Microsoft launches Office 2013 and announces it's first EVER loss. 492 million us dollar loss. CEO Steve Ballmer hangs on.

Microsoft really warrants a blog of its own, given that it's in the news so often now. And none of it good.


On Friday it has reported its first loss, ever. 
492 million usd of a loss versus a 5.87 billion profit a year ago.


Hot on the heels of the controversial acquisition of Yammer in June by Steve Ballmer which left everyone scratching their heads. 1.2 billion? You're kidding? http://streamabout.blogspot.ie/2012/06/microsoft-acquires-yammer-for-12.html


Then the controversy about Steve Ballmer work practices in a Vanity Fair article which caused rumours before it was published http://streamabout.blogspot.ie/2012/07/vanity-fair-august-article-to-add-to.html


And worse problems once it was http://streamabout.blogspot.ie/2012/07/vanity-fairs-expose-of-microsoft-and.html


And the NBC divorce last week http://streamabout.blogspot.ie/2012/07/microsoft-and-nbc-divorce-from-msnbc-it.html


All of this in less than 4 weeks and yet, CEO Steve Ballmer hangs on in there. Now comes the loss. 


Critically it's a watershed, because it's the first ever - but in reality, it's a loss because of an adjustment on the ridiculous 2007, 6.2 billion usd investment in an online business, aquantive, or so Microsoft would argue. However, if you make an awful investment of 6.2 billion usd, you have to adjust for it. In making the acquisition you took the risk that it would put profits at risk.


So there's no escaping it and the headlines will be Microsofts first loss.


Windows sales too in those figures, on further analysis, weakened with a 13% drop in Q4 ending in June although an accountancy policy change has also made the drop look worse. Even allowing for that adjustment, its sales are down.


Hopes more and more being pinned on the October release of Windows 8. Although everyone is forecasting a decline and a weakening in computer sales despite the fact that insiders are saying, it's a good version. With no one to buy, it won't matter in some ways.


This week Steve Ballmer also launched the latest version of Office (called 'Office 2013' surprisingly) which runs on around 90% of business pcs with a new focus on touchscreen and social interaction contributing more than half of microsoft's profits (or losses). So it's important and it was well received. 


The range of applications - Outlook, Excel, Word, PPT and one Note have been updated and integrated through the Skydrive (Microsofts cloud service) for instant updating. Skype is fully integrated too.


Definitely, the widely held view that this was a good launch and a step up. Weakening computer sales though, is outside of Microsoft's control and the deluge of bad publicity is gaining momentum. 


In particular, a loss, is a turning point for this money making machine. It's hard to think of anything else that could put more pressure on CEO Steve Ballmer. 


I'm actually amazed he's still standing this weekend and clearly, has a lot of friends from within, notably Gates who appointed him in the first place and at the time, surprisingly.


Microsoft is now a company in decline and as Steve Jobs said, it will remain so with Ballmer at the helm. It was the great Internet company, the great software company, the great browser supplier and great at a lot of things.


Apple's iphone does more business than the whole of Microsoft now.
It ain't what it was, anymore.


Hard to imagine that investors aren't beginning to think, it's time to get out.
Very few will be piling in.

Vanity Fair August article to add to pressure on Microsoft. CEO Steve Ballmer's window is closing.

This is Steve Ballmer. CEO of Microsoft. The man who took the reins from Bill Gates in 2009 when Gates stepped back. Hardly Steve Jobs now is he? Although I think he tries to be. I mean who came up with the track "get on your feet"? Kind of like playing "simply the best". Cringeville.


There's an awful lot of people having a go at Microsoft at the minute.
And it has to be putting immense pressure on CEO Steve Ballmer.
One wonders if he'll survive it and especially after an article in Vanity Fair due on the newsstands in August.


But they're having a go firstly, because it's the launch of Windows 8 coming up. Oh, didn't know? Exactly. And remember the excitement, the queues for 95.


Secondly, the acquisition of Yammer for 1.5 billion (yep, billion) of a company few of us ever heard of, and which earns little revenue, is being seen as a bizarre way of buying yourself onto the front pages. One way to get that Facebook/Instagram 1 billion limelight. I blogged about it here http://streamabout.blogspot.ie/2012/06/microsoft-acquires-yammer-for-12.html


The official Microsoft announcement photo two weeks ago, did little to help things too and here it is. Steve Ballmer and the Yammer boys looking like something from the 70's rather than the new leaders in Social Media. Shocking.

As an aside, interesting too that when you go onto the Microsoft news centre and search 'Yammer' - nothing comes up. So Microsoft could do with updating their site - which for Microsoft, is pretty poor.


Thirdly, Microsoft have just taken a 6.2 billion write down this week following their disaster purchase of digital network aquantive in 2007 - then the biggest deal in Microsoft history. The 8.5bn acquisition of Sykpe by Microsoft in 2011 beat it. And what exactly have they done with Skype? Nada. Looks the same to me except with higher prices and more advertising. Vision?


But this write-down, wipes out fourth quarter earnings and that will have a stock/investor issue, adding more pressure.


The acquisition was seen at the time, as a response to Google's acquisition of Doubleclick (with which I was involved in a small way in Ireland) because the Microsoft move came only a month later. Kind of a "anything you can do" thing. But one huge 6.2 billion loss.


Fourthly, the success of Apple has been one-in-the-eye for Microsoft and continues to be. Apple's iphone division alone is worth more than Microsoft. Here's the genius Steve Ballmer in 2007 on the iphone. "500 dollars for a phone? You're kidding".

I could post the video where he laughs off the ipad or indeed this next one where he's not a fan either of the Android phone from 2011. Jesus.

And of course he teamed up with Nokia...who've recently had their ratings cut to "junk status".

So "visionary" doesn't exactly spring to mind and the company is slowly disappearing into a morass. Yes I know about Bing and Xbox but this was THE dominant player worldwide that now is being, well, just eroded. 


But lastly, the real crowning glory this week is an article in Vanity Fair August edition which seems to slam work practices at Microsoft and makes the company totally uncool. This sort of publicity might be the straw that broke it because it will be hard for Ballmer to escape it. 


Sometimes publicity is the killer blow because it's so public.


Titled 'Microsoft's lost decade' it's written by well regarded scribbler, Kurt Eichenwald.


It's not on the newsstands yet, but Geekwire have seen a full copy and refer to it as "epic". In other words, explosive.


Forbes have referred to it as "a devastatingly destructive management technique at the heart of Microsoft’s problems" and others are calling the exposure "Microsoft's downfall".


Techcrunch don't have the story because when they asked for a preview, they were asked for a fax number to "fax it on over". Honestly. And they've written a good humorous piece on that......
http://techcrunch.com/2012/07/03/can-someone-send-techcrunchs-fax-number-to-vanity-fair/


The controversy, supported by interviews and emails collected, is about management style and creativity. Or lack of.


It's based around a work system for employees in Microsoft called 'stack ranking' where employees are rated from good to poor. And according to Eichenwald that meant that "Every current and former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees.” 


“If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, 2 people were going to get a great review, 7 were going to get mediocre reviews, and 1 was going to get a terrible review,” says a former software developer. “It leads to employees focusing on competing with each other rather than competing with other companies.”


Which could well be the reason why the company under Ballmer, flounders.
Basically, it crippled the company and stifled innovation.


And from what I know it seemed to be a dreadful place to work which in itself is bizarre given the 'great places to work' awards Microsoft have achieved. I always wondered about those awards though, always did. I saw companies winning them who I knew to be dreadful.


But they were big companies who'd always take a table or two at the Awards dinner.


We'll see what happens when Vanity Fair comes out.
Watch out for the noise and watch out for Steve Ballmer.
Except it to be huge.
His window is closing. (sorry).