Microsoft Shits the Bed – stock down 8% after hours – PLEASE SPLIT UP THIS COMPANY!
Microsoft has some serious problems. Their business model is being threatened on all fronts. Go here if you want a liveblog of their earnings call. They missed street estimates of revenue by $1B. I know that in reference to the US economy, the “trillion” word is said a lot so that may desensitize us to the word “billion,” but make no mistake… that’s… A LOT.
An analyst on the call asked Microsoft about margins, and the CFO said he’s not making any promises. He better not – their number one piece of business is selling operating systems. When your competitor, Apple, viewed as the maker of premium products, says it is going to sell OS X Snow Leopard for a flat $30, that sure makes Windows 7 pricing look downright stupid.
Their online services revenue was down by 14% too. I have said this once and I’ll say it again: MICROSOFT NEEDS TO SPLIT ITSELF UP. They have no synergy. Imagine how good Office could be if it were free from any sort of corporate mandates from HQ… The XBOX is great. They should focus on making it not sound like a jet engine, not on how to integrate with Zune. Speaking of Zune, can they just put that out of its misery? It just seems like there are so many wheels at Microsoft that aren’t turning together. Either fire Steve Ballmer and find someone who can align the wheels… or take apart the car and let each part run freely. Until they do one of the those two things, I’d be shocked if MSFT turns around any time soon.
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