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May 04, 2006

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King Troll

HELL YES HENRY!!!!!! Another one bro!!


FIRSTTTT

King Troll

Who do they all buy the Capex equipment from? I would think that it would be great to invest in those stocks.

EMC Cicso, JNPR, Sunw? or am I still stuck in year 2000.

Steve D

Google spends most of that capital on Googolplex and hardware - I hope you don't assume they spend all that cash on improving relevancy of search - making it smarter. If Microsoft means to spend on just improving relevancy of search (which is all that matters), they can put significant pressure on Google. Also, don't forget about Microsoft Research, which has tradition of 15 years of doing deep stuff without any short term financial goal in mind. Many research areas are focused on AI and machine learning and they are going to bring those ideas to the market through their search tools. Google is playing big catch-up in fundamental research as compared to MS. I would not write off someone with that kind of assets who is also patient and persistent and increasingly getting more and more focused on search just yet.

ZF

Interesting that we've reached a point where the only incremental resource MS can credibly be claiming to throw at this market is cash.

Notice that this is because people would tune out or be laughing hard if they claimed they were about to bring to bear their technical resources, or determination, etc. That's all been announced and tried already.

I have no idea what their prospects are, but their communication strategy is a sorry thing to behold.

Neal Lachman

This is just the first of many positives coming up for MSFT in regards to MSN. The Redmond dragon is spewing fire again, finally.

TallTroll

>> I hope you don't assume they spend all that cash on improving relevancy of search

Since their expenses in improving search are largely reflected in the payroll and employee stock plans etc, its hard to tell. I know MS are having a hard time getting talent; heck they are having a hard time getting to TALK to talent. I can think of a couple of superstar grade consultants who were offered huge contracts to consult with MSN, and turned it down. You couldn't put it on your CV, because anyone who knows would laugh at you.

MS need 2 things to start attracting the talent :

1) A Matt Cutts type figure to build SEO relations
2) A search engine that doesn't rank auto-gen crap spam in 1 week flat. They get no respect

>> Many research areas are focused on AI and machine learning

I SERIOUSLY doubt it'll help MS, not yet anyway. Bizarre as it may seem, the WWW is a very human, social place, and machines have real trouble dealing with and understanding that.

Google aren't exactly in a great place at the moment either, with some serious vunerablities in their algo (essentially you can buy nearly any #1 you want at the moment). The next "big thing" in search is (IMO) true semantic analysis. I will concede that MS could reach that first, and if they do, they will have a massive advantage. However, the downside is that true semantic analysis will kill off a lot of corporate sites.... the sort of sites that spend a lot on ads. Hello, hand-picked results....

Victor

The CAPEX wars are beginning (and like the clone-wars, they won't be pretty):

http://money.cnn.com/2006/05/05/technology/fastforward_fortune/index.htm?source=yahoo_quote

Googlicious

While I am not a fan of Google as an investment, Steve Ballmer is the consumate moron. He sounds like a Federal government employee. Does spending somehow equate to success? They can't give away the xBox in Japan regardless of how much they spent. Microsoft needs to clean house in the midlevel/senior management ranks in a handful of areas. Ballmer should go. Frankly, so should goofy Gates.

Neal Lachman

Googlicious,

You are talking about Gates and Ballmer? Guess how big these goofs have made MSFT. Gates is not without reason the richest man in the world. He didn't get it as a gift. He didn't have you kind of people rooting for him, yet he is the richest and most successful business person on the planet. And a twat like you says he shoudl go?

You are a jealous moron. And this is unique for me to do... i usually don't call people names, but your bias speaks volumes about your agenda. By hating you don't make MSFT go away.

Loser.

Walter

Neil, your bias is showing, AGAIN.

One thing is for certain, no one is jealous of MSFT shareholders for the past 8 years. Sympathetic maybe, but definitely not jealous.

Apt analogy to your Gates is richest man in world: Hank Aaron holds the home run record but no one is betting he will hit more.

MSFT isn't going out of business. But investors don't like paying a market premium for a consistent market under-performer.

Neal Lachman

I am not talking about stock in this case. The analogy with sports is a lame one, and you know it.

Walter

"I am not talking about stock in this case."

MSFT isn't a social, political or charity institution. As a for profit corporation MSFT's primary responsibility is as a fiduciary to its shareholders. What better way to measure primary managerial performance than via stock price?

"The analogy with sports is a lame one, and you know it."

You saying its lame doesn't make it so. The analogy wasn't to sports. It was to Hank Aaron - a man who's claim to fame is as a result of what he did many years ago. Exactly as is Gates' claim to fame (and wealth).
Maybe if your bias wasn't clouding your vision, you might see that the person above that you called a moron might possibly be the bearer of prescient truth.
A stagnant stock performance over 8 years says SOMETHING.
Maybe the problem is Gates and Ballmer? To dismiss the possibility out of hand with disparagement might itself be cause for the label of moronic.

Neal Lachman

Walter,

You can and should not compare an apple with an egg. Gates is a businessman, and founder of a large company. Some sportsman -no matter how grandiose and great of a figure- has its personal talent, and such for a typical short time.

Investors feel good about Gates because he is linked with the company in soul and share. He is the last guy who would fu*k over MSFT willingly. He is also the guy who gave Ballmer the reigns, and who says Ballmer did a terrible job? Do you remember the old saying, "It's hard to reach the top, but it's harder to remain there".

Share value stagnancy is relative in terms of the existence of a business. The fact that they are the largest and the top software company, and now diversifying like crazy, is an absolute value, not merely theoretically.

The beauty of a public company is that you can exit... in 15 minutes or less, if you are unhappy with the company's (and management's) performance. If you feel sorry about the companies shareholders, you should feel sorry for Gates too since he lost double-digit value not so long ago. If the investors are so eager to make quick and major profits, they should take 75% of their investments in MSFT and go for Google. Do you have any idea why they aren't collectively deserting MSFT and jumping on GOOG's bandwagon? I guess you don't.

Neal Lachman


U.S. dismisses concerns over new Microsoft browser

WASHINGTON, May 12 (Reuters) - U.S. antitrust authorities on Friday rejected concerns that a search feature in the new version of Microsoft Corp.'s Internet Explorer browser would give the company an unfair advantage over Google Inc.

http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:reuters.com:20060513:MTFH70672_2006-05-13_01-26-10_N12215093&symbol=MSFT.O&rpc=44

Chris Seilern

This is just ridiculous.

First, Google became Google with NO capex. The biggest risk going forward is not MSFT, it is Google themselves and their ability to manage this out-to-lunch expansion (take a look at http://www.google.com/support/jobs/bin/topic.py?loc_id=1100&dep_id=1173&by_dep=1)

Second, MSFT has a history of being a brilliant me-too with the patience of Job. Anybody remember WordPerfect, 123, Harvard Graphics, FoxPro, Palm, Lotus Notes, etc...? These were all huge in their space at the time. Yet MSFT, with patience, money and above all longevity has prevailed every time. That's what they do.

I'm no MSFT fan, but additional entrants in search will drive lower prices. That will ultimately choke GOOG's Free Cash Flow and all the goodies that go along with that (high PE, high Capex, fast growth, ludicrous expansion, etc..). So how MSFT spends per year is not the most relevant question. The most relevant question, is how long they want to do this.

TallTroll

>> Google became Google with NO capex

Um, yeah.... but that was years ago, and technically they were piggybacking off Stanfords network. The Google machine is a lot more complicated today than it was then, and the WWW has grown enormously. They could not replicate what they did then, now.

>> MSFT has a history of being a brilliant me-too

True.... but the suck at being a search company. They don't have the data, they don't have the talent, and without those, money is worthless. They have to make MSN a cool place to work, and a cool SE to use, otherwise they might as well just pack up and go back to buying results in

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