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Microsoft blasts out strong fourth quarter, year
July 19, 2007 -
Microsoft to get early Silverlight, Web tools out the door
July 26, 2007
The largest software company is hosting its Financial Analysts Day at its Redmond, Wash., headquarters, where Ballmer described Microsoft's strategy as making several big bets on emerging businesses while drawing more revenue from its mature desktop and server software franchises.
Microsoft is transforming its product development and business models around "software plus services," or software complemented with online services, he said. The company has been criticized by financial analysts for being slow to capitalize on advertising revenue as search giant Google has done.
"We are hell-bent and determined to allocate the talent, the resources, the money, the innovation to absolutely become a powerhouse in the ad business," Ballmer said.
Company founder Bill Gates, who made a presentation before Ballmer, announced that Microsoft is opening a dedicated center to research online advertising and search called the Internet Services Research Center. Headed by Harry Shum, the center's research will focus on search relevance, spam prevention and searching scanned images, such as book pages.
Ballmer said that the company is tackling disruptive technology changes head-on, namely the shift to advertising-supported Web services. Its commitment to online services and consumer devices are necessary because they provide avenues for the company's software.
He defended continued investments in two unprofitable divisions: Online Services and its Entertainment and Devices division. Microsoft's multiyear commitment in server software for corporate data centers diversified the company and created a multibillion dollar revenue engine.
"We're bringing the same kind of vision and tenacity that is in our DNA that drove us into the enterprise business into consumer devices and online services," Ballmer said. "We are going to be an advertising company, and we are going to be a devices company."
Even coming off a strong fiscal 2007 performance, Ballmer said he has "never been more optimistic" about Microsoft's prospects, outlining areas for more revenue. Those included stepped-up sales of Windows through PC manufacturers, Xbox game consoles, Windows Mobile phone software, increased market share of server software, office worker productivity software for small and medium-size businesses and advertising from online services.
Giving some upbeat reports on its mature business, Microsoft said it has sold 60 million copies of Windows Vista since its launch earlier this year and that its SharePoint Web portal business has grown to $800 million. Ballmer said that by the end of its fiscal year 2008, there will be over 1 billion copies of Windows installed on PCs.
Furthering its strategy to court Web developers and designers, Microsoft said that by the end of the week it will release Silverlight 1.0 Release Candidate. Silverlight is a download for displaying media and interactive content in Web pages. It competes with Flash and other plug-ins that add interactivity to Web sites.
During Gates' presentation, he described Microsoft's vision for improving users' computing experience with online services; better user interface technology, such as speech and cameras; and a smooth transition among handheld devices, PCs and other devices.
He said that broadband is allowing Microsoft engineers to reconsider the computing paradigm, where resources typically confined to a single machine, like storage, can be done in the Internet "cloud."
Microsoft is building a platform for that new computing paradigm with Chief Software Architect Ray Ozzie "driving the revolutionary new platform that is service centric," Gates said.
- More from News.com on this story's topics
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Save up to $300/year on phone bills
- Ballmer to investors : Be patient...(not)
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by Llib Setag
July 27, 2007 11:38 PM PDT
- July 26, 2007 5:50 pm ET
IDG News Service
Microsoft?s Ballmer asks investors for patience
By Nancy Gohring, IDG News Service
Microsoft?s CEO emphasized the importance of attracting talent
and urged shareholders to be patient with the amount of time it
might take the company to pursue its various business models,
speaking during Microsoft?s annual financial analyst meeting on
Thursday.
?Vista doesn?t get done by three people in a garage in three
days,? said Steve Ballmer.
The company is making big bets and some of them will take
time to develop. ?A great misconception in the tech industry is
that most successes happen overnight,? he said.
The two main areas that Microsoft aims to expand into are
advertising and devices. While Microsoft once was largely
defined as a desktop company, it has proved that it can expand
into new sectors, Ballmer said. Around 18 years ago, Microsoft
decided to get into the enterprise market and now is a major
enterprise software company, he said.
?We are hell bent and determined to allocate the talent,
resources, money and innovation to become a powerhouse in
the advertising business,? he said. Microsoft is currently in third
place in online advertising, behind Google and Yahoo, but he
pointed to some Microsoft successes like deals to provide ads
for Facebook and Digg as evidence of potential to improve that
position.
On the devices side, products like Windows Mobile, set-top
boxes, Zune and Xbox will be key to Microsoft?s growth in the
devices market, he said. ?We need to have this business outlet
for our software creativity to continue to grow and innovate and
be relevant,? he said. Microsoft will continue to use a variety of
models in which it will provide a mix of software, hardware and
services, while sometimes relying on partners for some of those
components.
Ballmer emphasized how important it is for Microsoft to
continue to attract leading talent in order to drive these
initiatives forward. In its fiscal year 2007, Microsoft hired almost
13,000 people, including 4,000 in product development areas,
he said. Those hires continue to work in offices around the world
and they come from many different countries. As an example of
the type of people working at just the Redmond, Wash.,
headquarters, 1,000 employees there speak Russian, he said.
Those workers will help bring about new innovations during the
next ten years, a period that Microsoft Chairman Bill Gates said
he expects will be more exciting than that past 30 years of the
company?s history. That?s because the processing power of
computers and the speed of broadband networks is enabling
new types of applications. Computers aren?t self-contained
devices like they once were. Instead, storage and applications
can be handled remotely and users can access them from a
variety of different types of devices, he said. That opens up the
potential for new devices and applications, he said.
Advances in user interface models are key to those future
innovations, he said. ?Typing and using a mouse is only one way
to interact,? he said. Cameras, pen-based systems and now
touch-based user interfaces will lead to new possibilities in the
future, he said.
He demonstrated Microsoft?s Surface computer offering. Of all
the demonstrations that he has done over the decades, this is
one that he?s been most surprised about how people respond,
he said. People very quickly envision complex things that could
very easily be done with the technology, he said.
Microsoft executives are spending Thursday talking to a group
of financial analysts. The annual meeting comes a week after the
company reported that for the first time its yearly earnings
surpassed $50 billion. That milestone comes after the company
recently took a $1 billion charge related to fixing faulty Xbox
game consoles. It also comes at a time when the company faces
the challenges of adapting to a marketplace that is shifting
toward hosted services and away from PC-based software.
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