjamin J. Romano

LOS ANGELES -- Sony's press conference, hot on the heels of Nintendo's and a long, smoggy cab ride away, is rolling.

Jack Tretton, top dog at Sony in the U.S., started with some history. Fifteen years ago this week, executives at Sony gave the green light to the original PlayStation. The company was ahead of the technology curve then, introducing gamers to CDs, Tretton said. It's successor, PlayStation 2, was built with a 10-year plan in mind, and has now sold some 140 million units.

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July 15, 2008 9:00 AM

E3: Nintendo press conference

Posted by Benjamin J. Romano

LOS ANGELES -- Nintendo has gathered another big crowd of media and game-industry partners inside the Kodak Theater on Hollywood Boulevard this morning for its E3 press conference.

Here are some of the questions hanging over Nintendo, the breakout success story of the current-generation console competition:

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July 15, 2008 7:44 AM

Morning news roundup

Posted by Benjamin J. Romano

LOS ANGELES -- I'll be covering the E3 press conferences of Nintendo and Sony - Microsoft's competitors in the game console business - beginning this morning at 9 and 11:30 a.m., respectively. Meanwhile, here's today's story summarizing Microsoft's games and entertainment announcements from Monday. You can see all of my posts from E3 here.

Continue reading this post ...


Comments | Category: E3 2008 , Legal issues , Yahoo acquisition |Permalink | Digg Digg | Newsvine Newsvine

July 14, 2008 10:29 PM

E3: The European campaign

Posted by Benjamin J. Romano

Too often, we focus on the video game (and Internet search) competition in the U.S., to the exclusion of the rest of the world. But on the games front, the battle for Europe during the current console generation is more interesting and perhaps more up for grabs than in the U.S.

And if Microsoft Xbox boss Don Mattrick wants to back up the claim he made today -- that "Xbox 360 will sell more consoles worldwide this generation than PlayStation 3" -- he'll have to win in Europe.

Continue reading this post ...


Comments | Category: E3 2008 , Games & entertainment , Microsoft , Nintendo , Sony |Permalink | Digg Digg | Newsvine Newsvine

July 14, 2008 2:05 PM

E3: Microsoft strikes up the bands as more musicians dive in to video games

Posted by Benjamin J. Romano

LOS ANGELES -- While players are still flocking to games with guns and swords, it's the axe that has been the surprise weapon of choice. That would be the electric guitar in "Guitar Hero," which has taken the games world by storm in recent years. As the popularity of music games has skyrocketed, more musicians are getting into the act and seeing video games as an important distribution channel, as illustrated in several announcements from Microsoft and its partners today.

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July 14, 2008 11:55 AM

Microsoft fires back, disputing Yahoo's account of weekend offer

Posted by Benjamin J. Romano

Yahoo had the stage itself on Sunday to tell the story of Microsoft's latest proposal, which it rejected. But Microsoft fired back this morning with its own account of the last-ditch deal effort that went down starting Thursday.

Update, 12:33 p.m.: Carl Icahn is also out with another letter to Yahoo shareholders disputing Yahoo's account.

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July 14, 2008 11:26 AM

E3: Microsoft partnering with Netflix, NBC, others to challenge as top video destination

Posted by Benjamin J. Romano

LOS ANGELES -- Microsoft is spending a major chunk of its press conference at the video game industry's big annual conference here describing new television and video distribution deals for the Xbox Live network, which has more than 12 million members.

The company is distributing television shows from NBC, movies from Universal Studios, and in probably the biggest piece of news: adding a huge library of movies through Netflix.

Speculation about whether Microsoft would do a deal with Netflix has swirled since at least March of last year, when Reed Hastings, founder, chairman and chief executive of the DVD-by-mail video-rental service, joined Microsoft's board of directors.

The details of the partnership and how Xbox Live subscribers will get access to the Netflix library weren't fully fleshed out. I'll update when I learn more.

See this post for more from Microsoft's E3 press conference.

Update, 12:59 p.m.: The partnership will allow consumers to "instantly stream movies and TV episodes from Netflix to the television via the Xbox 360 video game and entertainment system," according to a more detailed statement from Microsoft.

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July 14, 2008 10:29 AM

E3: Microsoft press conference

Posted by Benjamin J. Romano

The music is thumping, Xbox-green lights flashing over a stage set up in the Los Angeles Convention Center. About 1,200 games industry press, armed with cameras, laptops and Internet connections, are taking seats and waiting to hear what Microsoft's Interactive Entertainment Business has in store.

Don Mattrick, the new senior vice president of Microsoft's Interactive Entertainment Business, framed the fundamental question facing the games industry.

"Can we deliver to our fiercely loyal fans and at the same time continue to transform the industry by delivering to everyone?" he said. "Yes."

Now the company is showing some of the upcoming titles, which Mattrick said will generate $500 million in projected sales and drive additional console sales. Right now, we're watching a demonstration of "Fallout 3," a gruesome first-person shooter set in a post-nuclear-attack Washington, D.C. It's due out this fall.

Update, 10:54 a.m.: Microsoft is clearly putting its content for hard core gamers first. Following the "Fallout 3" trailer and demo, another game developer, Capcom, demonstrated "Resident Evil 5," another installment in another violent, first-person shooting series. It's coming out Friday, March 13, 2009, simultaneously in North America, Europe and Japan.

Update, 11:13 a.m.: Mattrick is back on stage and is pledging that Microsoft Xbox 360 will sell more consoles worldwide than Sony's PlayStation 3 during the current console generation.

He touted Xbox Live, the online network for gaming and downloading videos and announced that there are now 12 million Live subscribers. Collectively, subscribers have spent more than $1 billion on Xbox Live content since Live was launched in November 2005.

Mattrick announced that Microsoft is partnering with NBC and Universal Studios to distribute movies and television shows through Xbox Live.

Update, 11:25 a.m. John Schappert, corporate vice president of Xbox Live, software and services, just announced an exclusive partnership with Netflix, allowing members who are already subscribers to Xbox Live subscribers to get access to an additional 10,000 titles through the Netflix library.


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July 14, 2008 10:16 AM

E3: Nintendo goes out of turn, announces enhanced Wii controller

Posted by Benjamin J. Romano

LOS ANGELES -- With Microsoft's press conference about to begin, Nintendo is stealing some thunder with an announcement of its own.

Nintendo announced a "Wii MotionPlus" accessory for the simple, motion-sensing Wii Remote -- the feature that distinguishes Nintendo's console from the competition.

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July 14, 2008 7:56 AM

E3: What is Halo 'Blue'?

Posted by Benjamin J. Romano

LOS ANGELES -- A post on video game news site Joystiq shows what is described as a Wal-Mart inventory listing for something called Halo "Blue," due out, perhaps, Sept. 30. So what is it? Add that to the list of questions that may be answered at Microsoft's E3 press conference in two and a half hours.

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July 13, 2008 8:17 PM

How is latest Microsoft move for Yahoo playing with investors?

Posted by Benjamin J. Romano

Microsoft and Carl Icahn made Yahoo an offer it apparently could, and did, refuse over the weekend. It was another flavor of the search-only alternative transaction Microsoft has been floating since May, but this time around, according to a Saturday night statement from Yahoo, Icahn would get the Yahoo leftovers.

Some investors are wary of that outcome, given that Icahn has yet to articulate what he would do if he were in charge. This latest aggressive offer may add a new dimension to investors' thinking ahead of Yahoo's Aug. 1 stockholder meeting, which is starting to look like the OK Corral.

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July 13, 2008 7:19 PM

E3: Microsoft cuts price on 20-gig Xbox 360, introduces new 60-gig model

Posted by Benjamin J. Romano

Microsoft today announced the Xbox 360 price cut that had been expected, but also announced a new 60-gigabyte model to hit stores in August.

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July 11, 2008 9:28 AM

Reports: Bad blood could stymie Yahoo-Microsoft deal

Posted by Benjamin J. Romano

The chatter around Yahoo-Microsoft coming out of the Allen & Co. bigwig shindig in Sun Valley, Idaho, this week is increasingly acrimonious and negative toward any deal.

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July 10, 2008 3:17 PM

Why Microsoft is lowering Xbox 360 price, and why it's not lowering price more

Posted by Benjamin J. Romano

The video game world seems pretty confident that Microsoft will cut the price of its Xbox 360 console by $50 on Sunday, a day before its big press conference at the E3 Media & Business Summit in Los Angeles. A story in The Wall Street Journal further confirms the rumors.

A $50 cut would lower the price of the Xbox 360 Pro version of the console to $300. So why is the company dropping the price now? And why not cut the price more to really put the pressure on Sony? Hint: Microsoft's Entertainment and Devices Division has a promise to keep.

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July 9, 2008 8:53 AM

Vista, Office 2007 top CIOs' list of software projects to be delayed in tightened IT spending environment

Posted by Benjamin J. Romano

Goldman Sachs is out this morning with an extensive review of the software industry as second-quarter earnings begin rolling in next week. Broadly, the analysts see chief information officers -- CIOs -- tightening their belts.

"Our latest IT spending indicators suggest ongoing caution in 2008 spending plans on a year-over-year basis. CIO expectations of growth in budgets remains well below 1-year and 2-year ago levels," the analysts wrote.

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July 7, 2008 1:22 PM

Lots for Microsoft, Yahoo to talk about at upcoming elite Sun Valley business retreat

Posted by Benjamin J. Romano


DOUGLAS C. PIZAC/AP

Yahoo's Jerry Yang and Google's Sergey Brin at the 2004 Allen & Co. Sun Valley Conference.

With Yahoo, Microsoft and Carl Icahn waging a public campaign to win shareholder hearts and minds (and, most important, votes), a few more interesting reports surfaced this afternoon: One major Yahoo shareholder is said to be leaning toward Icahn's slate of director candidates. Meanwhile, any potential Yahoo-AOL deal would be on hold until after Aug. 1.

All of this as the titans of the online and media worlds head toward Sun Valley, Idaho, for the annual Allen & Co. deal-making retreat.

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July 7, 2008 9:51 AM

Yahoo says it's ready to deal with Microsoft now

Posted by Benjamin J. Romano

Yahoo, responding to the coordinated communications barrage from Microsoft and Carl Icahn earlier this morning, said in a statement in "continues to stand ready" to deal.

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July 7, 2008 6:30 AM

Microsoft would pursue Yahoo acquisition if new board were elected

Posted by Benjamin J. Romano

Microsoft CEO Steve Ballmer and billionaire activist investor Carl Icahn have spoken frequently in the last week about the prospects of a deal to buy some or all of Yahoo should Icahn's slate of director candidates win control of the company at the Aug. 1 Yahoo shareholder meeting. Icahn issued another open letter to shareholders this morning, which Microsoft answered with a statement of its own.

"While of course there can be no assurance of a future transaction, we will be prepared to enter into discussions immediately after Yahoo!'s shareholder meeting if a new board is elected," Microsoft said.

Such a transaction could include the purchase of just Yahoo's Internet search business -- a prospect Microsoft has had on the table since at least May 18 -- or a full acquisition. Since Jan. 31, Microsoft has been trying to buy Yahoo to strengthen its position against Internet search and advertising leader Google.

Update: Both Icahn's letter and Microsoft's statement describe the frustration Ballmer has felt toward Yahoo and its management. From the Microsoft statement:

"Despite working since January 31 of this year, as well as in the early part of last year, we have never been able to reach an agreement in a timely way on acceptable terms with the current management and Board of Directors at Yahoo!. We have concluded that we cannot reach an agreement with them."

Icahn provided more detail, based on his discussions with Ballmer and other Microsoft execs, including Kevin Johnson:

"Steve made it abundantly clear that, due to his experiences with Yahoo! during the past several months, he cannot negotiate any transaction with the current board. His logic is simple. If and when a transaction was consummated, Microsoft would be guaranteeing a great deal of capital at closing. However, a transaction could take at least nine months and perhaps longer to obtain regulatory clearance in the U.S., Europe, and elsewhere. During that period, if the current board and management team of Yahoo! mismanage the company (and their recent track record is far from reassuring), Microsoft would be putting its money at risk and a great deal could be lost. ... Microsoft perceives this risk may be quite high with the current board and management in place."

While being careful to note that he does not speak for Yahoo (yet) and that no transaction can be guaranteed, Icahn is clearly turning up the volume on his campaign to oust Yahoo's board by dangling a Microsoft deal in front of investors. He began his attack on Yahoo's current board in mid-May, about two weeks after Microsoft withdrew its first proposal to buy Yahoo.

"While there can be no assurance of a future transaction, as many of you know, I have negotiated successfully a large number of transactions over the past years. If and when elected, I strongly believe that in very short order the new board would, subject to its fiduciary duties, be presenting to shareholders either a purchase offer for the whole company or a very attractive offer to purchase 'Search' with large guarantees."

Microsoft offered Yahoo $1 billion for its search business in a deal that would have included an $8 billion investment in the company and a long-term advertising partnership, including "a three-year guarantee of higher monetization than Yahoo!'s Panama paid search system currently provides," according to a letter Johnson issued June 18 explaining the search proposal. This was after Yahoo and Google announced a search-advertising pact of their own.

Icahn noted that his recent conversations with Ballmer did not include price or specifics on whether a search buy or a full acquisition makes the most sense. He also expressed his intent to "expeditiously" replace Jerry Yang as CEO of Yahoo on election of a new board.

Other coverage of note:

-- Yahoo reportedly talked over the holiday weekend with Time Warner about a deal with AOL, according to The Times Online. The story says Yang is scrambling to secure an alternative deal for Yahoo to present at the company's shareholder meeting.

-- More pressing even than the shareholder meeting is Yahoo's second quarter report on July 22, after the market closes, says Kara Swisher. "It is highly unlikely Yahoo leadership will blow the quarter. Or -- more to the point -- they simply cannot, especially given all the unending turmoil that has engulfed the company," Swisher wrote. "And, in fact, top execs have been working to avoid that possibility, sources inside the company said, including using well-known tricks of the trade, such as striking more short-term display deals at lower CPMs."

Update: Shortly after the opening of trading, Microsoft's shares were up about 28 cents, or just over 1 percent, to $26.26. Yahoo's had gained $2.24, more than 10 percent, to $23.59.

Update: See this post for Yahoo's response.

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July 2, 2008 5:11 PM

Independence Day

Posted by Benjamin J. Romano

Time to grill. We'll be back on Monday. Here's hoping Microsoft and Yahoo don't do some major deal over the holiday weekend.

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July 2, 2008 10:11 AM

Microsoft selling Office on subscription basis for $70 a year

Posted by Benjamin J. Romano

Microsoft in July will begin selling a package of subscription services for consumers and small businesses, including the latest version of its widely used Office suite, previously only available for purchase as a one-time license.

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July 2, 2008 9:21 AM

WSJ: In secret meeting, Microsoft told Yahoo execs to look for the woman with the red umbrella

Posted by Benjamin J. Romano

The Wall Street Journal is out today with a major rehash of the Microsoft-Yahoo acquisition saga that includes some great corporate cloak-and-dagger details from the last five months. The news, however, is that Microsoft has been making another round of calls to the usual suspects -- Time Warner's AOL unit and News Corp. -- to find partners for a Yahoo bust-up deal.

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July 1, 2008 11:45 AM

Microsoft buying natural-language search company Powerset

Posted by Benjamin J. Romano

Reports have been circulating since last week that Microsoft was buying some horsepower in search. No, not Yahoo. The new purchase is Powerset, a company spokeswoman confirmed this morning.

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