So why is the stock floundering?

because of me?

Or, actually, us! =D

"Operating cash flow: $7.1 billion". Man, that is HUGE.

People wanted more.

Too bad. It's still immense.

Microsoft bing is actually a pretty good service I am big google fan but I forced myself to use bing for 2 months and I must say I didnt find too much of a difference in the experience and actually bing was better.

http://www.realestatekhoj.wordpress.com

Someone openly wondered why MSFT's stock is floundering (and of course has been since the dotcom bubble).

Simple: the law of big numbers is a bitch.

Historically once you acquire a mega market capitalization, future returns shrink to almost zero. Inflation tends to consume whatever small returns remain to be had (MSFT has actually lost 50% of its market value in inflation adjusted dollars over the last 10 to 12 years).

Apple is next on the block for a decade of mediocre returns now that it's one of the worlds largest companies. That doesn't mean short it, just buy something else if you want a good return annually over the next decade.

"So why is the stock floundering?"

The two turds of Microsoft's divisions:

* Entertainment & Devices – the clowns responsible for the 8 year long Xbox train wreck, the forgettable Zune, and the dying Microsoft cellphone software.

* Online Services Business – these clowns look like they are trying to out do the 7 billion dollars wasted on the Xbox disaster.

One of these two turds is going to have to be flushed soon. And if Ballmer gets the dumped most likely whatever poor sod who comes in to clean up his mess will mercifully flush them both.

The morons responsible for the Xbox junk are forcing the suckers who bought the Red Ring of Death plagued Xbox 360 to pay hundreds of millions a year in online fees and still the entire division can only eek out a effectively irrelevant 165 million profit.

Even more mind boggling is how Microsoft has blown billions on the Xbox marketplace failure while letting the PC gaming market wither away. A market that was instrumental in their massive growth on home computers.

I think that unlike MSFT, AAPL has plenty of room to grow. Their iphone is a cash cow for them and will explode with cash growth once it opens up to more carriers. This would be like if MSFT windows was ONLY available with Dell computers and was now on the verge of opening up to all pc makers

Although Microsoft don't make much on it I do love my Xbox. Here is to hoping the project Natal will bring in some additional sales this fall.

While their entertainment division is not doing all that well, its beating the pants out of Sony. Sony is still losing money hand over fist even with their blu-ray cash cow.

I wonder why anyone would want to kill off one of the only divisions in MSFT that has any possibility to grow.

My only beef with Apple from a financial perspective is it seems impossible to match the kind of growth they've seen over the long term.

My guess is in a year or two they're in for a hard fall, and then people will be like: "Why'd it crash? I thought the party would continue indefinitely…"

Uhh, wasn't the xbox immensely profitable, and was profitable when other divisions weren't?

XBOX is one of the only things MS has going for it.

Most of their other products are in decline or being outdone by other commercial competitors, or in some case open source.

Although you are right the Zune was the biggest joke they every played, and it made them look like Apple wannabees except that they failed HORRIBLY at it, and that Windows Mobile is garbage and is dieing, trashing the XBOX is wrong.

What will ultimately kill Microsoft is their abysmal, piss poor and pathetic "innovation". Their process is broken IMO and competitors are closing in.

BTW the stock is doing great, its at $31.39 a share right now. Thats a high for them, they have been sub $30 for ages now.

They're creating markets where they don't exist. Look at ipad. They will grow because they innovate. MS stagnates because they don't innovate a god damn thing.

Fanboys, cue in about Natal now. Or windows 7, if you call that innovation (I don't lol)

"Buy the rumor, sell the news"

Microsoft is doing well both with Windows 7 and Bing. Bing keeps gaining market share.

For years now, AAPL has been in a position where it can't maintain it's growth. This was the same sentiment after the video iPod was released, and then after the iPhone was released and now after the iPad is released. AAPL will continue to grow because as someone else said they continue to create new markets.

But a tablet PC using their existing Phone OS is innovation. Really? Natal vs iPad. I'd pick Natal anyday when it comes to innovation. The iPad may make more money, but go back five years and ask someone what was more likely to hit the market in five years, and a finger based tablet would have been a given. Natal on a gaming console… not likely.

Clearly you are an idiot.

Then again you make an excellent point about Microsoft letting PC gaming wither.

The next generation of Xbox had better be compatible with PC gaming, in that I mean buy a game and play it either on the Xbox or on WIndows.

I'm very pleased for MS with this profit — while others may think that Apple beats them already, hearing this report sure is refreshing. Just wait until MS releases its Windows Phone (XNA games support for xbox) and for sure Ballmer will be wild again :D Reactions–http://j.mp/xna-games-4-0

I think this is the future of windows phone and xbox

Well done Microsoft.

Growth! People do not see much growth in MS. They have two big cash cows, Windows and Office, but there other attempts at growing have not been huge successes (and some, have not been successes at all). The amount of money they have thrown into certain divisions, (Xbox, Zune), have not returned growth that they should have. Many believe MS would have been better to spend that money elsewhere.

Whereas Apple have been expanding into new markets with great success. with iPods, iPhones, which have had huge returns. And the iPad may be another one of these.

MS was too late to respond to the iPhone with WM7, which is still not out.

I agree in premise: Apple's innovation is the reason it is where it is today; not to mention their marketing generates huge margins that enables them to be wildly profitable selling hardware.

However, again, the law of big numbers rules the day. Once Apple hits $14 or $15 billion in annual profit at some point in the next year or so, every time they want to grow just 10% in size they have to find another mega product that spits out $1.5 billion in profit every year. The iPad for example needs to sell about 10 million copies a year to do that for them; which it may do. Whether the sales come from existing products or new products, that's ridiculously difficult to keep up with.

Or to make a dramatic point. For Apple to double in size again, they'd need to own Windows and Office's total profit line (in terms of scale); that is, they'd need to control 85% of the desktop operating system market, and about the same of the desktop office market.

It gets really hard to keep pushing that boulder up the hill.

no natal

Project natal cant save xbox. They need wiimote clone.

And let us see if junk apps can save android from winmo7 assault.

Clearly you are an idiot man!

"Apple has been successfully expanding into new markets" – Remember the BANDAI PIPPIN gaming console?

Yes it was from apple! FAIL

LOL! SO true!

[...] [原文へ] [...]

Actually most of the revenues for MS comes from industrial buying. For Office & OS both. And these organizations are unwillign to experiment with other products.

The other day I saw a public undertaking employee tweeting " IE is the only browser that follows standards completely."

So how do you feel now?

:) Arvind

Pippin? That was 15 years ago. If you want to point to an Apple "failure," look at Apple TV, not some 15-year old experiment that barely made it to market.

Apple has been amazingly successful in releasing a series of major products in the last 10 years, while MS has ridden along in the Win/Office cash cow. But sooner or later that cow is gonna get slaughtered.

[...] this article: Windows 7 Pushes Microsoft's Profits Up 34.5 Percent; Bing And … 34-5-percent, healthy, healthy-quarter, more-modest, net-income, percent-increase, [...]

So Microsoft makes 34% profit while Apple makes 24% (3 out of 13 billion), while Microsoft has 3x the employees too….and people only complain that Apple products are overpriced?

It seems to be Microsoft must add one heck of a premium price to their products if they can surpass Apple like that.

[...] Windows 7 Pushes Microsoft’s Profits Up 34.5 Percent; Bing And Xbox Live Kicking It Too (Slide… [...]

ipod prototype leakedhttp://itssotech.com/2010/04/24/two-ipod-touch-pr...

[...] Read more on TechCrunch [...]

yea, because of you, pal !

Wow. Bit of a slap in the face on that one. You couldn't do the slide presentation on either Silverlight or HTML 5? You had to take this opportunity to use Flash? You just had to? Techcrunch is written almost as badly as Engadget. You constantly bring Firefox to its knees, and that's without flash. Just the horizontal article selection at the top takes a minute to load, then jitters and another 30 seconds later the page is usable. So much for a 'tech' site.

[...] року. За останній рік втрати онлайн-департаменту Microsoft становили близько $300 [...]

[...] show a decline in advertising revenues, down 19 percent. Google’s ad revenue was up 21.5 percent, Microsoft’s was up 8.8 percent, and Yahoo’s was up 3 percent (although the display portion was up 20 percent). [...]

[...] show a decline in advertising revenues, down 19 percent. Google’s ad revenue was up 21.5 percent, Microsoft’s was up 8.8 percent, and Yahoo’s was up 3 percent (although the display portion was up 20 percent). [...]