WinInfo Blog

Short Takes

- Microsoft Revenues Up, Profits Flat
- Better Together: Vista and Office 2007 Will Launch Together in January
- Microsoft Ships Electronic Money
- Microsoft Files Piracy Lawsuits
- Microsoft Changes Financial Reporting
- Again, Google's Profits Soar
- Yahoo! Profits Fall
- Yahoo! Offers DRM-Free Music
- Apple Posts Strong Quarter Thanks to Mac, not iPod
- To Counter Intel, AMD to Go Quad Core

WinInfo Blog

by Paul Thurrott, thurrott@windowsitpro.com

Heat wave: This past week was the hottest of the year here in the Boston area, with temperatures in the 90s for about five days straight. Now, I did live in Arizona for several years, so I understand what real heat is all about, but there's something particularly nasty about the hazy, hot, and humid weather we get here that makes the entire place seem like an unwanted sauna visit. The heat, coupled with the tunnel collapse of Boston's amazingly shoddy "Big Dig," didn't make for exactly the greatest week here.

Time is ticking down to our home swap in France. I can't recall if I mentioned this here, but we'll be in the suburbs of Paris for three weeks beginning in early August, while a family from France will be staying at our house and, I expect, seeing the sights here. I'll still be working the entire time I'm there, and if I didn't prattle on and on about it, you'd probably never even know I was gone.

Because we're taking the kids to France, we'll be visiting some places I'd never normally consider (like Disneyland Paris, God help me), but we're also planning a side trip to Belgium and The Netherlands, where we plan to hook up with Steven Bink of Bink.nu, who has graciously promised to show us some highlights in Amsterdam. I'm looking forward to that, at least.

Short Takes

An often irreverent look at some of the week's other news

by Paul Thurrott, thurrott@windowsitpro.com

Microsoft Revenues Up, Profits Flat

On Thursday, Microsoft announced its quarterly and annual financial results, beating analyst estimates despite flat profits for the quarter. The company also announced a plan to purchase about $20 million in stock back from shareholders, though this action probably won't help all those suckers who bought the stock at $60 per share a few years ago. For the quarter ending June 30, the company earned $2.83 billion (down 24 percent from the same quarter a year ago) on revenues of $11.8 billion (up 16 percent). Microsoft blamed the earnings drop on increased spending for its next "wave of innovation," which includes Windows Vista, Microsoft Office 2007, Xbox 360, and Windows Live.


Better Together: Vista and Office 2007 Will Launch Together in January

Speaking of Vista and Office 2007, Microsoft told partners at its annual partner conference last week that it will still be launching the products in tandem in January 2007, contrary to rumors that either product could be delayed further into 2007. Microsoft will back the two products with $900 million worth of marketing in the company's current fiscal year, half of which it will spend on the product launches. I'm curious to see how tandem launch plays out. Vista is notoriously late, so one could logically wonder why anyone could get excited about it. But it has been five years since the last revolutionary Windows upgrade, so you never know. The Office launch is a bit more positive: Office 2007 is a huge upgrade, and people are actually excited about it, which might be a first for Microsoft's workhorse productivity suite.


Microsoft Ships Electronic Money

Microsoft this week unveiled the 2007 edition of its Microsoft Money applications, but the big surprise is that a new low-cost version of the product, dubbed Money Essentials, is available for purchase online. This development marks a first for Money, as does its $19.99 pricing. For that price, customers get all of the product's basic finance tools, including those for online banking. Other versions of Money 2007 include Money 2007 Deluxe ($49.99) and Money 2007 Home and Business ($89.99). Those versions of Money are available only at retail outlets. Find out which version is right for you on the Microsoft Web site. http://www.microsoft.com/money


Microsoft Files Piracy Lawsuits

This week, Microsoft announced that it had filed 26 lawsuits against US companies it accused of selling pirated software. The lawsuits were filed in Colorado, Georgia, Illinois, New Jersey, New York, Ohio, and South Carolina, and involve pirated versions of Windows and Office, Microsoft said. Why would Microsoft, a company with billions in revenues each month and with paying customers all around the globe, be so aggressive about piracy? "We're worried about \[software piracy\] because it does seriously affect our business, in the sense of people not paying for the research and development but reaping the benefits," said Microsoft Senior Attorney Mary Jo Schrade. Group hug, guys, group hug.


Microsoft Changes Financial Reporting

Beginning with fiscal year 2007 (which started July 1), Microsoft has changed the way it reports financial performance. Previously, the company had separated its business into seven operating divisions, but now the company has consolidated to five: Client, Server and Tools, Online Services, Microsoft Business Division, and Microsoft Entertainment and Devices. Put another way, three business groups--Client, Server and Tools, and Microsoft Business Division--will continue to float the money-losing Online Services and Microsoft Entertainment and Devices Groups.


Again, Google's Profits Soar

Google this week announced that its second quarter profits jumped 77 percent year over year. The company earned $721.1 million on $2.46 billion in revenues in the most recent quarter, thanks to massive growth in Internet search-based advertising. Google commands almost 50 percent of the Internet search market, compared with 31 percent for Yahoo! and 14 percent for Microsoft. Apparently, Microsoft isn't the only company that can't compete with Google.


Yahoo! Profits Fall

Speaking of Yahoo!, the company also announced quarterly results this week, and the numbers are down thanks to both Google and its own Netscape-like ineptitude. Yahoo!'s second-quarter profits fell almost 80 percent, year over year, to $164 million on revenues of $1.58 billion (up 26 percent). Yahoo! CEO Terry Semel said that the falloff was due to competition from Google and Yahoo!'s inability to ship an improved advertising system. On the good news front... actually, there is no good news.


Yahoo! Offers DRM-Free Music

The good news: For the first time, a major online music service is offering consumers the ability to purchase a song in a high-quality, unencumbered, digital format free of Digital Rights Management (DRM) restrictions. The bad news: It's a Jessica Simpson song. This week, Yahoo! announced that it's offering the Jessica Simpson song "A Public Affair" through Yahoo! Music without any of the DRM restrictions that typically accompany such tracks. Yahoo! says that it's been trying to convince record labels to drop DRM and go with the popular (but easily copied) MP3 format instead. "DRM doesn't add any value for the artist, label (who are selling DRM-free music every day--the Compact Disc), or consumer," writes Ian Rogers, the director of product management for Yahoo! Music, in his blog. "The only people it adds value to are the technology companies who are interested in locking consumers to a particular technology platform." Color me conflicted: I'd like to purchase this song to send a message to the recording industry, but it's by Jessica Simpson, and I'm having a hard time with the thought that I might be helping her extend the length of her undeserved celebrity.


Apple Posts Strong Quarter Thanks to Mac, not iPod

Apple Computer posted surprisingly strong quarterly revenues this week, but the biggest surprise wasn't that the company performed so well, it was where the money came from. Apple posted income of $472 million on revenues of $4.37 billion, up 24 percent from the same quarter a year ago. The happy surprise this quarter? Macintosh sales hit 1.3 million units, growing 12 percent--much better than expected, due largely to amazing sales of the iBook replacement MacBook, a notebook computer. (I'd like to think I helped a bit: I bought a MacBook this quarter, as it turns out.) Apple's iPod sales jumped slightly to 8.1 million units in the quarter, though the MP3 players fell short of earning 50 percent of Apple's total revenues (iPod revenues were $1.5 billion compared with $1.87 billion for the Mac). However, Apple is expected to jumpstart iPod sales later this year with a "true" video iPod and a phone-based iPod. Stay tuned.


To Counter Intel, AMD to Go Quad Core

AMD is in trouble. Though the company has posted strong market share and financial gains in recent quarters, Intel has just unleashed a triple whammy of new Core 2 Duo microprocessors that technically outpace anything AMD has to offer in all three of the most important chip markets: servers, PCs, and notebook computers. So what can AMD do to prevent a collapse of its well-deserved gains? It's going quad core. This week, AMD said that it would demonstrate a new quad-core microprocessor (four processor cores in a single chip) with a new micro architecture by the end of 2006 and deliver it to customers by mid-2007. AMD calls the design a "true quad core" to differentiate it from Intel's upcoming quad-core design, which is really just two dual-core chips packaged in a single die. Intel, however, might have the upper hand in this round as well: It intends to ship its quad-core chips by the end of 2006. AMD will counter that move with its 4x4, a chip that links two dual-core chips via a high-speed bus to get quad-core-like performance. God, I love competition.

Editor's Note:

Calling All Windows IT Pro Innovators!
Have you developed a solution that uses Windows technology to solve a business problem in an innovative way? Enter your solution in the 2006 Windows IT Pro Innovators Contest! Grand-prize winners will receive airfare and a conference pass to Windows and Exchange Connections in Las Vegas, November 6-9, 2006, plus more great prizes and a feature article about the winning solutions in the November 2006 issue of Windows IT Pro. Contest runs through August 1, 2006.
http://www.windowsitpro.com/AWARDS/innovators_2006.cfm