A recent anonymous comment on this site inquired or asked "Did We Give Up". The comment inquired why we failed to respond or post comments concerning Microsoft's last quarterly earnings. Well, the comments can be viewed at http://www.networkworld.com/community/node/43995
In response to the question "Did We Give Up?", the answer is no. We have been engaged in other projects that have consumed time and attention. However, if the question was "Have you lost HOPE?" the answer would be "Yes".
The campaign was initially launched in mid-December 2008. It gained attention from various blogs. It secured interviews with various blogs and reporters, including an article with PC Plus magazine. It obtained support from various Microsoft employees (who we thank for offering analysis and feedback). It also secured support from various shareholders.
Unfortunatley, it appears evident that Microsoft's fate is secured. Regardless, of conducting analysis and securing support, regardless of other sites indicating the same analysis, it appears Microsoft is headed on a path of no return. To quote the Phantom of the Opera "Microsoft has passed the Point of No Return".
Initially, the campaign indicated that Microsoft is relaint on its cash cows which will eventually fail to provide the desired revenue. The campaign indicated that Microsoft required a "New Strategy" to alleviate this dilemma. The campaign referred to the growing trend of SaaS, handhelds or mobile, and also online.
Despite trying to influence change, despite media attention, The SLT continued with its "Strategy". This resulted in the well publicized reality of a 30% decline in revenue. The primary direct result of less OS revenue.
Recently, the company has lost a lawsuit to a Canadian company. Refer to: http://www.marketwatch.com/story/microsoft-loses-in-toronto-firms-patent-suit-2009-08-12
The reality of the above article is that Microsoft is confronted with losing additional revenue.
This will potentially have a substantial impact on company revenue. Word is perhaps the most recognised and utilised product in the Office Products. This is subsequently another nail in the coffin.
The company is losing revenue with OS. It has lost Word. The trend is moving towards Saas and netbooks, which offer less revenue.
It is languishing in the online sector. The Yahoo and Microsoft deal will still only provide 30% share compared to Google controlling over 60%.
The company recently announced a deal with Nokia. Refer to: http://www.marketwatch.com/story/microsoft-nokia-form-mobile-computing-alliance-2009-08-12
However, the alliance will fail to compete with Apple or RIM. Therefore, Microsoft will fail to compete in this growing sector.
We don't believe the campaign has the definitive answers. However, it secured support from reporters, employees, shareholders and analysts. Microsoft employees provided analysis and feedback concerning the "New Strategy".
We have lost Hope that the SLT will ever understand the dilemmas confronting the company and listen to outsiders (this includes analysts, reporters, shareholders). Therefore, it appears evident that Microsoft will continue to loss revenue. It will fail to innovate. It will fail to recognise trends. It will fail to become relevent.
It appears more evident and understandable why msftextrememakeover gave up and Mini Microsoft creates fewer posts. The SLT has refused to listen to legitimate complaints and solutions posted on Mini Microsoft for years. The SLT appear to be blind and oblivious to the realities confronting the company. Unfortunately, it is to the detriment of employees and shareholders.
The SLT has failed to create shareholder value for a decade. It has failed to create shareholder value for a decade with the shares trading at approximately $23 per share or the same level for LONG-TERM. It has failed to listen to complaints for a decade. It has made false promises and ignored reports from other parties (newspapers, blogs, reporters) for a decade. Sadly, it appears obvious that the SLT will continue its "Strategy" adding more nails to the coffin until its time for the shareholders and analysts to deliver the eulogy.
Its time to rally support and effect change.
We can be contacted at thecrandreagroup@hotmail.com
Thursday, August 13, 2009
Monday, July 6, 2009
Eric Jackson of Ironfire Capital
In past blogs we have made reference to Eric Jackson of Ironfire Capital. In 2007, the firm acquired less then 100 shares of Yahoo. Utilizing the Internet the firm implimented "Plan B" and rallied support from frustrated Yahoo shareholders.
Mr. Jackson has a blog called Breakout Performance. In this post we wish to provide the article Mr. Jackson posted on June 10. The article reiterates what this campaign has been stating regarding R&D spending and a reality check.
Mr. Jackson has a blog called Breakout Performance. In this post we wish to provide the article Mr. Jackson posted on June 10. The article reiterates what this campaign has been stating regarding R&D spending and a reality check.
Eric Jackson
A couple of weeks ago at the D7 Conference in Carlsbad, Calif., Microsoft(MSFT Quote) CEO Steve Ballmer boasted the software company could create a lot of new things by spending $9.5 billion annually on research and development expenses. That's right, Microsoft spends almost $10 billion each year on R&D. That's more than any other company in the world, by a long shot.R&D spending at many tech, pharmaceutical or biotech companies is treated as motherhood and apple pie. R&D is never a bad thing -- it's only good. More is always better.
When you invest in research, you are investing in hope and possibilities. No matter how much you have lost in past projects that never panned out, every new dollar invested in a R&D project holds the possibility that it will deliver a large multiple of that dollar in future earnings before interest, taxes, depreciation and amortization.
Spending a lot on R&D would be a good thing for Microsoft if it was generating a large return from that investment. But that's not the case and it hasn't been the case for a long time.Ballmer's comments show that Microsoft's senior leadership is proud of its continued investment in R&D and sees it as a source of competitive advantage for the company. On an absolute dollar comparison basis, Microsoft is making a much bigger bet than most in this area.Microsoft spent 46% more than the $6.5 billion IBM(IBM Quote) invested in R&D last year, 252% more than Oracle(ORCL Quote) ($2.7 billion), 763% more than Apple(AAPL Quote) ($1.1 billion), and 390% more than Google(GOOG Quote) ($2.8 billion).
Yet, most would conclude that Microsoft isn't 9 times as innovative as Apple, despite the discrepancy in how much money it is pouring into its research activities. Beyond its Office, Client, and Server core franchises, it's difficult to name innovations associated with Microsoft.
What is also remarkable about Microsoft's spending on R&D is the cumulative total racked up over the years. In the last 10 years, Microsoft has invested $62 billion in the R&D area. Microsoft could have bought back nearly 40% of its stock with that amount; it could have beefed up its dividend; it could have made a string of acquisitions which presumably would have continued to grow its top and bottom lines more than what it has achieved organically.It's hard to know exactly what Microsoft has delivered for its R&D investment; it doesn't break out the numbers according to its five business segments. However, the two smallest business segments -- Entertainment & Devices, which includes the Xbox, Zune, and Windows Mobile software groups, and Online Services, which includes Search, and the Microsoft MSN, Hotmail, and Messenger properties - likely have taken the lion's share of the investment. Combined, these two divisions have delivered $71 billion in revenue for Microsoft over those 10 years and $15 billion in losses.
So, what Microsoft's $62 billion R&D investment has led to a $15 billion loss for at least those two businesses in 10 years.Ballmer has argued that Wall Street investors are too focused on the short-term. One large Microsoft investor told me recently that Ballmer had complained loudly to him about the short-sightedness of investors who called on the company four years ago to do a large stock buyback and pay out a dividend with the excess cash on Microsoft's pristine Microsoft balance sheet.
Ballmer apparently said to this large investor: "We did everything they asked for. We did a huge buyback. We did the biggest one-time dividend ever. And what good did it do us?"Ballmer's right. Total shareholder returns, or TSR, for Microsoft since it initiated its stock buyback and dividend program are down 25%. For the last 10 years, TSRs fell 47% (as of early April). This includes returns from dividend payments (including the big, one-time dividend of $3 a share), as well as stock appreciation, over that time.Is 10 years a sufficient amount of time for a shareholder to wait to judge a company's management team for how it has performed?
Those TSR numbers are clearly unacceptable and likely reflect poor investment decisions and loss of confidence by shareholders in the future prospects for the company.Over that same 10-year time period (again, as of early April), Apple's total shareholder returns have been 826%, Nintendo's have been 243%, Oracle's have been 166%, IBM's have been 3%, and Nasdaq's returns have fallen 37% -- all substantially higher than Microsoft's TSRs.
If the predominant Microsoft strategy of investing more in internal R&D, steering away from acquisitions, and keeping tight control of the five business segments has led to these results in the last 10 years, should shareholders expect that the same approach will lead to different results in the next 10 years?
Are we being "short-termists" or "flippers" of the stock by pointing out these results and suggesting they should have been much better?
R&D spending can lead to blockbuster returns. And Microsoft has a big advantage relative to its competitors in that it can invest enormous sums for future product development. But Microsoft, in being proud of the fact that it can spend almost $10 billion a year on R&D, is like a driller of oil and gas being proud of the fact that it can drill thousands of dry holes. It doesn't matter what you spend on R&D; it only matters what return you make from that investment for your investors. So far, Microsoft hasn't delivered on its promises.
A private-equity investor friend of mine once told me that he only liked investing in companies who practiced "small 'r' and large 'D' R&D" - meaning he wanted to see fewer ivory tower white coats and more of an emphasis on taking cutting-edge ideas and technologies out of the lab and building a real product and revenue stream around it. That process requires discipline, but it can be managed.Microsoft isn't the first large company to face this challenge of effectively managing its R&D process. Hewlett-Packard (HPQ Quote) lost its way a few years ago. Pfizer(PFE Quote) and other "big pharma" companies are facing similar questions around their R&D activities.
Instead of patting Microsoft on the back for its continued spending on R&D, investors and the press should be asking, "Where's the beef?" The onus should be on the company's management to articulate why its status quo approach for running this function will lead to different results in the next 10 years. Otherwise, I can think of several better ways to spend the next $62 billion of cash flow.
This campaign fully agrees with Mr. Jacksons assessment. It is time that shareholders speakout against Microsoft and its investment practices and its strategy.
To offer support through shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
Thursday, July 2, 2009
"Ads" Fail to Add Value
Various companies have failed to advertise and market their brand successfully. Ask.com has through numerous campaigns failed to increase its brand perception. Microsoft has also fallen into this category.
It is without dispute that Microsoft suffers from a battered image. Through our research we have discovered such sarcastic comments as Microsh*!. Please forgive the vulgarity. However, with such references it is clear that the company has poor brand perception.
Part of the poor brand perception is the failure to produce and market superior products. The company has offered Vista, Zune and other failures. As one Microsoft employee stated "if we can sell garbage and get away with it we will sell garbage".
Consumers want superior products. They want products that work. They want products that offer features. They want products that don't break or crash or freeze. They want products that are compatible with other products. In most of these areas Microsoft has failed.
Microsoft has also failed in changing its image. If you suffer from a poor image the logical strategy would be to improve it through some serious PR work and campaigns. However, this is an area that Microsoft has failed miserably.
Julie Bort at Microsoft Subnet was a tremendous catalyst for this campaign gaining attention. Julie provides some insight into Microsoft and its advertising campaigns. Refer to: http://www.networkworld.com/community/node/43240
It is without dispute that Microsoft suffers from a battered image. Through our research we have discovered such sarcastic comments as Microsh*!. Please forgive the vulgarity. However, with such references it is clear that the company has poor brand perception.
Part of the poor brand perception is the failure to produce and market superior products. The company has offered Vista, Zune and other failures. As one Microsoft employee stated "if we can sell garbage and get away with it we will sell garbage".
Consumers want superior products. They want products that work. They want products that offer features. They want products that don't break or crash or freeze. They want products that are compatible with other products. In most of these areas Microsoft has failed.
Microsoft has also failed in changing its image. If you suffer from a poor image the logical strategy would be to improve it through some serious PR work and campaigns. However, this is an area that Microsoft has failed miserably.
Julie Bort at Microsoft Subnet was a tremendous catalyst for this campaign gaining attention. Julie provides some insight into Microsoft and its advertising campaigns. Refer to: http://www.networkworld.com/community/node/43240
Follow the link in the article to view the choices of the worst ads. The sad reality is that Microsoft continues to fail to capture consumers through advertising.
Regrading the recent IE 8 commercials refer to:
http://news.cnet.com/8301-17852_3-10276705-71.html?tag=contentMain;contentBody and refer to http://news.softpedia.com/news/Internet-Explorer-8-Vomit-Video-Gets-Pulled-115692.shtml
The ads are hosted by Dean Cain. However, the most recent called "OMGIGP-Oh My God I am Going To Puke" is repulsive. Who wants to watch someone puke during a commercial. The sad reality is the ads made me want to puke. Consumers are use to brand association. Lets refer to Win 95
http://www.youtube.com/watch?v=5VPFKnBYOSI
The Win 95 commercial was terrific. It had the Stones playing in the background. Everytime you thought of Win 95 you thought of "Start It Up". Incredible brand association. Now, the same company creates a commercial were IE 8 is forever linked and associated with Oh My God I am Going to Puke. There is marketing genius at its worst.
I think that its time Microsoft fire its ad agency?
Perhaps what is the most disconcerting with the recent ad is the message it delivers. The puke is repulsive. However, the feature it is trying to promote is watch and view Porn with privacy. Lets acquire IE 8 with "In Private Browsing" with no history so we can view PORN. Well, there is a selling feature to promote to consumers!!!
What demographic and audience is this ad trying to capture?
Is Microsoft seeking to expand its IE 8 into the prison markets?
Thankfully, the ads were yanked from the air. Yet, the company also yanked the Seinfeld and Gates ads. Yet, they said it was all part of the strategy. Well, that is certainly believable.
Why are they spending shareholder capital on such poor ads that eventually get pulled from the air?
Do they really think these ads are going to create excitement with consumers to buy the products?
Word of advice Microsoft. Revert back to creating excitement. Use brand association similar to "Start It Up". What about IE 8 with "We are the Champions" or the Beatles "Got to Get You Into My Life".
Fire Crispin Porter now?
Fire Bradley Montgomery now?
Its time to improve the company image with proper advertising and marketing. Maybe the $9 billion on R&D should be spent on making a decent advertising commercial. The past commercials aren't even worth 9 cents.
To offer support through shares we can be contacted at newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
Will Microsoft Shares Ever Show Growth
For several years Microsoft shares have remained relatively stagnant. For approximately a decade the share price has displayed minimal variation. Refer to: http://moneycentral.msn.com/investor/charts/chartdl.aspx?Symbol=MSFT&CP=0&PT=10
This campaign has indicated on multiple occassions that several years ago at an annual shareholder meeting Mr. Ballmer stated "the shares have been stagnant but we have plans and the shares will take care of itself". Despite Mr. Ballmers confidence in the "shares taking care of itself" there still is minimal variation.
A article with CBS Marketwatch makes reference to the potential of Microsoft shares reaching a level of $35 per share. Refer to: http://www.marketwatch.com/story/how-microsoft-msft-makes-it-back-to-35
In this article the author states that Microsoft could become a growth stock based on two primary factors. First, the author states "would be a home run for its new search technology, Bing". Microsoft has committed approximately $100 million towards an advertising campaign to promote Bing. Research shows that its share has increased by approximately 3%. That is relatively impressive growth, however, Google doesn't need to feel threatened. Google commands over 60% while Microsoft controls 13% of the search market. Bing will have to convince numerous users to steal another 50% share away from Google. It is optimistic yet not very likely.
In a CBS Marketwatch article the author Therese Poletti refers to Bing creating competition. Refer to: http://www.marketwatch.com/story/microsoft-stirs-search-engine-pot-with-bing.
The author concludes the article stating " So the key question now among investors, as Lindsay notes, is "is Bing sustainable, or will Microsoft mess it up?"
This campaign can very simply answer the above question presented by Ms. Poletti. At the beginning of the article she references to a parody video created concerning Bing. Refer to:http://techblips.dailyradar.com/video/googling_with_bing/
According to the initial CBS Marketwatch article the second issue confronting Microsoft is "More important to Microsoft's success is a very successful launch of Windows 7, the replacement for Vista".
It is evident that Microsoft failed with its release of Vista. The Mojave Experiment failed to rejuvinate interest with Microsoft and its operating system. There are numerous reports indicating that competitors such as Apple are slowly eroding Microsoft's dominance.
Microsoft still controls over 80% of the market. However, with increased competition and an weakened economy will Win 7 bring success?
Several consumers and companies will likely remain with a current operating system as oppossed to upgrading. Additionally, this segment of Microsoft will not bring much growth. It might show modest growth, sustain growth or loss share. Regardless, this segment is not a huge growth sector for Microsoft.
This ultimately leads to the final question or comment posted by the author of the initial CBS article. The author states "It is possible that both the launch of Bing and Windows 7 will under-perform investor expectations. Microsoft shares could go back to below $15, where they traded in March, if that happens".
Bing might have created a buzz with a $100 million advertising campaign, but, it is probably not sustainable. Google is part of the culture. Bing might be the best product from Microsoft in a long time, however, its probably not good enough to dethrone Google as King of Search.
Win 7 might generate renewed licenses and consumers might upgrade, however, it will not be perceived as growth. However, if Microsoft remains with Crispin Porter as their advertising agents then Win 7 will fail to create excitement with the consumer.
The sad yet realistic prediction is most likely Microsoft will remain stagnant. Despite Mr. Ballmers "plans" and his belief "the shares will take care of itself" they will probably remain flat. Microsoft requires a "New Strategy" before it ever becomes a Growth Stock.
To offer support through shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
This campaign has indicated on multiple occassions that several years ago at an annual shareholder meeting Mr. Ballmer stated "the shares have been stagnant but we have plans and the shares will take care of itself". Despite Mr. Ballmers confidence in the "shares taking care of itself" there still is minimal variation.
A article with CBS Marketwatch makes reference to the potential of Microsoft shares reaching a level of $35 per share. Refer to: http://www.marketwatch.com/story/how-microsoft-msft-makes-it-back-to-35
In this article the author states that Microsoft could become a growth stock based on two primary factors. First, the author states "would be a home run for its new search technology, Bing". Microsoft has committed approximately $100 million towards an advertising campaign to promote Bing. Research shows that its share has increased by approximately 3%. That is relatively impressive growth, however, Google doesn't need to feel threatened. Google commands over 60% while Microsoft controls 13% of the search market. Bing will have to convince numerous users to steal another 50% share away from Google. It is optimistic yet not very likely.
In a CBS Marketwatch article the author Therese Poletti refers to Bing creating competition. Refer to: http://www.marketwatch.com/story/microsoft-stirs-search-engine-pot-with-bing.
The author concludes the article stating " So the key question now among investors, as Lindsay notes, is "is Bing sustainable, or will Microsoft mess it up?"
This campaign can very simply answer the above question presented by Ms. Poletti. At the beginning of the article she references to a parody video created concerning Bing. Refer to:http://techblips.dailyradar.com/video/googling_with_bing/
According to the initial CBS Marketwatch article the second issue confronting Microsoft is "More important to Microsoft's success is a very successful launch of Windows 7, the replacement for Vista".
It is evident that Microsoft failed with its release of Vista. The Mojave Experiment failed to rejuvinate interest with Microsoft and its operating system. There are numerous reports indicating that competitors such as Apple are slowly eroding Microsoft's dominance.
Microsoft still controls over 80% of the market. However, with increased competition and an weakened economy will Win 7 bring success?
Several consumers and companies will likely remain with a current operating system as oppossed to upgrading. Additionally, this segment of Microsoft will not bring much growth. It might show modest growth, sustain growth or loss share. Regardless, this segment is not a huge growth sector for Microsoft.
This ultimately leads to the final question or comment posted by the author of the initial CBS article. The author states "It is possible that both the launch of Bing and Windows 7 will under-perform investor expectations. Microsoft shares could go back to below $15, where they traded in March, if that happens".
Bing might have created a buzz with a $100 million advertising campaign, but, it is probably not sustainable. Google is part of the culture. Bing might be the best product from Microsoft in a long time, however, its probably not good enough to dethrone Google as King of Search.
Win 7 might generate renewed licenses and consumers might upgrade, however, it will not be perceived as growth. However, if Microsoft remains with Crispin Porter as their advertising agents then Win 7 will fail to create excitement with the consumer.
The sad yet realistic prediction is most likely Microsoft will remain stagnant. Despite Mr. Ballmers "plans" and his belief "the shares will take care of itself" they will probably remain flat. Microsoft requires a "New Strategy" before it ever becomes a Growth Stock.
To offer support through shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
Monday, June 22, 2009
No Accountability in The Boardroom
Activists typically target companies for various reasons. There is the natural underperforming company. Numerous companies have fallen within this realm and have subsequently become the target of a hedge fund or a shareholder activist.
Historically, activists have created pressure on companies to effect change. Sometimes the activist has controlled a majority interest within the company. However, occassionally the activist has controlled a minority interest. It is more difficult to lead an activist campaign through controlling a minority interest. It is more difficult but not imposssible. Ironfire Capital through owning less then 100 shares forced change at Yahoo.
Microsoft recently aanounced that a shareholder with 25% of the company shares can call a special meeting. Refer to: http://www.marketwatch.com/story/microsoft-declares-quarterly-dividend-board-of-directors-proposes-new-shareholder-right
The article makes reference to a comment by John Sethoof, the Deputy Counsel for Microsoft. In the article he states that "the ability for shareholders to call special meetings is important" and "proposing this new policy is our commitment to maintaining strong corporate governance practices".
No offense Mr. Sethoof, but, with the ability to sling crap like that comment you should consider a career in politics.
Lets briefly analyze these comments. The ability for shareholders to call a meeting is important. If it was truly important would the bar be set at 25% of the company?
This naturally leads to the next comment. Setting the New Policy or Standard at 25% of the shares is considered a commitment to maintaining strong corporate governance?
What this new policy is stating is simply this "Here at Microsoft we don't believe in accountability or TRUE Corporate Governance".
Currently, Mr Gates owns less then 25%. Mr. Ballmer owns less then 25%. According to information Mr. Gates owns 8% and Mr. Ballmer owns 4%. Refer to: http://www.startribune.com/science/47766497.html
The largest institutions such as Capital Research or Fidelity also own less then 25%. According to the above article the largest institutional investor only owns 4%. Therefore, it would require Barclays, Fidelity, Vanguard and numerous other shareholders to call a meeting.
Microsoft shares have displayed a modest increase in value. They are currently trading at approximately $23 per share. This gives Microsoft a market cap of approximately $200 billion. Therefore, what Microsoft is stating is "if as a shareholder you own $50 billion worth of shares then our strong commitment to corporate governance is important".
Now, even if Microsoft drops to former levels of the mid to high teens, the company would still have a market cap of atleast $100 billion. Subsequently, this strong and important commitment requires a shareholder to own atleast $25 billion worth of stock.
To quote Charles Elson of the University of Delaware "It would be impossible to hit that number and that's exactly why they picked it".
Regardless of the fact that Mr. Sethoof states "Its important to the company". Regardless of the fact that "its the company strong commitment to governance". Regardless of the fact that Mr. Sethoof states "its attainable". The reality is that 25% demonstrates that Microsoft set a standard that will never enable a shareholder to hold The SLT or the Board accountable for its decisions.
Once again this demonstrates Mr. Ballmers TRUE attitude towards shareholders. To set a standard at 5% would be realistic and attainable. A 5% stake in Microsoft would still constitute as one of the largest shareholders. Based on the 25% standard this means no mutual fund or hedge fund will ever have the capacity to utilize this "important and strong commitment to corporate governance".
We suggest that all shareholders vote against this provision and demand a more attainable number that would actually place accountability on Ballmer and The Board.
To offer shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
Historically, activists have created pressure on companies to effect change. Sometimes the activist has controlled a majority interest within the company. However, occassionally the activist has controlled a minority interest. It is more difficult to lead an activist campaign through controlling a minority interest. It is more difficult but not imposssible. Ironfire Capital through owning less then 100 shares forced change at Yahoo.
Microsoft recently aanounced that a shareholder with 25% of the company shares can call a special meeting. Refer to: http://www.marketwatch.com/story/microsoft-declares-quarterly-dividend-board-of-directors-proposes-new-shareholder-right
The article makes reference to a comment by John Sethoof, the Deputy Counsel for Microsoft. In the article he states that "the ability for shareholders to call special meetings is important" and "proposing this new policy is our commitment to maintaining strong corporate governance practices".
No offense Mr. Sethoof, but, with the ability to sling crap like that comment you should consider a career in politics.
Lets briefly analyze these comments. The ability for shareholders to call a meeting is important. If it was truly important would the bar be set at 25% of the company?
This naturally leads to the next comment. Setting the New Policy or Standard at 25% of the shares is considered a commitment to maintaining strong corporate governance?
What this new policy is stating is simply this "Here at Microsoft we don't believe in accountability or TRUE Corporate Governance".
Currently, Mr Gates owns less then 25%. Mr. Ballmer owns less then 25%. According to information Mr. Gates owns 8% and Mr. Ballmer owns 4%. Refer to: http://www.startribune.com/science/47766497.html
The largest institutions such as Capital Research or Fidelity also own less then 25%. According to the above article the largest institutional investor only owns 4%. Therefore, it would require Barclays, Fidelity, Vanguard and numerous other shareholders to call a meeting.
Microsoft shares have displayed a modest increase in value. They are currently trading at approximately $23 per share. This gives Microsoft a market cap of approximately $200 billion. Therefore, what Microsoft is stating is "if as a shareholder you own $50 billion worth of shares then our strong commitment to corporate governance is important".
Now, even if Microsoft drops to former levels of the mid to high teens, the company would still have a market cap of atleast $100 billion. Subsequently, this strong and important commitment requires a shareholder to own atleast $25 billion worth of stock.
To quote Charles Elson of the University of Delaware "It would be impossible to hit that number and that's exactly why they picked it".
Regardless of the fact that Mr. Sethoof states "Its important to the company". Regardless of the fact that "its the company strong commitment to governance". Regardless of the fact that Mr. Sethoof states "its attainable". The reality is that 25% demonstrates that Microsoft set a standard that will never enable a shareholder to hold The SLT or the Board accountable for its decisions.
Once again this demonstrates Mr. Ballmers TRUE attitude towards shareholders. To set a standard at 5% would be realistic and attainable. A 5% stake in Microsoft would still constitute as one of the largest shareholders. Based on the 25% standard this means no mutual fund or hedge fund will ever have the capacity to utilize this "important and strong commitment to corporate governance".
We suggest that all shareholders vote against this provision and demand a more attainable number that would actually place accountability on Ballmer and The Board.
To offer shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
Wednesday, June 10, 2009
Is Bing What Microsoft Was "Searching" For
Within the past there has been various shifts within the search sector. Consumers have seen the rise and fall of former tech darlings Netscape and AOL. There was a shift to when IE was a popular search engine. Yahoo experienced a period when it was the favorite. Currently, the word Google is synonymous with search. Now, on June 3, 2009 Microsoft has released Bing.
According to a recent article with All Things Digital it states that Microsoft has gained share. Based on data accumulated by comScore, Microsoft has gained approximately 2%. It has increased share from approximately 9% to 11%. Refer to: http://digitaldaily.allthingsd.com/20090610/if-you%e2%80%99re-not-worried-about-bing-why-are-you-talking-about-it-so-much/?reflink=ATD_mktw_quotes
However, the primary question is will Microsoft be able to continue to drive share growth?
To achieve the desired results Microsoft is confronted with two fundamental issues. First, the company is required to create attention and drive consumers towards the product. Microsoft has very deep pockets. Reports indicate that the company has committed $100 million to advertising. Refer to: http://www.marketingvox.com/mfst-shells-out-bucks-for-bing-ad-campaign-044159/
The company has deep pockets to advertise and gain consumer attention, however, will it be positive or negative attention?
Microsoft through previous campaigns have failed to capture consumers through positive advertising. Consider the Seinfeld and Gates ads. The I Am a PC ads. These campaigns were considered terrible ads. The Gates and Seinfeld ads were according to reports nominated for the worst campaign.
The current Bing commerials and campaign are of the same poor caliber as previous campaigns. They fail to create excitement and a desire to use Bing. Refer to:http://www.pcworld.com/article/166067/microsofts_bing_ad_claims_to_terminate_search_overload.html
The next dilemma confronting Microsoft is the ability to retain attention and consumer loyalty. Microsoft has the ability to advertise and gain attention. However, does it have the ability to retain consumers?
Microsoft has become known for creating poor products. Remember Vista and Zune?
The biggest dilemma confronting Microsoft is if Bing will have the consumer loyalty to surpass Google. It will have to be a superior product that will cause consumers to leave Google and use Bing. Considering Google has over 60% of the market, it can easily be determined that Microsoft and Bing have a tremendous amount of convincing to acheive before Google has to feel threatened.
Hopefully for Microsoft and its shareholders Bing will produce some good results.
Hopefully, Bing will produce the results Microsoft has been searching for now for several years. Bottom line is it is going to take perhaps much more then $100 million in advertising to convince consumers to switch from Google to Bing.
To offer support through shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
According to a recent article with All Things Digital it states that Microsoft has gained share. Based on data accumulated by comScore, Microsoft has gained approximately 2%. It has increased share from approximately 9% to 11%. Refer to: http://digitaldaily.allthingsd.com/20090610/if-you%e2%80%99re-not-worried-about-bing-why-are-you-talking-about-it-so-much/?reflink=ATD_mktw_quotes
However, the primary question is will Microsoft be able to continue to drive share growth?
To achieve the desired results Microsoft is confronted with two fundamental issues. First, the company is required to create attention and drive consumers towards the product. Microsoft has very deep pockets. Reports indicate that the company has committed $100 million to advertising. Refer to: http://www.marketingvox.com/mfst-shells-out-bucks-for-bing-ad-campaign-044159/
The company has deep pockets to advertise and gain consumer attention, however, will it be positive or negative attention?
Microsoft through previous campaigns have failed to capture consumers through positive advertising. Consider the Seinfeld and Gates ads. The I Am a PC ads. These campaigns were considered terrible ads. The Gates and Seinfeld ads were according to reports nominated for the worst campaign.
The current Bing commerials and campaign are of the same poor caliber as previous campaigns. They fail to create excitement and a desire to use Bing. Refer to:http://www.pcworld.com/article/166067/microsofts_bing_ad_claims_to_terminate_search_overload.html
The next dilemma confronting Microsoft is the ability to retain attention and consumer loyalty. Microsoft has the ability to advertise and gain attention. However, does it have the ability to retain consumers?
Microsoft has become known for creating poor products. Remember Vista and Zune?
The biggest dilemma confronting Microsoft is if Bing will have the consumer loyalty to surpass Google. It will have to be a superior product that will cause consumers to leave Google and use Bing. Considering Google has over 60% of the market, it can easily be determined that Microsoft and Bing have a tremendous amount of convincing to acheive before Google has to feel threatened.
Hopefully for Microsoft and its shareholders Bing will produce some good results.
Hopefully, Bing will produce the results Microsoft has been searching for now for several years. Bottom line is it is going to take perhaps much more then $100 million in advertising to convince consumers to switch from Google to Bing.
To offer support through shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
Friday, May 29, 2009
Will "Bing" Bring Success for Microsoft
It has been announced that on June 3rd Microsoft's new initiative at the search sector called "Bing" will be deployed globally. According to reports Microsoft is currently third within the search sector. Based on a Nielson rating, Microsoft commands approximately 9% of the search sector. However, Google and Yahoo control 64% and 16% respectively. Refer to: http://nielson.com/nielsonwire/online_mobile/top-10-search-providers-for-april-2009-us/
In 2008, Microsoft attempted a acquisition bid for Yahoo. Microsoft pursued a 65% premium bid for Yahoo valued at $45 billion. Hypothetically, if Yahoo had of accepted the bid, Microsoft would have deployed $45 billion and the combined entities would have 25% of the market compared to Google at 64%. Regardless of the failed bid, Microsoft is still required to pursue a strategy that will enable the company to compete with Google.
There are reports that Mr. Ballmer has resumed negotiations with Yahoo in regards to a potential search deal. Refer to: http://blogs.com/techtraderdaily/2009/04/10/report-yahoo-microsoft-in-talks-on-search-ad-deal/
Why is Mr. Ballmer in talks with Yahoo and at the same time releasing a new search engine?
According to Mr. Ballmer "Bing, is the first step in delivering innovation in search to enable consumers to find information quickly and make informed decisions". Refer to: http://www.cdrinfo.com/Sections/News/Details.aspx?NewsId=25414
The main dilemma with the above statement by Mr. Ballmer is the notion that it is the "first step in delivering innovation". Microsoft for several years has not been known for delivering innovation. It is a company that for several years has built a reputation on copying other innovative products but not to the same level of success. A not so popular "Zune" is a primary example of this hard reality facing Microsoft.
In an attempt to be optimistic, perhaps Microsoft has the capability to produce a truly innovative product. According to a report with CBS Marketwatch, the new search engine is designed to be a "decision making" product. Refer to: http://www.marketwatch.com/story/the-good-news-and-bad-news-on-bing
However, as pointed out in the above article, there is no reason why Google and Yahoo cannot produce a similar product. Therefore, does Microsoft have the capability to produce a truly innovative product that Google can not emulate?
Based on consumers response to Microsoft products in the past it is difficult to remain optimistic in regards to how consumers will respond. It has been mentioned on numerous occasions that Microsoft has a battered image. Therefore, with over 60% of the searches being conducted through Google, it is difficult to imagine consumers will migrate to a new Microsoft product.
In 2007, at an analyst meeting, Mr. Ballmer was confronted with a question concerning acquiring Yahoo. Mr. Ballmer indicated that Microsoft was "organic minded". Less than one year later Mr. Ballmer announces a bid for Yahoo.
In 2008, Mr. Ballmer pursues a 65% premium bid for Yahoo valued at $45 billion. This bid fails and Mr. Ballmer indicates that all negotiations with Yahoo are final.
In 2009, it is reported that Mr. Ballmer has entered negotiations with Yahoo in regards to a potential search deal.
In 2009, while in negotiations with Yahoo, Mr. Ballmer announces the release of a new search engine to compete with Google.
Perhaps the most important initiative for Microsoft would be to develop a platform that could enable the "decision making" ability of "Bing" be integrated into the SLT. It appears that the first step should be to develop a product that would enable Mr. Ballmer and the SLT to enter a query for how to compete with Google and then get the best answer. It seems evident that Mr. Ballmer is failing at finding information quickly and then making informed decisions.
It is without dispute that the most important search initiative for Microsoft is the "Search" for a New CEO.
To offer support through shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
In 2008, Microsoft attempted a acquisition bid for Yahoo. Microsoft pursued a 65% premium bid for Yahoo valued at $45 billion. Hypothetically, if Yahoo had of accepted the bid, Microsoft would have deployed $45 billion and the combined entities would have 25% of the market compared to Google at 64%. Regardless of the failed bid, Microsoft is still required to pursue a strategy that will enable the company to compete with Google.
There are reports that Mr. Ballmer has resumed negotiations with Yahoo in regards to a potential search deal. Refer to: http://blogs.com/techtraderdaily/2009/04/10/report-yahoo-microsoft-in-talks-on-search-ad-deal/
Why is Mr. Ballmer in talks with Yahoo and at the same time releasing a new search engine?
According to Mr. Ballmer "Bing, is the first step in delivering innovation in search to enable consumers to find information quickly and make informed decisions". Refer to: http://www.cdrinfo.com/Sections/News/Details.aspx?NewsId=25414
The main dilemma with the above statement by Mr. Ballmer is the notion that it is the "first step in delivering innovation". Microsoft for several years has not been known for delivering innovation. It is a company that for several years has built a reputation on copying other innovative products but not to the same level of success. A not so popular "Zune" is a primary example of this hard reality facing Microsoft.
In an attempt to be optimistic, perhaps Microsoft has the capability to produce a truly innovative product. According to a report with CBS Marketwatch, the new search engine is designed to be a "decision making" product. Refer to: http://www.marketwatch.com/story/the-good-news-and-bad-news-on-bing
However, as pointed out in the above article, there is no reason why Google and Yahoo cannot produce a similar product. Therefore, does Microsoft have the capability to produce a truly innovative product that Google can not emulate?
Based on consumers response to Microsoft products in the past it is difficult to remain optimistic in regards to how consumers will respond. It has been mentioned on numerous occasions that Microsoft has a battered image. Therefore, with over 60% of the searches being conducted through Google, it is difficult to imagine consumers will migrate to a new Microsoft product.
In 2007, at an analyst meeting, Mr. Ballmer was confronted with a question concerning acquiring Yahoo. Mr. Ballmer indicated that Microsoft was "organic minded". Less than one year later Mr. Ballmer announces a bid for Yahoo.
In 2008, Mr. Ballmer pursues a 65% premium bid for Yahoo valued at $45 billion. This bid fails and Mr. Ballmer indicates that all negotiations with Yahoo are final.
In 2009, it is reported that Mr. Ballmer has entered negotiations with Yahoo in regards to a potential search deal.
In 2009, while in negotiations with Yahoo, Mr. Ballmer announces the release of a new search engine to compete with Google.
Perhaps the most important initiative for Microsoft would be to develop a platform that could enable the "decision making" ability of "Bing" be integrated into the SLT. It appears that the first step should be to develop a product that would enable Mr. Ballmer and the SLT to enter a query for how to compete with Google and then get the best answer. It seems evident that Mr. Ballmer is failing at finding information quickly and then making informed decisions.
It is without dispute that the most important search initiative for Microsoft is the "Search" for a New CEO.
To offer support through shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
Friday, May 22, 2009
Microsoft's Sun is Setting
Throughout corporate history companies have come and gone. Once mighty titans of history eventually become yesterday's news. Over the ages there has been Rockefeller and Standard Oil. There has been Andrew Carnegie and U.S Steel. Included in this list is Sears Roebuck, Hudson Bay Company, IBM and General Motors. The question that arises is Microsoft going to join this list?
When this campaign was initiated it was indicated that numerous letters were forwarded to Mr. Ballmer. The letters indicated that the company had to adapt to the changing competitive environment and examine its business model.
Through the course of the campaign it has been indicated that OS is losing share. It has been stated that the company is required to evolve and create strategies that will alleviate the depletion or decrease of revenue from OS.
The campaign has referenced that Apple, SUN Microsoystems and other companies are creating a threat to Microsoft's coveted cash cows. The campaign has stated that the company has constantly protected the cash cows but neglected to insulate itself from emerging trends.
The campaign has indicated that there is a trend towards SaaS, handheld and the Internet. Microsoft is trailing within each of these sectors. The company has a battered image in regards to its coveted cash cow OS division. Through the Vista fiasco, the Apple ads and Microsoft's poor response, Microsoft has a battered image. Refer to http://www.networkworld.com/community/node/38350
This campaign has indicated for several months that Microsoft requires a "New Strategy". Over the past couple of months this strategy has evolved as current and former Microsoft employees provided additional insight and analysis.
Sadly, I feel myself compeled to say to Mr. Ballmer "Told You So".
There is a recent article with CBS Marketwatch. Refer to: http://www.marketwatch.com/story/tech-rally-may-find-solid-footing-with-windows-7
The article refers to Win 7 and its potential to save Microsoft. One interesting comment by the author is when he states " Microsoft has fumbled over and over again". There is no disputing this truth. Microsoft has fumbled on numerous occassions. Therefore, should one remain optimistic and believe that Win 7 and its release will prove different?
With the Crispin Porter generated ads Microsoft is failing to create a positive brand awareness and brand perception. Apple is considered cutting edge and subsequently this is refelected in the company stock price. Then there is Microsoft. Microsoft is required to create a excitement with the consumer. In a previous post this campaign referenced the Win 95 commercials. These commercials created excitement with the consumer. The recent campaign with Seinfeld, I am PC and Life without Walls are failing to create excitement with the consumer.
The next dilemma confronting Microsoft is its ability to deliver a desired product. Its track record for creating superior products has not been the company strength. It has rolled out products and left consumers frustrated and disappointed. Unless Win 7 offers compatibilty and superior user satisfaction all the advertising will not improve the company and enhance sales.
However, even if Microsoft is able to deliver a superior product with Win 7 it is still confronted with the original dilemma. It is still confronted with a business model that requires examination and modification.
There is a recent article with TechFlash. Refer to: http://www.techflash.com/microsoft/Can_Microsofts_business_adapt_to_the_new_economy_45846007.html
In the above article the author Mr. Todd Bishop makes reference to the facts this campaign has been arguing for several months. The article states that OS is no longer the dominant revenue generator for Microsoft. The article also references the various threats to the company business model.
Microsoft is threatened within the OS sector. It has increased competition and a depletion in market share. It is threatened with online services and handheld services. Microsoft is required to adopt a "New Strategy".
This campaign has compiled and revised information from actual Microsoft employees to create a "New Strategy" for Microsoft. The strategy focus is on insulating the company from a continued depletion of OS revenue. It focuses on increasing the company image. It addresses R&D spending and improving effeciency. The campaign also provides solutions to insulate the depletion in OS and position the company in emerging trends.
The campaign has through its "New Strategy" indicated that Microsoft is required to initiate a deal with Yahoo. This will increase its share in the online sector. It is also required to pursue an acquisition of handheld company RIM (Research In Motion). This will enable the company to become competitive in the handheld sector. An alliance with Verizon to create a Smartphone will prove to late and a failure. RIM already has brand awareness and a solid base.
It is without dispute that Microsoft is confronted with various threats to its previous business model. However, companies have to adapt to the constant changing competitive environment. If a company fails to adapt it becomes like General Motors. It becomes outpaced and a dinasour.
If Microsoft and primarily Mr. Ballmer, The Board and the SLT fail to adapt, analysts and the history books might as well add Microsoft to the list of "Has Beens". Mr. Ballmer is required to adopt a strategy that will enable the company to remain pertinent and competitive. Perhaps it requires a strategy that was revised by actual Microsoft employees.
In a previous post, this campaign created the analogy that Microsoft was the Titanic headed towards the iceberg and Mr. Ballmer is neglecting to listen to warnings and keeps stating "full speed ahead". Unless, Mr. Ballmer starts listening to analysts, EMPLOYEES, and reports, the company is going to sink and take many people down with it.
Unfortunately, in this case history will likely repeat itself. We are all aware of the fact that only the rich were saved as the mighty Titanic sank taking the lower class citizens into the deep. Sadly, Mr. Ballmer, Mr. Gates (who is selling millions of shares per quarter to invest in private investment firm Cascade), the SLT and the Board will save themselves with billions worth of shares and watch numerous others sink into the depths with the once mighty Microsoft.
How long will the shares have to remain in the stagnant mode and fail to create value before the SLT changes course?
To offer support through shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
When this campaign was initiated it was indicated that numerous letters were forwarded to Mr. Ballmer. The letters indicated that the company had to adapt to the changing competitive environment and examine its business model.
Through the course of the campaign it has been indicated that OS is losing share. It has been stated that the company is required to evolve and create strategies that will alleviate the depletion or decrease of revenue from OS.
The campaign has referenced that Apple, SUN Microsoystems and other companies are creating a threat to Microsoft's coveted cash cows. The campaign has stated that the company has constantly protected the cash cows but neglected to insulate itself from emerging trends.
The campaign has indicated that there is a trend towards SaaS, handheld and the Internet. Microsoft is trailing within each of these sectors. The company has a battered image in regards to its coveted cash cow OS division. Through the Vista fiasco, the Apple ads and Microsoft's poor response, Microsoft has a battered image. Refer to http://www.networkworld.com/community/node/38350
This campaign has indicated for several months that Microsoft requires a "New Strategy". Over the past couple of months this strategy has evolved as current and former Microsoft employees provided additional insight and analysis.
Sadly, I feel myself compeled to say to Mr. Ballmer "Told You So".
There is a recent article with CBS Marketwatch. Refer to: http://www.marketwatch.com/story/tech-rally-may-find-solid-footing-with-windows-7
The article refers to Win 7 and its potential to save Microsoft. One interesting comment by the author is when he states " Microsoft has fumbled over and over again". There is no disputing this truth. Microsoft has fumbled on numerous occassions. Therefore, should one remain optimistic and believe that Win 7 and its release will prove different?
With the Crispin Porter generated ads Microsoft is failing to create a positive brand awareness and brand perception. Apple is considered cutting edge and subsequently this is refelected in the company stock price. Then there is Microsoft. Microsoft is required to create a excitement with the consumer. In a previous post this campaign referenced the Win 95 commercials. These commercials created excitement with the consumer. The recent campaign with Seinfeld, I am PC and Life without Walls are failing to create excitement with the consumer.
The next dilemma confronting Microsoft is its ability to deliver a desired product. Its track record for creating superior products has not been the company strength. It has rolled out products and left consumers frustrated and disappointed. Unless Win 7 offers compatibilty and superior user satisfaction all the advertising will not improve the company and enhance sales.
However, even if Microsoft is able to deliver a superior product with Win 7 it is still confronted with the original dilemma. It is still confronted with a business model that requires examination and modification.
There is a recent article with TechFlash. Refer to: http://www.techflash.com/microsoft/Can_Microsofts_business_adapt_to_the_new_economy_45846007.html
In the above article the author Mr. Todd Bishop makes reference to the facts this campaign has been arguing for several months. The article states that OS is no longer the dominant revenue generator for Microsoft. The article also references the various threats to the company business model.
Microsoft is threatened within the OS sector. It has increased competition and a depletion in market share. It is threatened with online services and handheld services. Microsoft is required to adopt a "New Strategy".
This campaign has compiled and revised information from actual Microsoft employees to create a "New Strategy" for Microsoft. The strategy focus is on insulating the company from a continued depletion of OS revenue. It focuses on increasing the company image. It addresses R&D spending and improving effeciency. The campaign also provides solutions to insulate the depletion in OS and position the company in emerging trends.
The campaign has through its "New Strategy" indicated that Microsoft is required to initiate a deal with Yahoo. This will increase its share in the online sector. It is also required to pursue an acquisition of handheld company RIM (Research In Motion). This will enable the company to become competitive in the handheld sector. An alliance with Verizon to create a Smartphone will prove to late and a failure. RIM already has brand awareness and a solid base.
It is without dispute that Microsoft is confronted with various threats to its previous business model. However, companies have to adapt to the constant changing competitive environment. If a company fails to adapt it becomes like General Motors. It becomes outpaced and a dinasour.
If Microsoft and primarily Mr. Ballmer, The Board and the SLT fail to adapt, analysts and the history books might as well add Microsoft to the list of "Has Beens". Mr. Ballmer is required to adopt a strategy that will enable the company to remain pertinent and competitive. Perhaps it requires a strategy that was revised by actual Microsoft employees.
In a previous post, this campaign created the analogy that Microsoft was the Titanic headed towards the iceberg and Mr. Ballmer is neglecting to listen to warnings and keeps stating "full speed ahead". Unless, Mr. Ballmer starts listening to analysts, EMPLOYEES, and reports, the company is going to sink and take many people down with it.
Unfortunately, in this case history will likely repeat itself. We are all aware of the fact that only the rich were saved as the mighty Titanic sank taking the lower class citizens into the deep. Sadly, Mr. Ballmer, Mr. Gates (who is selling millions of shares per quarter to invest in private investment firm Cascade), the SLT and the Board will save themselves with billions worth of shares and watch numerous others sink into the depths with the once mighty Microsoft.
How long will the shares have to remain in the stagnant mode and fail to create value before the SLT changes course?
To offer support through shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
Wednesday, May 20, 2009
Will Ballmer End His "Search"
There are certain circumstances when a person will try to remain optimistic. For example, you are leaving on vacation and the weather report states it will rain. Naturally, it is normal to attempt to remain optimistic and believe that the forecast is not correct and it will prove to be good weather.
In the past few weeks there have been various reports and announcements concerning Microsoft and its search initiative. With the various reports it is difficult to remain optimistic in regards to Microsoft.
In April it was announced that Mr. Ballmer was resuming talks with Yahoo. It was reported that Mr. Ballmer was in discussion with Ms. Bartz in regards to a possible search and advertising deal. Refer to: http://online.wsj.com/article/SB123937960877408815.html
The above report initially created some optimism. There was a glimmer of light as the campaign hoped that Microsoft was pursuing what was suggested in the "New Strategy". There was optimism that talks concerning a search deal would lead to Microsoft gaining additional market share in this sector.
This campaign has on numerous ocassion expressed disgust in regards to the Yahoo bid. Mr. Ballmer pursued a 65% premium bid for Yahoo. This bid was valued at approximately $45 billion.
This failed bid was Mr. Ballmer's attempt to increase Microsoft's market share within this sector. This attempt by Mr. Ballmer should come as no surprise. A recent report indicates that Microsoft still trails both Google and Yahoo in the search sector. Refer to : http://digitaldaily.allthingsd.com/20090518/google-has-search-market-share-microsoft-not-so-much/?reflink=ATD_mktw_quotes
However, Mr. Ballmer's desire to increase market share and compete with Google creates concern. This leads to the next report.
Microsoft recently announced it was issuing bonds. Refer to: http://online.wsj.com/article/SB124205546206507039.html
What is perplexing is the notion that a company that has never had debt and has $25 billion in cash is seeking to issue debt. Is Mr. Ballmer issuing debt to pursue a major acquisition?
Is Mr. Ballmer planning on pursuing Yahoo again?
Microsoft recently announced it will be releasing a New Search Engine called "Kumo". Refer to: http://digitaldaily.allthingsd.com/20090519/microsoft-to-debut-new-search-at-d-all-things-digital/
The above article references that Microsoft is attempting to compete with Google that increased its market share. According to the report Microsoft has lost market share from a year ago.
What is causing the greatest difficulty to remain optimistic?
Microsoft several years ago eliminated Netscape from the landscape. Netscape was once the leading search engine. Microsoft through an initiative dominated the sector. However, it then gets eliminated by Yahoo then annihilated by Google.
Mr. Ballmer realising that Google is dominating this important sector attempts to acquire Yahoo. Again, a 65% premium bid valued at $45 billion.
Now there are reports that Mr. Ballmer is resuming talks with Ms Bartz concerning a deal with Yahoo. There is reports that Microsoft despite having $25 billion in cash issued debt for a potential acquisition. There is a report that Microsoft is realising 'Kumo" in an attempt to compete with Google.
Here is the reason its hard to be optimistic. Based on the numerous reports it appears that Mr. Ballmer is "searching" for anything that will compete with Google. This campaign has mentioned that in 2007 at an analyst meeting when confronted with potentially acquiring Yahoo that Mr. Ballmer stated "Microsoft is organic minded". However, less then one year later Mr. Ballmer attempted to acquire Yahoo. This change in direction and almost sporadic strategy displays that Mr. Ballmer has no "Real" vision in regards to competing with Google.
Resuming talks with Yahoo, issuing debt for a possible acquisition, and releasing a "New Search Engine" displays characterisitics that Mr. Ballmer is simply doing everything but eventually it will prove to be nothing.
Perhaps eventually a company will challenge Google and maybe even remove Google from the Throne as undisputed King of Search. However, based on Mr. Ballmer's past record of poor decisions and the conflicting reports and direction it appears evident it will not be Microsoft that takes the Throne.
It appears that the forecast for Microsoft will continue to prove cloudy.
To offer support through shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
In the past few weeks there have been various reports and announcements concerning Microsoft and its search initiative. With the various reports it is difficult to remain optimistic in regards to Microsoft.
In April it was announced that Mr. Ballmer was resuming talks with Yahoo. It was reported that Mr. Ballmer was in discussion with Ms. Bartz in regards to a possible search and advertising deal. Refer to: http://online.wsj.com/article/SB123937960877408815.html
The above report initially created some optimism. There was a glimmer of light as the campaign hoped that Microsoft was pursuing what was suggested in the "New Strategy". There was optimism that talks concerning a search deal would lead to Microsoft gaining additional market share in this sector.
This campaign has on numerous ocassion expressed disgust in regards to the Yahoo bid. Mr. Ballmer pursued a 65% premium bid for Yahoo. This bid was valued at approximately $45 billion.
This failed bid was Mr. Ballmer's attempt to increase Microsoft's market share within this sector. This attempt by Mr. Ballmer should come as no surprise. A recent report indicates that Microsoft still trails both Google and Yahoo in the search sector. Refer to : http://digitaldaily.allthingsd.com/20090518/google-has-search-market-share-microsoft-not-so-much/?reflink=ATD_mktw_quotes
However, Mr. Ballmer's desire to increase market share and compete with Google creates concern. This leads to the next report.
Microsoft recently announced it was issuing bonds. Refer to: http://online.wsj.com/article/SB124205546206507039.html
What is perplexing is the notion that a company that has never had debt and has $25 billion in cash is seeking to issue debt. Is Mr. Ballmer issuing debt to pursue a major acquisition?
Is Mr. Ballmer planning on pursuing Yahoo again?
Microsoft recently announced it will be releasing a New Search Engine called "Kumo". Refer to: http://digitaldaily.allthingsd.com/20090519/microsoft-to-debut-new-search-at-d-all-things-digital/
The above article references that Microsoft is attempting to compete with Google that increased its market share. According to the report Microsoft has lost market share from a year ago.
What is causing the greatest difficulty to remain optimistic?
Microsoft several years ago eliminated Netscape from the landscape. Netscape was once the leading search engine. Microsoft through an initiative dominated the sector. However, it then gets eliminated by Yahoo then annihilated by Google.
Mr. Ballmer realising that Google is dominating this important sector attempts to acquire Yahoo. Again, a 65% premium bid valued at $45 billion.
Now there are reports that Mr. Ballmer is resuming talks with Ms Bartz concerning a deal with Yahoo. There is reports that Microsoft despite having $25 billion in cash issued debt for a potential acquisition. There is a report that Microsoft is realising 'Kumo" in an attempt to compete with Google.
Here is the reason its hard to be optimistic. Based on the numerous reports it appears that Mr. Ballmer is "searching" for anything that will compete with Google. This campaign has mentioned that in 2007 at an analyst meeting when confronted with potentially acquiring Yahoo that Mr. Ballmer stated "Microsoft is organic minded". However, less then one year later Mr. Ballmer attempted to acquire Yahoo. This change in direction and almost sporadic strategy displays that Mr. Ballmer has no "Real" vision in regards to competing with Google.
Resuming talks with Yahoo, issuing debt for a possible acquisition, and releasing a "New Search Engine" displays characterisitics that Mr. Ballmer is simply doing everything but eventually it will prove to be nothing.
Perhaps eventually a company will challenge Google and maybe even remove Google from the Throne as undisputed King of Search. However, based on Mr. Ballmer's past record of poor decisions and the conflicting reports and direction it appears evident it will not be Microsoft that takes the Throne.
It appears that the forecast for Microsoft will continue to prove cloudy.
To offer support through shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
Monday, May 11, 2009
Microsoft Issues Debt
Mr. Ballmer and the SLT have pursued various strategies that have left investors, and analysts confused and perplexed. Microsoft recently announced its first issue of debt. Refer to
http://www.marketwatch.com/news/story/Microsoft-files-first-ever-bond/story.aspx?guid=%7B74CF8D7F%2D3683%2D40AF%2DB3F7%2DBF056078F740%7D
This leads to one very simple question. Why?
According to Microsoft the company said "it plans to use the proceeds from the sale of the notes for "general corporate purposes," which may include working capital, share buybacks and acquisitions".
Microsoft has according to the report $25 billion in cash and short-term investments. This is a tremendous amount of capital. The company also generates over $60 billion in revenue and approximately $25 billion in Operating Income.
Is the company really required to issue debt to fund share buybacks and acquisitions?
It has been indicated on numerous occassions that this campaign is oppossed to share buybacks. The company previously deployed $40 billion towards buybacks in an attempt to elevate the share price. It is historically evident that this initiative failed to elevate the share price and create value. Therefore, issuing debt to buyback shares will prove to be a poor decision.
A strategy to buyback shares demonstrates that the SLT has no real strategy on how to utilize capital to propel growth. It is more prudent to deploy capital towards acquisition growth. But, the company still has $25 billion in cash. Therefore, why issue debt?
This campaign has explained its contention with previous Microsoft acquisitions. It seems evident that the company has deployed billions on various acquisitions that fail to increase market share and revenue. Its Online Service Division is a prime example of wasted capital on acquisitions. Regardless, to increase market share in various sectors the company is required to pursue a drastic growth strategy.
Last year Microsoft attempted to acquire Yahoo for $45 billion. If the company has $25 billion in cash and is seeking to raise $3.7 billion, is Mr. Ballmer planning a major acquisition?
This campaign has indicated that its "New Strategy" for Microsoft incorporates the acquisition of RIM. The Microsoft employee that provided the analysis indicated that this would enable Microsoft to have presence with Danger and RIM. This would capture significant share in the youth segment and business segment of the handheld sector.
This campaign would not be oppossed to Microsoft issuing debt to pursue a game changing strategy. Issuing debt to not fully deplete the cash reserve and acquire RIM would prove a viable strategy for the company. It would postion Microsoft in a competitive position in the handheld sector.
However, what is perplexing is the intention of Mr. Ballmer, The Board and the SLT. Now that the talks have started with Ms. Bartz is Mr. Ballmer intending to pursue another attempt at Yahoo?
Will the issue of the debt prove beneficial for the long-term stability and growth of the company?
Will it be used to increase market share?
Will the issue of debt and its utilization enhance the stagnant share price?
Will it prove to be yet another nail in the coffin?
Let's hope that Mr. Ballmer and The Board will finally make some viable decisions that will benfit the direction of the company.
To offer support through shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
http://www.marketwatch.com/news/story/Microsoft-files-first-ever-bond/story.aspx?guid=%7B74CF8D7F%2D3683%2D40AF%2DB3F7%2DBF056078F740%7D
This leads to one very simple question. Why?
According to Microsoft the company said "it plans to use the proceeds from the sale of the notes for "general corporate purposes," which may include working capital, share buybacks and acquisitions".
Microsoft has according to the report $25 billion in cash and short-term investments. This is a tremendous amount of capital. The company also generates over $60 billion in revenue and approximately $25 billion in Operating Income.
Is the company really required to issue debt to fund share buybacks and acquisitions?
It has been indicated on numerous occassions that this campaign is oppossed to share buybacks. The company previously deployed $40 billion towards buybacks in an attempt to elevate the share price. It is historically evident that this initiative failed to elevate the share price and create value. Therefore, issuing debt to buyback shares will prove to be a poor decision.
A strategy to buyback shares demonstrates that the SLT has no real strategy on how to utilize capital to propel growth. It is more prudent to deploy capital towards acquisition growth. But, the company still has $25 billion in cash. Therefore, why issue debt?
This campaign has explained its contention with previous Microsoft acquisitions. It seems evident that the company has deployed billions on various acquisitions that fail to increase market share and revenue. Its Online Service Division is a prime example of wasted capital on acquisitions. Regardless, to increase market share in various sectors the company is required to pursue a drastic growth strategy.
Last year Microsoft attempted to acquire Yahoo for $45 billion. If the company has $25 billion in cash and is seeking to raise $3.7 billion, is Mr. Ballmer planning a major acquisition?
This campaign has indicated that its "New Strategy" for Microsoft incorporates the acquisition of RIM. The Microsoft employee that provided the analysis indicated that this would enable Microsoft to have presence with Danger and RIM. This would capture significant share in the youth segment and business segment of the handheld sector.
This campaign would not be oppossed to Microsoft issuing debt to pursue a game changing strategy. Issuing debt to not fully deplete the cash reserve and acquire RIM would prove a viable strategy for the company. It would postion Microsoft in a competitive position in the handheld sector.
However, what is perplexing is the intention of Mr. Ballmer, The Board and the SLT. Now that the talks have started with Ms. Bartz is Mr. Ballmer intending to pursue another attempt at Yahoo?
Will the issue of the debt prove beneficial for the long-term stability and growth of the company?
Will it be used to increase market share?
Will the issue of debt and its utilization enhance the stagnant share price?
Will it prove to be yet another nail in the coffin?
Let's hope that Mr. Ballmer and The Board will finally make some viable decisions that will benfit the direction of the company.
To offer support through shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
Sunday, May 10, 2009
A "Leading Company" Requires True Leaders
Since launching this campaign towards Microsoft numerous topics have been examined within this blog. Typically, a news topic concerning Microsoft will foster a post or comment. However, this post was created from different circumstances.
In the past year I have been fortunate to have the opportunity to attend Leadership Summits. Last year, I attended a Leadership Summit which included Colin Powell as a guest speaker.
Recently, I had the opportunity to attend Maximum Impact. Refer to http://www.giantimpact.com/aftertheevent
This event included numerous guest speakers. It included a founder of the fastest growing advertising agency in the United States. It included the President of Disney Parks. It included former British Prime Minister Tony Blair.
While sitting listening to the various leaders it caused simple reflection and analysis into required practices for a leader. It also caused reflection concerning Microsoft.
One of the guest speakers presented a topic called Play at Work. Also refer to http://www.creativityatwork.com/articlesContent/playwork.htm
The guest speaker had the opportunity to meet with an executive at Google. The executive discussed how Google has created a culture of "Purposeful Play". It was discussed how fostering this environment within the workplace can improve quality of work, retention and attract new talent.
In contrast is Microsoft. Although the article is dated 2005 it is still pertinent. Refer to: http://minimsft.blogspot.com/2005/10/middle-managers-bureaucracy-and-no.html
It is still pertinent primarly because a reader can still view the same type of comments on the Mini blog. After four years since this article, employees are still commenting on layers of middle management and bureaucracy. Refer to http://minimsft.blogspot.com/
Perhaps, this is why employees indicated within the "New Strategy" that "middle management" needs to be streamlined.
During the Maximum Impact seminars or speeches there were numerous other important comments. Al Weiss the President of Disney Parks referred to "Servant Leadership". The company Chi-Fil-A ,the sponsor of the event, commented on pursuing "customer satisfaction".
Continental Airlines discussed the importance of teamwork, dignity and respect and how they are held in the same regard as profitability. The company also recognised that it had to reward and celebrate success with everyone. It was stated that no group takes credit for success or blame for failure. Everyone is considered a team and integral to the overall success of the company.
All these comments caused analysis and comparison of Microsoft. Microsoft is far removed from "Servant Leadership". The mentality of Microsoft is focus on yourself and your career, your success and when you advance up the levels "help yourself". This is a stark contrast from "Servant Leadership". What about empowering your employees?
What about advancing up the ranks and creating an environment where your subordinates can excel and become their best at the job?
This mentality subsequently creates an environment where employees are empowered to succeed at their role.
There is the issue of making customer satisfaction "top priority". Ford Motor Company recognised this importance when they launched "Ford. Quality is Job One." Then there is Microsoft. Enough said.
Microsoft has various divisions and teams. This campaign obtained a letter from a former employee that indicated a monetary reward for accomplishing a goal. Comments on Mini demonstrate that Microsoft rewards teams or groups for success. This creates dissention and animosity within the company. Microsoft is required to adopt a culture where the entire company celebrates success. This will create a team environment as oppossed to isulating a group for failure or success.
Mr. Ballmer's comment regarding "Developers, Developers" creates division. Everyone, celebrates the success and everyone is considered important. This is the corporate culture that fosters productivity and success.
There is also the issue of ensuring that dignity, respect and teamwork are valued with the same regard as profitability. It appears evident that at Microsoft there is no real dignity and respect and the only focus is "Profits". The primary example of this mentality is the recent layoffs. A company with $21 billion in cash announces layoffs. The only reason was profits and appease Wall Street. Secondly, announcing layoffs then forcing people to wait. This totally lacks respect towards employees.
There is a very simple lesson that can be drawn from the various leadership speeches. The better you treat employees, the more efficient your company will be. The more effecient your company becomes, it equates to innovation, increased productivity, customer satisfaction and more profitable.
This left one final question. The Maximum Impact Conference was viewed by 50,000 leaders in numerous countries. Was anybody from the Microsoft SLT in attendance?
If you want to be a "Leading Company" you are required to have "True Leaders".
To offer support through shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
In the past year I have been fortunate to have the opportunity to attend Leadership Summits. Last year, I attended a Leadership Summit which included Colin Powell as a guest speaker.
Recently, I had the opportunity to attend Maximum Impact. Refer to http://www.giantimpact.com/aftertheevent
This event included numerous guest speakers. It included a founder of the fastest growing advertising agency in the United States. It included the President of Disney Parks. It included former British Prime Minister Tony Blair.
While sitting listening to the various leaders it caused simple reflection and analysis into required practices for a leader. It also caused reflection concerning Microsoft.
One of the guest speakers presented a topic called Play at Work. Also refer to http://www.creativityatwork.com/articlesContent/playwork.htm
The guest speaker had the opportunity to meet with an executive at Google. The executive discussed how Google has created a culture of "Purposeful Play". It was discussed how fostering this environment within the workplace can improve quality of work, retention and attract new talent.
In contrast is Microsoft. Although the article is dated 2005 it is still pertinent. Refer to: http://minimsft.blogspot.com/2005/10/middle-managers-bureaucracy-and-no.html
It is still pertinent primarly because a reader can still view the same type of comments on the Mini blog. After four years since this article, employees are still commenting on layers of middle management and bureaucracy. Refer to http://minimsft.blogspot.com/
Perhaps, this is why employees indicated within the "New Strategy" that "middle management" needs to be streamlined.
During the Maximum Impact seminars or speeches there were numerous other important comments. Al Weiss the President of Disney Parks referred to "Servant Leadership". The company Chi-Fil-A ,the sponsor of the event, commented on pursuing "customer satisfaction".
Continental Airlines discussed the importance of teamwork, dignity and respect and how they are held in the same regard as profitability. The company also recognised that it had to reward and celebrate success with everyone. It was stated that no group takes credit for success or blame for failure. Everyone is considered a team and integral to the overall success of the company.
All these comments caused analysis and comparison of Microsoft. Microsoft is far removed from "Servant Leadership". The mentality of Microsoft is focus on yourself and your career, your success and when you advance up the levels "help yourself". This is a stark contrast from "Servant Leadership". What about empowering your employees?
What about advancing up the ranks and creating an environment where your subordinates can excel and become their best at the job?
This mentality subsequently creates an environment where employees are empowered to succeed at their role.
There is the issue of making customer satisfaction "top priority". Ford Motor Company recognised this importance when they launched "Ford. Quality is Job One." Then there is Microsoft. Enough said.
Microsoft has various divisions and teams. This campaign obtained a letter from a former employee that indicated a monetary reward for accomplishing a goal. Comments on Mini demonstrate that Microsoft rewards teams or groups for success. This creates dissention and animosity within the company. Microsoft is required to adopt a culture where the entire company celebrates success. This will create a team environment as oppossed to isulating a group for failure or success.
Mr. Ballmer's comment regarding "Developers, Developers" creates division. Everyone, celebrates the success and everyone is considered important. This is the corporate culture that fosters productivity and success.
There is also the issue of ensuring that dignity, respect and teamwork are valued with the same regard as profitability. It appears evident that at Microsoft there is no real dignity and respect and the only focus is "Profits". The primary example of this mentality is the recent layoffs. A company with $21 billion in cash announces layoffs. The only reason was profits and appease Wall Street. Secondly, announcing layoffs then forcing people to wait. This totally lacks respect towards employees.
There is a very simple lesson that can be drawn from the various leadership speeches. The better you treat employees, the more efficient your company will be. The more effecient your company becomes, it equates to innovation, increased productivity, customer satisfaction and more profitable.
This left one final question. The Maximum Impact Conference was viewed by 50,000 leaders in numerous countries. Was anybody from the Microsoft SLT in attendance?
If you want to be a "Leading Company" you are required to have "True Leaders".
To offer support through shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
Thursday, May 7, 2009
Ballmer is "Really Bad"
There are numerous reports and comments concerning the credibility of Mr. Ballmer as CEO of Microsoft. In our last post we referenced a poll by Glassdoor and CNBC. Refer to http://www.glassdoor.com/blog/2009/01/cnbc-reports-on-ceo-ratings-the-future-of-glassdoor-and-whos-getting-a-bonus/
A simple review of the comments at Mini Microsoft would also quickly demonstrate the perception towards Mr. Ballmer as CEO. Refer to http://minimsft.blogspot.com/
Recently, Mr. Ballmer conducted a speech for students at Stanford University. A article with CBS Marketwatch called "Microsoft's Ballmer says economy is really bad" outlines this speech. Refer to http://www.marketwatch.com/news/story/microsofts-ballmer-says-economy-really/story.aspx?guid=%7BB93A5CA6%2D5F70%2D4D64%2D9459%2D132B37F41710%7D&dist=TQP_Mod_mktwN
The first problem with this situation is the university selection for a speaker. The speech is titled "Innovation & Entrepreneurship: Opportunities in Difficult Times" and they select Mr. Ballmer. Could the university not find a "Real Entrepeneur" to conduct the speech?
They select Mr. Ballmer. The only reason he is the CEO of the largest tech company is his friendship with the entrepeneur that founded Microsoft. Come on Stanford, if your providing a presentation on a topic perhaps try to get an expert on the topic. If Bill G is not available alteast get someone that has expereince in starting a company. Mr. Ballmer is better suited to conduct a speech concerning "How to Destroy the Start-Up Your Friend Has Founded".
It is ironic that Mr. Ballmer is presenting a speech on "Innovation and Opportunities in Difficult Times". Since Mr. Ballmer has failed to inject Microsoft with innovation it has lead the company to "difficult times".
In the CBS article is the reference to Mr. Ballmer indicating that the economy presents the opportunity to make better products. What products is he referring to?
Mr. Ballmer certainly cannot be referring to Microsoft products. Make the Zune better? Make MSN better? Make Longhorn...Vista (Win 7...8..9) better. Make a Smart Phone with Verizon better?
Mr. Ballmer then has the audacity to state " Microsoft's lower profile in the Internet search market gave it certain advantages. "The No. 1 player is a lot bigger than us in search," he said. "We're more like a start-up than a big guy in search."
Lets get serious. This is a statement from a CEO that has been obsessed with competing with Google. This is a CEO that has pursued billions of dollars worth of acquisitions in this sector. He is the same CEO that pursued a 65% premium bid for a floundering Yahoo to compete with Google. Then Mr. Ballmer has the nerve to state it provides "certain advantages".
Reality check Mr. Ballmer. Microsoft fails to resemble a start-up. Microsoft was engaged in Online Services long before the Start-Up Google. The only area that your statement is correct is this once obscure Start-Up called Google has become Number One.
Mr. Ballmer states " that gave the company the chance to try things that a market leader, like Google Inc. , might not be able to do". Please provide clarity Mr. Ballmer. It gave Microsoft opportunity to try what?
Blow through billions of dollars on acquisitions and R&D and fail to elevate the market share?
Google as a leader has introduced new services. It has expanded markets. It has gained more market share. It has increased revenue and earnings. Perhaps this is why the company is Number One.
If Microsoft Online Services was a start-up it would have gone bankrupt years ago. Its only survival is the cash generated by the OS division initially created by the Entrepeneur Mr. Gates.
If Microsoft Online was truly a start-up it should have experienced the fate of most start-ups and been acquired by a larger competitor, such as Google.
Mr. Ballmer then states that Microsoft will invest $9 billion on R&D. So, this $9 billion investment will be spent on improving existing products and making them better?
It will be spent to follow the "New Strategy" that was created by this campaign and revised by Microsoft employees?
Mr. Ballmer will spend capital to make Win 7 better. Mr. Ballmer will deploy capital to make Online Services better. But, lets not forget that Online is like a start-up with advantages and therefore can pursue things that Google cannot. Such as a deal with Yahoo to become more competitive in the Online sector.
It seems evident that its not the economy that is bad. Despite the poor economy, competitors have posted positive earnings. Mr. Ballmer failed to recognise the importance of Online and is busy trying to rectify this dilemma. However, Mr. Ballmer tries to down play the magnitude of this blunder and state that its better for the company.
Mr. Ballmer failed to recognise the importance of handheld and netbooks. Subsequently, this had a dramatic effect on the company revenue and earnings. The company is equally dependent on OS for revenue and subsequently the company experienced a double digit decline. Refer to http://money.cnn.com/2009/04/23/technology/microsoft_earnings/index.htm?postversion=2009042316
We will state "Mr. Ballmer we told you so".
When this campaign was launched the main argument for the necessity for a "New Strategy" was to insulate the company from a decline in OS revenue. It was stated there is a trend in SaaS, netbooks, and mobile. It was stated that OS was losing share.
It can be concluded that the only thing that is truly "really bad" is Mr. Ballmer as CEO of Microsoft. We have two suggestions for Mr. Ballmer. First suggestion to Mr. Ballmer. Leave Microsoft and become a public speaker. You can provide insight into how to destroy employee morale through layoffs and poor management. How to miss opportunities and blame other external factors. How to destory billions in shareholder value.
Second suggestion to Mr. Ballmer. Just leave Microsoft. Leave before you lead Microsoft from being "bad" to "really bad".
To offer support through shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
A simple review of the comments at Mini Microsoft would also quickly demonstrate the perception towards Mr. Ballmer as CEO. Refer to http://minimsft.blogspot.com/
Recently, Mr. Ballmer conducted a speech for students at Stanford University. A article with CBS Marketwatch called "Microsoft's Ballmer says economy is really bad" outlines this speech. Refer to http://www.marketwatch.com/news/story/microsofts-ballmer-says-economy-really/story.aspx?guid=%7BB93A5CA6%2D5F70%2D4D64%2D9459%2D132B37F41710%7D&dist=TQP_Mod_mktwN
The first problem with this situation is the university selection for a speaker. The speech is titled "Innovation & Entrepreneurship: Opportunities in Difficult Times" and they select Mr. Ballmer. Could the university not find a "Real Entrepeneur" to conduct the speech?
They select Mr. Ballmer. The only reason he is the CEO of the largest tech company is his friendship with the entrepeneur that founded Microsoft. Come on Stanford, if your providing a presentation on a topic perhaps try to get an expert on the topic. If Bill G is not available alteast get someone that has expereince in starting a company. Mr. Ballmer is better suited to conduct a speech concerning "How to Destroy the Start-Up Your Friend Has Founded".
It is ironic that Mr. Ballmer is presenting a speech on "Innovation and Opportunities in Difficult Times". Since Mr. Ballmer has failed to inject Microsoft with innovation it has lead the company to "difficult times".
In the CBS article is the reference to Mr. Ballmer indicating that the economy presents the opportunity to make better products. What products is he referring to?
Mr. Ballmer certainly cannot be referring to Microsoft products. Make the Zune better? Make MSN better? Make Longhorn...Vista (Win 7...8..9) better. Make a Smart Phone with Verizon better?
Mr. Ballmer then has the audacity to state " Microsoft's lower profile in the Internet search market gave it certain advantages. "The No. 1 player is a lot bigger than us in search," he said. "We're more like a start-up than a big guy in search."
Lets get serious. This is a statement from a CEO that has been obsessed with competing with Google. This is a CEO that has pursued billions of dollars worth of acquisitions in this sector. He is the same CEO that pursued a 65% premium bid for a floundering Yahoo to compete with Google. Then Mr. Ballmer has the nerve to state it provides "certain advantages".
Reality check Mr. Ballmer. Microsoft fails to resemble a start-up. Microsoft was engaged in Online Services long before the Start-Up Google. The only area that your statement is correct is this once obscure Start-Up called Google has become Number One.
Mr. Ballmer states " that gave the company the chance to try things that a market leader, like Google Inc. , might not be able to do". Please provide clarity Mr. Ballmer. It gave Microsoft opportunity to try what?
Blow through billions of dollars on acquisitions and R&D and fail to elevate the market share?
Google as a leader has introduced new services. It has expanded markets. It has gained more market share. It has increased revenue and earnings. Perhaps this is why the company is Number One.
If Microsoft Online Services was a start-up it would have gone bankrupt years ago. Its only survival is the cash generated by the OS division initially created by the Entrepeneur Mr. Gates.
If Microsoft Online was truly a start-up it should have experienced the fate of most start-ups and been acquired by a larger competitor, such as Google.
Mr. Ballmer then states that Microsoft will invest $9 billion on R&D. So, this $9 billion investment will be spent on improving existing products and making them better?
It will be spent to follow the "New Strategy" that was created by this campaign and revised by Microsoft employees?
Mr. Ballmer will spend capital to make Win 7 better. Mr. Ballmer will deploy capital to make Online Services better. But, lets not forget that Online is like a start-up with advantages and therefore can pursue things that Google cannot. Such as a deal with Yahoo to become more competitive in the Online sector.
It seems evident that its not the economy that is bad. Despite the poor economy, competitors have posted positive earnings. Mr. Ballmer failed to recognise the importance of Online and is busy trying to rectify this dilemma. However, Mr. Ballmer tries to down play the magnitude of this blunder and state that its better for the company.
Mr. Ballmer failed to recognise the importance of handheld and netbooks. Subsequently, this had a dramatic effect on the company revenue and earnings. The company is equally dependent on OS for revenue and subsequently the company experienced a double digit decline. Refer to http://money.cnn.com/2009/04/23/technology/microsoft_earnings/index.htm?postversion=2009042316
We will state "Mr. Ballmer we told you so".
When this campaign was launched the main argument for the necessity for a "New Strategy" was to insulate the company from a decline in OS revenue. It was stated there is a trend in SaaS, netbooks, and mobile. It was stated that OS was losing share.
It can be concluded that the only thing that is truly "really bad" is Mr. Ballmer as CEO of Microsoft. We have two suggestions for Mr. Ballmer. First suggestion to Mr. Ballmer. Leave Microsoft and become a public speaker. You can provide insight into how to destroy employee morale through layoffs and poor management. How to miss opportunities and blame other external factors. How to destory billions in shareholder value.
Second suggestion to Mr. Ballmer. Just leave Microsoft. Leave before you lead Microsoft from being "bad" to "really bad".
To offer support through shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
Wednesday, May 6, 2009
Resignation Instead of Layoffs
In January of this year Mr. Ballmer announced that the company was going to initiate a process of laying off 5,000 employees. This was announced by Mr. Ballmer in an attempt to please Wall Street. Recently Mr. Ballmer announced Phase 2 of the layoffs. Refer to: http://blog.seattletimes.nwsource.com/techtracks/2009/05/05/more_layoffs_at_microsoft_today_says_company_e-mai.html
Naturally, there are numerous sites that indicate the announcement. However, we choose Seattle since it is close to the Hallowed Gates to Microsoft.
Let's summarize.
During Mr. Ballmer's tenure as CEO he pursues billions in acquisitions. Despite this massive spending the company is equally reliant on its cash cows for revenue as it was a decade ago. The primary revenue is derived from OS and Server and Tools.
The acquisitions could also include the failed attempt to acquire Yahoo. It has been mentioned numerous times on this blog that it was a 65% premium bid valued at $45 billion. An analyst with Goldman Sachs stated it was the stupidest move in the company history. However, since the company Online Division had only 8% of the market it was necessary that Mr. Ballmer try to improve his previous failure in this division. The acquisition demonstrates that Mr. Ballmer was to late to gain dominance in this important sector.
The company has deployed billions towards R&D. Despite this massive spending the company has created the Zune, Microsoft Mobile and Vista. According to Mr. Ballmer the Zune was going to destroy Apple. Does anyone other than Mr. Ballmer even remember the Zune?
The success of Microsoft Mobile it evident with the recent announcement that Verizon and Microsoft are going to build a Smart phone. Once again, it will probably prove to be to late to gain any significant market share. Is Mr. Ballmer so dilussional that he believes that a Microsoft Smartphone at this stage in time will compete with iphone or Blackberry?
Suggestion to Mr. Ballmer. If you want a opportunity to compete with Apple and RIM, we suggest that you acquire the later.
There is also the reception of consumers with Vista. The company is losing share in OS and Mr. Ballmer has failed to insulate the company from its dependance on OS. This reality is demonstrated with the company recent earnings release.
Mr. Ballmer deployed $40 billion towards share buybacks. Despite deploying $40 billion the company shares remained flat and stagnant.
Mr. Ballmer has blamed numerous circumstances for the company perfomance and the stagnant share price. Reports indicate that the only real blame for the company performance and stagnant share price is Mr. Ballmer.
Mr. Ballmer has destroyed the company. Mr. Ballmer is leading the company towards a precipice. In a poll with GlassDoor and CNBC, Mr. Ballmer is voted one of the worst CEO's in the technology sector. Refer to http://www.glassdoor.com/blog/2009/01/cnbc-reports-on-ceo-ratings-the-future-of-glassdoor-and-whos-getting-a-bonus/
It could be argued that the company has experienced growth in revenue and earnings. This shouldn't be counted as a tremendous accomplishment based on emerging markets and controlling 80% of the OS market.
The company is losing share in OS, it's trailing in Online, its trailing in mobile. Mr. Ballmer has not only destroyed the company from a financial perspective but also the company image. With the release of Vista and Zune the company has a battered image. This is demonstrated by the Apple advertisements.
More importantely Mr. Ballmer has destroyed the company morale. For a view of company morale refer to Mini Microsoft at http://minimsft.blogspot.com/
If Mr. Ballmer truly wants to please Wall Street, analysts, employees and shareholders..instead of layoffs he should announce his resignation. The biggest favor Mr. Ballmer can do for the morale of the company and future of the company is resign.
To offer support in shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
Naturally, there are numerous sites that indicate the announcement. However, we choose Seattle since it is close to the Hallowed Gates to Microsoft.
Let's summarize.
During Mr. Ballmer's tenure as CEO he pursues billions in acquisitions. Despite this massive spending the company is equally reliant on its cash cows for revenue as it was a decade ago. The primary revenue is derived from OS and Server and Tools.
The acquisitions could also include the failed attempt to acquire Yahoo. It has been mentioned numerous times on this blog that it was a 65% premium bid valued at $45 billion. An analyst with Goldman Sachs stated it was the stupidest move in the company history. However, since the company Online Division had only 8% of the market it was necessary that Mr. Ballmer try to improve his previous failure in this division. The acquisition demonstrates that Mr. Ballmer was to late to gain dominance in this important sector.
The company has deployed billions towards R&D. Despite this massive spending the company has created the Zune, Microsoft Mobile and Vista. According to Mr. Ballmer the Zune was going to destroy Apple. Does anyone other than Mr. Ballmer even remember the Zune?
The success of Microsoft Mobile it evident with the recent announcement that Verizon and Microsoft are going to build a Smart phone. Once again, it will probably prove to be to late to gain any significant market share. Is Mr. Ballmer so dilussional that he believes that a Microsoft Smartphone at this stage in time will compete with iphone or Blackberry?
Suggestion to Mr. Ballmer. If you want a opportunity to compete with Apple and RIM, we suggest that you acquire the later.
There is also the reception of consumers with Vista. The company is losing share in OS and Mr. Ballmer has failed to insulate the company from its dependance on OS. This reality is demonstrated with the company recent earnings release.
Mr. Ballmer deployed $40 billion towards share buybacks. Despite deploying $40 billion the company shares remained flat and stagnant.
Mr. Ballmer has blamed numerous circumstances for the company perfomance and the stagnant share price. Reports indicate that the only real blame for the company performance and stagnant share price is Mr. Ballmer.
Mr. Ballmer has destroyed the company. Mr. Ballmer is leading the company towards a precipice. In a poll with GlassDoor and CNBC, Mr. Ballmer is voted one of the worst CEO's in the technology sector. Refer to http://www.glassdoor.com/blog/2009/01/cnbc-reports-on-ceo-ratings-the-future-of-glassdoor-and-whos-getting-a-bonus/
It could be argued that the company has experienced growth in revenue and earnings. This shouldn't be counted as a tremendous accomplishment based on emerging markets and controlling 80% of the OS market.
The company is losing share in OS, it's trailing in Online, its trailing in mobile. Mr. Ballmer has not only destroyed the company from a financial perspective but also the company image. With the release of Vista and Zune the company has a battered image. This is demonstrated by the Apple advertisements.
More importantely Mr. Ballmer has destroyed the company morale. For a view of company morale refer to Mini Microsoft at http://minimsft.blogspot.com/
If Mr. Ballmer truly wants to please Wall Street, analysts, employees and shareholders..instead of layoffs he should announce his resignation. The biggest favor Mr. Ballmer can do for the morale of the company and future of the company is resign.
To offer support in shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
Friday, May 1, 2009
Will the Smartphone Alliance Prove to be SMART
When this campaign was launched in mid-December 2008, it was indicated that Microsoft was required to pursue a game changing strategy within the mobile sector. It was stated that the alliances Microsoft was creating would fail to create the necessary revenue and market share. This was confirmed by a Citi analyst that Microsoft would probably not break even with its Verizon alliance. Refer to http://www.networkworld.com/community/node/38350
Initially, the campaign was seeking Microsoft to acquire Sprint. The logic was that Sprint had a fairly solid subscriber base that would provide Microsoft with a foundation for guaranteed revenue. Refer to http://www.networkworld.com/community/node/37991
The campaign indicated that it was seeking feedback and insight from Microsoft employees. Subsequently, an employee provided analysis of the benefits of Microsoft acquiring Research In Motion. The campaign adopted the strategy of Microsoft acquiring RIM based on this insightful analysis and argument.
Recently, Microsoft has announced an alliance with Verizon to create a Smartphone. Refer to http://www.marketwatch.com/news/story/Microsoft-Verizon-reportedly-making-smartphone/story.aspx?guid=%7B848ADF8A-444D-4A2F-BC73-78F9F4C9CB8B%7D
This leaves the campaign pondering one major question. Can Mr. Ballmer actually develop a Smartphone that would rival iPhone?
During Mr. Ballmer's tenure as CEO of Microsoft the company has spent billions on its Online Services. The company has deployed billions on R&D. Additionally, the company has deployed billions on acquisitions that according to Mr. Ballmer will make its online division more competitive. Despite this massive spending the company has failed to gain any market share. In 2005 the company controlled approximately 7%. Currently, the company controls approximately 8%. Refer to http://www.pcworld.com/article/161222/report_microsoft_us_search_share_hits_12month_low.html?tk=rss_news
We could also mention the attempt to capture Online share through the proposed 65% premium bid for Yahoo. We could mention it was valued at $45 billion. It could also be mentioned that an analyst with Goldman Sachs stated it was the stupidest move in the company history.
Mr. Ballmer announced the release of Zune. During the launch campaign Mr. Ballmer stated it was going to directly threaten Apple. The following spoof infommercial summarizes Mr. Ballmer's success. Refer to: http://www.iphonebuzz.com/zune-phone-infomercial-presented-by-steve-ballmer-27476.php
Through Mr. Ballmer's tenure there was also the failure of Vista. The company deployed billions. This resulted in failure. Mr. Ballmer's solution is simple. We will create a campaign called Mojave Experiment. If we cannot actually sell you our OS then hopefully we can trick you. This leads to Win 7 (Vista 2). Numerous reports are stating its only a updated version of Vista.
A recent interview with Mr. Ballmer by the editor-in-chief of McGraw Hill summarizes Mr. Ballmer's success or lack of. Refer to http://www.cbsnews.com/stories/2009/03/19/paidcontent/main4875846.shtml
This brings us back to the original question. Can Mr. Ballmer actually develop a Smartphone that will rival the iPhone?
Perhaps the following link will best demonstrate the probably of Mr. Ballmer threatening Apple. Refer to http://fakesteveballmer.blogspot.com/2009/01/invasion-that-wasnt.html
This campaigns prediction is simple. With Mr. Ballmer's previous record, the potential of threatening Apple will prove to be "THE INVASION THAT WASN'T"
But, what do we know?
We are not as smart as Mr. Ballmer. We could never conduct an analysis of the company, compile information from employees and create a viable "Strategy" for the company. Besides, Mr. Ballmer is the best candidate for CEO (sorry, best friend of the founder).
With Mr. Ballmer at the helm of Microsoft the company will likely continue with its outdated reactive approach. It will continue to try to copy competitors. It will continue to deploy capital and fail to gain market share, consumer loyalty.
It is time to rally support for change. This campaign has created a "New Strategy" for Microsoft. A strategy that will enable the company to gain focus and become competitive. It is time to START the REAL INVASION.
To rally support through shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
Initially, the campaign was seeking Microsoft to acquire Sprint. The logic was that Sprint had a fairly solid subscriber base that would provide Microsoft with a foundation for guaranteed revenue. Refer to http://www.networkworld.com/community/node/37991
The campaign indicated that it was seeking feedback and insight from Microsoft employees. Subsequently, an employee provided analysis of the benefits of Microsoft acquiring Research In Motion. The campaign adopted the strategy of Microsoft acquiring RIM based on this insightful analysis and argument.
Recently, Microsoft has announced an alliance with Verizon to create a Smartphone. Refer to http://www.marketwatch.com/news/story/Microsoft-Verizon-reportedly-making-smartphone/story.aspx?guid=%7B848ADF8A-444D-4A2F-BC73-78F9F4C9CB8B%7D
This leaves the campaign pondering one major question. Can Mr. Ballmer actually develop a Smartphone that would rival iPhone?
During Mr. Ballmer's tenure as CEO of Microsoft the company has spent billions on its Online Services. The company has deployed billions on R&D. Additionally, the company has deployed billions on acquisitions that according to Mr. Ballmer will make its online division more competitive. Despite this massive spending the company has failed to gain any market share. In 2005 the company controlled approximately 7%. Currently, the company controls approximately 8%. Refer to http://www.pcworld.com/article/161222/report_microsoft_us_search_share_hits_12month_low.html?tk=rss_news
We could also mention the attempt to capture Online share through the proposed 65% premium bid for Yahoo. We could mention it was valued at $45 billion. It could also be mentioned that an analyst with Goldman Sachs stated it was the stupidest move in the company history.
Mr. Ballmer announced the release of Zune. During the launch campaign Mr. Ballmer stated it was going to directly threaten Apple. The following spoof infommercial summarizes Mr. Ballmer's success. Refer to: http://www.iphonebuzz.com/zune-phone-infomercial-presented-by-steve-ballmer-27476.php
Through Mr. Ballmer's tenure there was also the failure of Vista. The company deployed billions. This resulted in failure. Mr. Ballmer's solution is simple. We will create a campaign called Mojave Experiment. If we cannot actually sell you our OS then hopefully we can trick you. This leads to Win 7 (Vista 2). Numerous reports are stating its only a updated version of Vista.
A recent interview with Mr. Ballmer by the editor-in-chief of McGraw Hill summarizes Mr. Ballmer's success or lack of. Refer to http://www.cbsnews.com/stories/2009/03/19/paidcontent/main4875846.shtml
This brings us back to the original question. Can Mr. Ballmer actually develop a Smartphone that will rival the iPhone?
Perhaps the following link will best demonstrate the probably of Mr. Ballmer threatening Apple. Refer to http://fakesteveballmer.blogspot.com/2009/01/invasion-that-wasnt.html
This campaigns prediction is simple. With Mr. Ballmer's previous record, the potential of threatening Apple will prove to be "THE INVASION THAT WASN'T"
But, what do we know?
We are not as smart as Mr. Ballmer. We could never conduct an analysis of the company, compile information from employees and create a viable "Strategy" for the company. Besides, Mr. Ballmer is the best candidate for CEO (sorry, best friend of the founder).
With Mr. Ballmer at the helm of Microsoft the company will likely continue with its outdated reactive approach. It will continue to try to copy competitors. It will continue to deploy capital and fail to gain market share, consumer loyalty.
It is time to rally support for change. This campaign has created a "New Strategy" for Microsoft. A strategy that will enable the company to gain focus and become competitive. It is time to START the REAL INVASION.
To rally support through shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
Monday, April 27, 2009
Earnings Release " A WAKEUP CALL"
In mid-December 2008 this campaign for a "New Strategy" was launched. It was indicated that Microsoft desperately required a "New Strategy". In the initial posts it was indicated that the trend was moving towards SaaS, handheld, cloud computing and netbooks. It was stated that Microsoft was to focused on the cash cows and had to re-examine its business model.
This campaign stated that within the OS market, Microsoft was losing share to competitors. It was stated a "New Strategy" was necessary to offset the potential depletion of revenue from the company cash cows. It was this campaign's contention that Microsoft was required to allocate capital towards initiatives that would supplement a potential decrease in revenue.
Microsoft has released its quarterly results. Refer to: http://money.cnn.com/2009/04/23/technology/microsoft_earnings/index.htm?postversion=2009042316
At this time it might be appropriate to say to Mr. Ballmer "told you so".
According to the release, net income for the company has declined a staggering 32%. This is a significant number.
A large portion of this decline can be attributed to the increased trend with netbooks. This trend caused tremendous impact on the company. The Client division experienced a 16% decline in revenue. The division revenue declined from $4.03 billion to $3.4 billion. Perhaps the most telling with this loss is referenced by Joe Wilcox at Microsoft Watch. Mr. Wilcox states:
"More than 80 percent of Windows revenue comes from OEM sales. Windows licenses then are more transactional. By comparison, about 65 percent of Server and Tools revenue comes from annuity licensing contracts. The difference is important. Annuity customers pay up front, on annual basis, under two- or three-year contracts. These commitments help insulate Microsoft earnings against the highs and lows of the economy or product release cycles. The protection is great for Server and Tools, not so good for Client. Economic conditions demonstrate how dramatic is the difference between transactional and annuity licensing sales".
Refer to: http://www.microsoft-watch.com/content/corporate/microsoft_q3_2009_by_the_numbers.html
This campaign stated that it forwarded letters to Mr. Ballmer prior to launching the "New Strategy". It has been indicated that Investor Relations fowarded a email stating that the company has experienced growth and was focused. However, this campaign has continued to state that Microsoft is required to impliment a "New Strategy" that would insulate the company revenue and earnings from a decrease in OS sales. The campaign has indicated that the company is largely dependent on its OS for the majority of the company revenue. This reality is confirmed with the recent quarter release.
Could this be the initial signs of the campaign's predictions?
If Microsoft fails to adopt a "New Strategy" it is probable that this is only the beginning for the company. This campaign has referred to the trend towards cloud computing and mobile. It is interesting to note that Microsoft experienced losses in Online Services and Entertainment and Devices. This indicates that the company is failing in the primary growth trend sectors. This demostrates that the company is failing to maintain its cash cow OS revenue and consumers are spending on services that deal with "cloud computing". This also reaffirms the arguement outlined in "Could Microsoft be the Next General Motors". GM failed to recognise trends and eventually competitors stole market share in new markets. Microsoft is losing in OS and is failing in the new trend sectors. This could prove detrimental to the company.
Its' failing to compete with Google in online services. Unless Mr. Ballmer creates a game changing strategy that will increase share in this sector the company will fail to have a solid revenue base within this domain.
The Entertainment and Devices division has deployed over $9 billion and Xbox trails Wii and Playstation. The Zune was a complete failure. Its Win Mobile is also a dramatic failure despite massive spending.
Another article that gained attention is titled "The Top Ten Stocks to Short Sell", which is located at CBS Marketwatch. The article references the best companies to short-sell. What is alarming is that Microsoft is within this list. Refer to: http://www.marketwatch.com/news/story/story.aspx?guid=%7Bc114b945-f1b4-419d-a029-2ebcf725aaed%7D&link=http://247wallst.com/2009/04/26/the-top-ten-stocks-for-short-sellers-msftintcsirifaigc/
Now, this campaign is not advocating short-selling Microsoft. This campaign is seeking to force Microsoft management to adopt a "New Strategy". This "New Strategy" is located within this blog titled Edited "New Strategy".
The company has experienced a 32% decline. It is failing in Client, Online and Entertainment. The company shares have been referenced as one of the best shares to short-sell. These facts should be a serious "wake-up call" to Mr. Ballmer and The Board.
Who is holding Mr. Ballmer and The Board accountable for these results and the company failing to create shareholder value. If the company fails to impliment a game changing strategy, it will continue to experience a decline in OS. It will continue to experience a revenue decline in Client and consumers move towards netbooks. It could be threatened by IBM, Apple, Linux. There is another threat on the horizon if Oracle acquires Sun.
The company will continue to experience a loss in Online as Google expands it share and product mix. Additionally, Win Mobile through its alliances will fail to generate adequate revenue to offset the decline in OS revenue.
It is time for a "New Strategy". It is time to rally support and effect change.
To offer support though shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
This campaign stated that within the OS market, Microsoft was losing share to competitors. It was stated a "New Strategy" was necessary to offset the potential depletion of revenue from the company cash cows. It was this campaign's contention that Microsoft was required to allocate capital towards initiatives that would supplement a potential decrease in revenue.
Microsoft has released its quarterly results. Refer to: http://money.cnn.com/2009/04/23/technology/microsoft_earnings/index.htm?postversion=2009042316
At this time it might be appropriate to say to Mr. Ballmer "told you so".
According to the release, net income for the company has declined a staggering 32%. This is a significant number.
A large portion of this decline can be attributed to the increased trend with netbooks. This trend caused tremendous impact on the company. The Client division experienced a 16% decline in revenue. The division revenue declined from $4.03 billion to $3.4 billion. Perhaps the most telling with this loss is referenced by Joe Wilcox at Microsoft Watch. Mr. Wilcox states:
"More than 80 percent of Windows revenue comes from OEM sales. Windows licenses then are more transactional. By comparison, about 65 percent of Server and Tools revenue comes from annuity licensing contracts. The difference is important. Annuity customers pay up front, on annual basis, under two- or three-year contracts. These commitments help insulate Microsoft earnings against the highs and lows of the economy or product release cycles. The protection is great for Server and Tools, not so good for Client. Economic conditions demonstrate how dramatic is the difference between transactional and annuity licensing sales".
Refer to: http://www.microsoft-watch.com/content/corporate/microsoft_q3_2009_by_the_numbers.html
This campaign stated that it forwarded letters to Mr. Ballmer prior to launching the "New Strategy". It has been indicated that Investor Relations fowarded a email stating that the company has experienced growth and was focused. However, this campaign has continued to state that Microsoft is required to impliment a "New Strategy" that would insulate the company revenue and earnings from a decrease in OS sales. The campaign has indicated that the company is largely dependent on its OS for the majority of the company revenue. This reality is confirmed with the recent quarter release.
Could this be the initial signs of the campaign's predictions?
If Microsoft fails to adopt a "New Strategy" it is probable that this is only the beginning for the company. This campaign has referred to the trend towards cloud computing and mobile. It is interesting to note that Microsoft experienced losses in Online Services and Entertainment and Devices. This indicates that the company is failing in the primary growth trend sectors. This demostrates that the company is failing to maintain its cash cow OS revenue and consumers are spending on services that deal with "cloud computing". This also reaffirms the arguement outlined in "Could Microsoft be the Next General Motors". GM failed to recognise trends and eventually competitors stole market share in new markets. Microsoft is losing in OS and is failing in the new trend sectors. This could prove detrimental to the company.
Its' failing to compete with Google in online services. Unless Mr. Ballmer creates a game changing strategy that will increase share in this sector the company will fail to have a solid revenue base within this domain.
The Entertainment and Devices division has deployed over $9 billion and Xbox trails Wii and Playstation. The Zune was a complete failure. Its Win Mobile is also a dramatic failure despite massive spending.
Another article that gained attention is titled "The Top Ten Stocks to Short Sell", which is located at CBS Marketwatch. The article references the best companies to short-sell. What is alarming is that Microsoft is within this list. Refer to: http://www.marketwatch.com/news/story/story.aspx?guid=%7Bc114b945-f1b4-419d-a029-2ebcf725aaed%7D&link=http://247wallst.com/2009/04/26/the-top-ten-stocks-for-short-sellers-msftintcsirifaigc/
Now, this campaign is not advocating short-selling Microsoft. This campaign is seeking to force Microsoft management to adopt a "New Strategy". This "New Strategy" is located within this blog titled Edited "New Strategy".
The company has experienced a 32% decline. It is failing in Client, Online and Entertainment. The company shares have been referenced as one of the best shares to short-sell. These facts should be a serious "wake-up call" to Mr. Ballmer and The Board.
Who is holding Mr. Ballmer and The Board accountable for these results and the company failing to create shareholder value. If the company fails to impliment a game changing strategy, it will continue to experience a decline in OS. It will continue to experience a revenue decline in Client and consumers move towards netbooks. It could be threatened by IBM, Apple, Linux. There is another threat on the horizon if Oracle acquires Sun.
The company will continue to experience a loss in Online as Google expands it share and product mix. Additionally, Win Mobile through its alliances will fail to generate adequate revenue to offset the decline in OS revenue.
It is time for a "New Strategy". It is time to rally support and effect change.
To offer support though shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
Sunday, April 19, 2009
R&D SPENDING REQUIRES FOCUS
In a recent article with InfoWorld this campaign is referenced. As with any activist campaign, it is understood that there will subsequently be opposition. There will naturally be groups, analysts and other parties that will fail to agree with an activist campaign.
With the Microsoft Subnet article, (refer to http://www.networkworld.com/community/node/38350 ),the campaign stated that Microsoft was required to pursue an acquisition of Sprint. Mr. McDonald stated that he preferred Research In Motion over Microsoft acquiring Sprint. Mr. Barnicle, an analyst with Pacific Crest Securities stated that he was oppossed to Microsoft pursuing a mobile acquisition.
The campaign conducted analysis and perceived that based on the trend towards handheld and the report by Citi analyst Mark Mahaney that Microsoft required an acquisition to better compete in this sector. In the same Microsoft Subnet article there are two oppossing views by both Mr. McDonald and Mr. Barnicle. However, as mentioned, this oppossition is natural. There is the old adage "You cannot please all the people all the time".
Where this campaign takes issue is when the premise of "The New Strategy" is not understood in its entirety and opinions are then expressed. The campaign was approached by an author seeking to conduct an interview concerning R&D spending with Microsoft. The interview was conducted and the article was published in the British magazine PC Plus.
The article states that Microsoft has increased its R&D spending. It also states that Microsoft is required to focus its R&D spending on creating products that secure consumer loyalty. The article refers to patent 7,296,946 which is a ring binder for containing pages. This is subsequently a waste of capital. The premise of the "New Strategy" was correctly and accurately communicated. (Since the article is not online it cannot be added to this post)
Recently, an article was posted on InfoWorld concerning this campaign and its "New Strategy" for Microsoft. Refer to http://www.infoworld.com/d/developer-world/increased-rd-spending-vital-software-industry-707
The article essentially is well written, well communicated, insightful, and worth reading. The issue is that it also fails to communicate the real intention of "The New Strategy".
Within the article Mr. McAllister makes reference to The Crandrea Group. However, with the article the author makes a couple of critical editorial mistakes. The author indicates:
"Up to this point it's hard to argue with Montgomery's findings. What bothers me, though, are the Crandrea Group's proposed solutions. "It is critical that Microsoft utilize its R&D budget and focus on improving its core products," reads the group's strategy statement. "Rather than deploying capital to create new products, it is crucial to direct capital to improving existing products to secure consumer confidence and loyalty."In other words, the problem isn't that Microsoft's attempts to innovate have failed. The problem is that Microsoft tried to innovate in the first place!Whither software innovation?See what I mean about investors focusing on short-term gain?"
The author fails to comprehend the core of the "New Strategy" for Microsoft. Throughout the activist campaign it has been communicated that a long-term shareholder value strategy was being pursued. The campaign indicated that it was seeking to obtain analysis from MSFT employees to edit and revise the "New Strategy".
It was indicated that MSFT employees could provide the greatest analysis to ensure a long-term strategy was pursued. Subsequently, the campaign is not seeking a short-term band-aid approach, but rather, it is seeking to pursue a long-term strategy. In the post the author is referring to, it is indicated that the "New Strategy" is seeking the following:
"It is critical that Microsoft utilize its R&D budget and focus on improving its core products," reads the group's strategy statement. "Rather than deploying capital to create new products, it is crucial to direct capital to improving existing products to secure consumer confidence and loyalty."
MSFT employees confirmed that MSFT currently and historically has produced poor products. Employees referred to MSN, Zune, Vista. MSFT employees indicated that MSFT is losing loyalty in OS and is failing to be competitive with MSN, and Zune.
Poor company image was confirmed by Mr. Barnicle in the Microsoft Subnet article. This is the primary reason that "The New Strategy" focuses on improving brand perception. This leads into the necessity for Microsoft to improve its brand perception not only through advertising and marketing, but, it is also required to adopt this mentality within its R&D spending.
The "New Strategy" which was edited and revised by MSFT employees specified that focusing on the core was essential. If the company is committing $9 billion on R&D, instead of pursuing new innovation it should concentrate capital towards improving existing products. It was communicated that it should not role out new products until it masters existing products. The campaign based on MSFT employee feedback is not oppossed to R&D spending. However, it is oppossed to deploying capital towards initiatives that will fail to secure revenue and consumer confidence.
Deploying capital towards improving core products is fundamental. This is demonstrated in the Apple ads. A pretend Bill Gates is dividing capital between advertising and improving products. Mac suggests "is that enough" at this point Bill places more money in the advertising pile. MSFT is perceived as creating poor products. Therefore, what employees have indicated is that if the company is going to improve its image, enhance revenue, secure consumers, it has to do what the Apple ad suggests and place capital towards improving existing products. Refer to : http://www.youtube.com/watch?v=MimCZikP8cY
Microsoft has to ensure that Win 7 delivers on its promises and is better than Vista. If it fails, then more consumers will abandon MSFT for other operating systems. Therefore, the campaign is stating "to improve the company, it must improve the "core". Subsequently, this is not a short-term goal, but, it is a long-term necessity. Microsoft is required to ensure that its OS is not "a" operating system but rather it needs to ensure that its "the" operating system.
Consumers have for several years complained about poor products. If the company is deploying $9 billion, a portion of that is required to be allocated to improve the "core" products, and not just seek new innovation. Therefore, if the company has committed to deploy $9 billion in R&D, instead of deploying the entire budget towards useless patents, it is imparative that a portion of that $9 billion be allocated towards ensuring WIN7 is not just a updated Vista.
It essentially reverts to the April 3 post on this blog "Microsoft Requires an Image Makeover". If the company image is battered then "Goal" Number One, the main directive needs to be "Improve the Image". However, as outlined in the April 3 post, Microsoft continues to fail.
Refer to http://www.marketwatch.com/news/story/microsofts-ad-counter-offensive-against-apple/story.aspx?guid=%7B95EC30F8%2DC0B7%2D4AF6%2DBD7E%2D3B0E27905B4C%7D&dist=TQP_Mod_mktwN Also refer to the link within the above post or follow:http://www.marketwatch.com/News/Story/microsoft-needs-help-mad-men/story.aspx?guid=%7B3F67FAE3%2D4733%2D4BC3%2DB30A%2D143EAA9399C6%7D
In the above report the author refers to the notion that through these commercials Microsoft is ultimately admitting that it is Number 2. This is not going to improve Microsoft. It is perhaps the worst move possible to further damage the company image. In essence it is Microsoft admitting defeat. To improve the company image it has to demonstrate through advertising that it is Number One. It has to demonstrate that it has the superior OS not Apple. However, this campaign also has stated that advertising this statement is not enough. To state it is "Number One" then not deliver on the promise is counter-productive. Microsoft is also required to have the "Number One" product.
Brand expert Rob Frankel states that the new commercials by Microsoft will prove detrimental to the company. Refer to: http://www.newsfactor.com/story.xhtml?story_id=65597&full_skip=1
It stands to reason that this focus is required to be translated into R&D spending. Microsoft employees, consumers and reporters have indicated that in various markets Microsoft is not "Number One". Reports also indicate that in OS, although its still "Number One" it is losing share. The long-term required "Goal" of Microsoft is to deliver on its promise, improve its image and produce superior products. This will improve the company image. As a result of improving the image marketshare will follow. Subsequently, this will increase revenue and the long-term health and stability of the company.
What the campaign is stating is simply "image focus" is required in advertising and R&D spending. If you commit $9 billion, a portion is required to be spent on improving the core. Microsoft has to spend capital on making the best OS available to consumers. This will gain consumer loyalty. It will prevent further erosion of share towards consumers switching to Mac OS. This is a long-term strategy that will improve the company image.
Microsoft is required to spend a portion of the $9 billion on improving its online platform. It has to improve this division. It is required to get focus and spend capital that threatens Google's marketshare. Historically, Microsoft has deployed capital and after several years has failed to increase its marketshare. Refer to http://www.pcworld.com/article/161222/report_microsoft_us_search_share_hits_12month_low.html?tk=rss_news
What this campaign is stating is "focus" and deploy capital that will finally cause Google executives to sweat as oppossed to laugh at Microsoft's efforts.
In Mr. McAllister's article it states "See what I mean about investors focusing on short-term gain?"
This campaign is focused on long-term gain. If Microsoft continues deploying tremendous capital towards R&D and continues to produce poor products the end result will be wasted capital. However, if it adopts focus on improving the core products and improve the company image it will ultimately result in long-term gain.
To offer support in the form of shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
With the Microsoft Subnet article, (refer to http://www.networkworld.com/community/node/38350 ),the campaign stated that Microsoft was required to pursue an acquisition of Sprint. Mr. McDonald stated that he preferred Research In Motion over Microsoft acquiring Sprint. Mr. Barnicle, an analyst with Pacific Crest Securities stated that he was oppossed to Microsoft pursuing a mobile acquisition.
The campaign conducted analysis and perceived that based on the trend towards handheld and the report by Citi analyst Mark Mahaney that Microsoft required an acquisition to better compete in this sector. In the same Microsoft Subnet article there are two oppossing views by both Mr. McDonald and Mr. Barnicle. However, as mentioned, this oppossition is natural. There is the old adage "You cannot please all the people all the time".
Where this campaign takes issue is when the premise of "The New Strategy" is not understood in its entirety and opinions are then expressed. The campaign was approached by an author seeking to conduct an interview concerning R&D spending with Microsoft. The interview was conducted and the article was published in the British magazine PC Plus.
The article states that Microsoft has increased its R&D spending. It also states that Microsoft is required to focus its R&D spending on creating products that secure consumer loyalty. The article refers to patent 7,296,946 which is a ring binder for containing pages. This is subsequently a waste of capital. The premise of the "New Strategy" was correctly and accurately communicated. (Since the article is not online it cannot be added to this post)
Recently, an article was posted on InfoWorld concerning this campaign and its "New Strategy" for Microsoft. Refer to http://www.infoworld.com/d/developer-world/increased-rd-spending-vital-software-industry-707
The article essentially is well written, well communicated, insightful, and worth reading. The issue is that it also fails to communicate the real intention of "The New Strategy".
Within the article Mr. McAllister makes reference to The Crandrea Group. However, with the article the author makes a couple of critical editorial mistakes. The author indicates:
"Up to this point it's hard to argue with Montgomery's findings. What bothers me, though, are the Crandrea Group's proposed solutions. "It is critical that Microsoft utilize its R&D budget and focus on improving its core products," reads the group's strategy statement. "Rather than deploying capital to create new products, it is crucial to direct capital to improving existing products to secure consumer confidence and loyalty."In other words, the problem isn't that Microsoft's attempts to innovate have failed. The problem is that Microsoft tried to innovate in the first place!Whither software innovation?See what I mean about investors focusing on short-term gain?"
The author fails to comprehend the core of the "New Strategy" for Microsoft. Throughout the activist campaign it has been communicated that a long-term shareholder value strategy was being pursued. The campaign indicated that it was seeking to obtain analysis from MSFT employees to edit and revise the "New Strategy".
It was indicated that MSFT employees could provide the greatest analysis to ensure a long-term strategy was pursued. Subsequently, the campaign is not seeking a short-term band-aid approach, but rather, it is seeking to pursue a long-term strategy. In the post the author is referring to, it is indicated that the "New Strategy" is seeking the following:
"It is critical that Microsoft utilize its R&D budget and focus on improving its core products," reads the group's strategy statement. "Rather than deploying capital to create new products, it is crucial to direct capital to improving existing products to secure consumer confidence and loyalty."
MSFT employees confirmed that MSFT currently and historically has produced poor products. Employees referred to MSN, Zune, Vista. MSFT employees indicated that MSFT is losing loyalty in OS and is failing to be competitive with MSN, and Zune.
Poor company image was confirmed by Mr. Barnicle in the Microsoft Subnet article. This is the primary reason that "The New Strategy" focuses on improving brand perception. This leads into the necessity for Microsoft to improve its brand perception not only through advertising and marketing, but, it is also required to adopt this mentality within its R&D spending.
The "New Strategy" which was edited and revised by MSFT employees specified that focusing on the core was essential. If the company is committing $9 billion on R&D, instead of pursuing new innovation it should concentrate capital towards improving existing products. It was communicated that it should not role out new products until it masters existing products. The campaign based on MSFT employee feedback is not oppossed to R&D spending. However, it is oppossed to deploying capital towards initiatives that will fail to secure revenue and consumer confidence.
Deploying capital towards improving core products is fundamental. This is demonstrated in the Apple ads. A pretend Bill Gates is dividing capital between advertising and improving products. Mac suggests "is that enough" at this point Bill places more money in the advertising pile. MSFT is perceived as creating poor products. Therefore, what employees have indicated is that if the company is going to improve its image, enhance revenue, secure consumers, it has to do what the Apple ad suggests and place capital towards improving existing products. Refer to : http://www.youtube.com/watch?v=MimCZikP8cY
Microsoft has to ensure that Win 7 delivers on its promises and is better than Vista. If it fails, then more consumers will abandon MSFT for other operating systems. Therefore, the campaign is stating "to improve the company, it must improve the "core". Subsequently, this is not a short-term goal, but, it is a long-term necessity. Microsoft is required to ensure that its OS is not "a" operating system but rather it needs to ensure that its "the" operating system.
Consumers have for several years complained about poor products. If the company is deploying $9 billion, a portion of that is required to be allocated to improve the "core" products, and not just seek new innovation. Therefore, if the company has committed to deploy $9 billion in R&D, instead of deploying the entire budget towards useless patents, it is imparative that a portion of that $9 billion be allocated towards ensuring WIN7 is not just a updated Vista.
It essentially reverts to the April 3 post on this blog "Microsoft Requires an Image Makeover". If the company image is battered then "Goal" Number One, the main directive needs to be "Improve the Image". However, as outlined in the April 3 post, Microsoft continues to fail.
Refer to http://www.marketwatch.com/news/story/microsofts-ad-counter-offensive-against-apple/story.aspx?guid=%7B95EC30F8%2DC0B7%2D4AF6%2DBD7E%2D3B0E27905B4C%7D&dist=TQP_Mod_mktwN Also refer to the link within the above post or follow:http://www.marketwatch.com/News/Story/microsoft-needs-help-mad-men/story.aspx?guid=%7B3F67FAE3%2D4733%2D4BC3%2DB30A%2D143EAA9399C6%7D
In the above report the author refers to the notion that through these commercials Microsoft is ultimately admitting that it is Number 2. This is not going to improve Microsoft. It is perhaps the worst move possible to further damage the company image. In essence it is Microsoft admitting defeat. To improve the company image it has to demonstrate through advertising that it is Number One. It has to demonstrate that it has the superior OS not Apple. However, this campaign also has stated that advertising this statement is not enough. To state it is "Number One" then not deliver on the promise is counter-productive. Microsoft is also required to have the "Number One" product.
Brand expert Rob Frankel states that the new commercials by Microsoft will prove detrimental to the company. Refer to: http://www.newsfactor.com/story.xhtml?story_id=65597&full_skip=1
It stands to reason that this focus is required to be translated into R&D spending. Microsoft employees, consumers and reporters have indicated that in various markets Microsoft is not "Number One". Reports also indicate that in OS, although its still "Number One" it is losing share. The long-term required "Goal" of Microsoft is to deliver on its promise, improve its image and produce superior products. This will improve the company image. As a result of improving the image marketshare will follow. Subsequently, this will increase revenue and the long-term health and stability of the company.
What the campaign is stating is simply "image focus" is required in advertising and R&D spending. If you commit $9 billion, a portion is required to be spent on improving the core. Microsoft has to spend capital on making the best OS available to consumers. This will gain consumer loyalty. It will prevent further erosion of share towards consumers switching to Mac OS. This is a long-term strategy that will improve the company image.
Microsoft is required to spend a portion of the $9 billion on improving its online platform. It has to improve this division. It is required to get focus and spend capital that threatens Google's marketshare. Historically, Microsoft has deployed capital and after several years has failed to increase its marketshare. Refer to http://www.pcworld.com/article/161222/report_microsoft_us_search_share_hits_12month_low.html?tk=rss_news
What this campaign is stating is "focus" and deploy capital that will finally cause Google executives to sweat as oppossed to laugh at Microsoft's efforts.
In Mr. McAllister's article it states "See what I mean about investors focusing on short-term gain?"
This campaign is focused on long-term gain. If Microsoft continues deploying tremendous capital towards R&D and continues to produce poor products the end result will be wasted capital. However, if it adopts focus on improving the core products and improve the company image it will ultimately result in long-term gain.
To offer support in the form of shares contact newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
Monday, April 13, 2009
"Edited" New Strategy
Typically, after obtaining feedback in regards to the length of previous posts, this campaign is attempting to refrain from long posts. However, for the purpose of providing the "New Strategy" in its entirety, this post will be longer.
It has been indicated that this campaign was seeking to use a tactic similar to Ironfire Capital and its "Plan B" for Yahoo. Ironfire used wiki's to enable shareholders to edit and revise the "Plan B".
It has been mentioned in previous posts that this campaign was seeking to obtain insight and analysis from Microsoft employees to edit and revise the "New Strategy" for Microsoft. The "New Strategy" is edited. It has evolved modestly from when we launched the campaign. It fails to involve Microsoft acquiring Sprint. Instead in now involves Microsoft acquiring Research In Motion.
It also will focus on improving effeciencies with Research and Development spending. Below is the edited version of the "New Strategy".
NEW STRATEGY FOR MICROSOFT
1)Steve Ballmer is required to be replaced as CEO of Microsoft.
It has been communicated by reporters, analysts and Microsoft employees that Mr. Ballmer is required to resign. It is the fundamental responsibility of the Board to ensure that it acts within the best interest of shareholders.
a)During Mr. Ballmer’s tenure an acquisition of Yahoo was pursued. Mr. Ballmer pursued a 65%premium bid for Yahoo valued at $45 billion. An analyst with Goldman Sachs stated this was the stupidest move the company history. According to a recent report the company commands only 8% of the search sector. This is despite massive spending with acquisitions and R&D.
The largest dilemma with the Yahoo bid decision was the lack of strategy and correct communication. During a meeting with analysts Mr. Ballmer when confronted with acquiring Yahoo stated that Microsoft prefers organic growth. Less than one year after this statement Mr. Ballmer pursues a Board approved 65% premium bid for Yahoo.
In 2005, Microsoft generated online advertising revenue of $1.5 billion. In 2007, Microsoft reported revenue of $2 billion. In 2005, Microsoft controlled 8% of the market share. However, in 2007, it appears that it had declined to approximately 6% market share.
Currently, as indicated in a recent PC World report Microsoft controls only 8%. Therefore, despite various acquisitions within this sector there is minimal improvement. According to reports, the company in 2008 within Online services experienced a loss of $468 million. However, Google commands over 60% market share and generates in excess of $20 billion in revenue and $4 billion in net income.
b) Microsoft is failing within the Web 2.0 sector. Mr. Ballmer has tried to put Microsoft into the Web 2.0 game but his efforts-to-date haven't been very effective. Microsoft isn't a leader in Web 2.0.
c) Mr. Ballmer during his tenure deployed $40 billion towards share buybacks. Despite this massive expenditure the shares have remained flat. The most disconcerting event with this failed expenditure is the announcement by Mr. Ballmer that Microsoft intends to deploy an additional $40 billion through to 2013 on share buybacks.
d) During Mr. Ballmer’s tenure the company shares have remained flat and stagnant for a long-term period of approximately eight years. In 2004, at a shareholder meeting when confronted with a stagnant share price Mr. Ballmer indicated that the company had plans and subsequently the shares would take care of itself. Despite this statement and Mr. Ballmer’s plans, the shares have continued to remain flat and fail to create shareholder value. During Mr. Ballmer’s tenure Microsoft has lost $300 billion in shareholder value.
During Mr. Ballmer’s tenure he has presided over massive spending, poor decisions, poor execution of plans, failed to communicate strategy to shareholders and employees, has failed to create shareholder value and is responsible for Microsoft losing $300 billion in market value. This subsequently leads to a no-confidence with Mr. Ballmer.
2) Microsoft is required to improve its image and brand perception. Today more than ever before, it is essential to establish a powerful brand to enable a successful and profitable business, and position your company as a differentiated thought leader. It is important to consider your companies’ brand as a critical asset to your business. Your brand is more than a graphical mark. It is an investment that you make in your customer relationships. Brand equity is your return on that investment. Your brand is also a promise to your customers.
The primary role of your brand is to establish & enhance customer relationships to create attention, loyalty and drive business results. Building a unique brand identity is the key to acquiring and retaining this attention and loyalty. Successful branding sets your firm apart from the competition, and therefore, makes your company products and services more desirable and valuable to your target prospects and customers.
Over time, your brand image and brand reputation will lead to committed relationships with your customers. This is because a consistent image builds familiarity. Familiarity strengthens relationships, and relationships build revenue. Ultimately, branding builds your market place reputation and drives improved financial performance to the bottom line.
Microsoft has failed to establish a brand that attracts and maintains consumer loyalty. Through failures such as Vista, Microsoft Mobile, and Zune it has failed to deliver on its promises to consumers. Subsequently, the company has failed to enhance customer relationships. Ultimately, this will result in a negative impact with improving financial performance and building revenue.
Brand Expert Rob Frankel has indicated that "Microsoft has no brand strategy. Never did. They have an identity, but no brand strategy. As a result, Microsoft is never proactive, but always reactive to its competition." Therefore, it is imperative that Microsoft fire its current advertising agency Crispin.
Microsoft is required to allocate capital towards establishing a brand identity and positive brand perception that will secure consumer loyalty and propel revenue growth.
3) Microsoft is required to improve R&D spending. Microsoft's strategy (and, therefore, its technological developments) are directed only at extracting more and more money from the customer, and at continuing to do so in the future. The customers' needs are irrelevant.
Subsequently, this mentality has resulted in poor brand perception. This campaign obtained the following comment from a Microsoft employee “Microsoft responds to one thing: the painful pressure of market realities. If we can sell you garbage and get away with it, we will sell you garbage”.
One of the fundamental dilemmas with Microsoft is that consumers complain that the company roles out products that are satisfactory. As one MSFT employee stated “MSFT has its hand on everything BUT a grip on nothing”.
It is critical that Microsoft utilize its R&D budget and focus on improving its core products. Rather than deploying capital to create new products, it is crucial to direct capital to improving existing products to secure consumer confidence and loyalty. Without this as a “goal” Microsoft could deploy $9 billion on R&D and still fail to capture consumer loyalty.
OS X is built on a solid, high performance, secure BSD UNIX foundation. LINUX is based on a solid, high performance, secure kernel. MS Windows, immature technolgies and never properly modernized. Poor performance. NO security. Weak development tools.
By focusing on its current core products, the company will deploy capital to ensure that the core products are superior and therefore will capture consumer confidence and loyalty. This will unlock shareholder value through increasing brand perception and consumer loyalty.
Through focusing on the core and establishing the core products functionality, consumer friendly this will capture consumers. Subsequently, market share will increase in within the core product sectors.
b) First and foremost, get rid of the existing, dysfunctional senior management. Now. Unless the senior management people are engineers and have a patent or several to their name, they have no place managing engineers.
Microsoft was a software engineering company first, so they have to get management on board with that NOW! There is a fundamental difference in mindset between engineers and business/accounting types and until the senior management team at MS recognizes this again, the company is lost.
Therefore, Microsoft has committed to lay off employees to satisfy Wall Street. Rather than lay off developers, engineers, instead MSFT is required to lay off managers that are not engineers and promote engineers into managerial roles.
To put it succinctly, the people at the top are too far removed from both the people in the trenches and the customers who buy their products. With that many layers of “middle management”, the message either way gets lost and no one has a clear sense of what is going on. They even have exercises in that very issue and they don’t learn from it. What good does it do if you follow process to the letter while producing the wrong product?”
Therefore, although this campaign fails to approve layoffs, since Microsoft has committed to layoff employees, it is integral that it layoff managers that are “middle management “ and not engineers. This will produce respect within the R&D labs. It will create vision and direction. It will improve efficiencies and reduce spending on process. This will make R&D spending efficient and ensure innovation is pursued. Ultimately, this will reduce wasted capital on process, and create a greater return on investment through innovation.
4) Microsoft is required to abandon its share buyback plan. Microsoft has disclosed its plans to buy back stocks of worth $40 billion. The company will buy back its shares from investors and it will be the biggest single buy-back plan in history.
The analysts are claiming that this move is an attempt by the company to sustain its share price drop which has gone down almost 30% this year. According to reports, the plan will help company to renew its share price which has declined sharply due to its failed $47.5billion bid to buy the internet portal Yahoo.
The company has never been in debt since its establishment and at the end of June this year, currently the company has approximately $23.7billion. The company was following a buy back 2004 plan which started as a $30billion project and was later boosted by another $10 billion. The new buy-back, which will run until 2013, is the single biggest share buy-back in history. The new program will expire on September 30, 2013.
The original buyback plan resulted in the company deploying $40 billion in capital. Despite deploying $40 billion in capital the shares remained stagnant. In 2004, the company shares were trading at approximately $25 per share. During the next four years and deploying $40 billion the shares remained flat. In 2008, the shares were still trading at approximately $25 per share. Therefore, this strategy failed to prove beneficial for shareholders.
The $40B buyback over 5 years continues what they've done in the past. This averages $8B a year and over the last 12 months they've bought back $9B. It will prove to have a similar effect as the previous initiative. It will result in the company deploying $40 billion without having an effect on the share price.
The company is required to abandon its share buyback plan and allocate the deployment of capital to acquisition growth. This will prove a superior utilization of capital and create a greater long-term return to shareholders. It will prove to have a greater return on investment then the proposed share buyback plan.
5)Microsoft is required to increase market share in search and advertising. According to PC Plus Magazine Microsoft currently controls approximately 8% of this sector.
Microsoft is required to enter negotiations with Yahoo to complete a search deal. This will enable Microsoft to command approximately 30% of the market.
Microsoft is required to acquire Ask.com. This company has potentially better algorithms than Google. However, the company lacks market presence. Microsoft through acquiring a search deal with Yahoo and acquiring the technology from Ask would be able to integrate the two acquisitions to compliment its current platform.
These acquisitions would provide Microsoft with potentially better technology than Google and with the combined ‘search’ from Yahoo, would enable Microsoft to become a viable competitor within the search and advertising sector.
6) Microsoft is required to acquire Research In Motion. Wireless delivery definitely has to be examined. Citi analyst Mark Mahaney states Microsoft's recent deal to provide search to Verizon mobile users won't be a winner for Microsoft, as it will require each user to conduct 17 searches per month on their phones in the next five years just to break even.
Microsoft is required to acquire RIM. RIM is a company with a good degree of loyal "addict" mindshare, which provides a more profitable moat with less price elasticity than multiple alliances. It would boost the MS image, even if it requires a more significant investment. And MS' recent difficulties attracting new customers wouldn't hurt as much here, because of the loyal user base and the inherent attractiveness of the RIM platform to those who consider themselves more "business people" than "technologists".
Absent a telco willing to pay Microsoft for new customers (AT&T / Apple iphone), if Microsoft is intent on operating in the mobile space, it is necessary to be disruptive in the market. What Microsoft has done so far hasn't been resoundingly successful. RIM is viable because they've been running a successful service business -- along the lines of the cloud computing model -- for an extended time.
Another reason to avoid alliances with Sprint, and Verizon as well, is that those companies use CDMA cellular technology, as opposed to the GSM technology in use in most other countries.
Consider that Microsoft already owns Danger, maker of the Sidekick. Acquiring the Blackberry platform would mean that Microsoft would have presence in both the "youthful consumer" and "business" segments of the cellular communication device market.
We are seeking to rally support and effect change. We are seeking to establish a coalition of frustrated Microsoft shareholders to effect change.
To offer support through shares contact:
newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
Refer to:
http://www.youtube.com/watch?v=JnJeJPsmOAk
or
http://www.youtube.com/watch?v=Sbo6bvl-7Sk&feature=channel
Final Note:
The youtube videos were recorded with a live webcam. The initial web cam file was visually fine. However,when downloaded onto youtube the streaming or timing is a couple of seconds off. I apoligise. Subsequently, this is the reason for the two links. Based on my discontent with the first link, a second attempt was completed. In the future, a video recorder will be utilized to hopefully improve the quality. Additionally, on the first youtube page (JNJEPsmOAK) is a link to Ironfire Capital titled "Yahoo!Shareholders in favor of Selling". This will provide information concerning the success of this campaign against Yahoo.
It has been indicated that this campaign was seeking to use a tactic similar to Ironfire Capital and its "Plan B" for Yahoo. Ironfire used wiki's to enable shareholders to edit and revise the "Plan B".
It has been mentioned in previous posts that this campaign was seeking to obtain insight and analysis from Microsoft employees to edit and revise the "New Strategy" for Microsoft. The "New Strategy" is edited. It has evolved modestly from when we launched the campaign. It fails to involve Microsoft acquiring Sprint. Instead in now involves Microsoft acquiring Research In Motion.
It also will focus on improving effeciencies with Research and Development spending. Below is the edited version of the "New Strategy".
NEW STRATEGY FOR MICROSOFT
1)Steve Ballmer is required to be replaced as CEO of Microsoft.
It has been communicated by reporters, analysts and Microsoft employees that Mr. Ballmer is required to resign. It is the fundamental responsibility of the Board to ensure that it acts within the best interest of shareholders.
a)During Mr. Ballmer’s tenure an acquisition of Yahoo was pursued. Mr. Ballmer pursued a 65%premium bid for Yahoo valued at $45 billion. An analyst with Goldman Sachs stated this was the stupidest move the company history. According to a recent report the company commands only 8% of the search sector. This is despite massive spending with acquisitions and R&D.
The largest dilemma with the Yahoo bid decision was the lack of strategy and correct communication. During a meeting with analysts Mr. Ballmer when confronted with acquiring Yahoo stated that Microsoft prefers organic growth. Less than one year after this statement Mr. Ballmer pursues a Board approved 65% premium bid for Yahoo.
In 2005, Microsoft generated online advertising revenue of $1.5 billion. In 2007, Microsoft reported revenue of $2 billion. In 2005, Microsoft controlled 8% of the market share. However, in 2007, it appears that it had declined to approximately 6% market share.
Currently, as indicated in a recent PC World report Microsoft controls only 8%. Therefore, despite various acquisitions within this sector there is minimal improvement. According to reports, the company in 2008 within Online services experienced a loss of $468 million. However, Google commands over 60% market share and generates in excess of $20 billion in revenue and $4 billion in net income.
b) Microsoft is failing within the Web 2.0 sector. Mr. Ballmer has tried to put Microsoft into the Web 2.0 game but his efforts-to-date haven't been very effective. Microsoft isn't a leader in Web 2.0.
c) Mr. Ballmer during his tenure deployed $40 billion towards share buybacks. Despite this massive expenditure the shares have remained flat. The most disconcerting event with this failed expenditure is the announcement by Mr. Ballmer that Microsoft intends to deploy an additional $40 billion through to 2013 on share buybacks.
d) During Mr. Ballmer’s tenure the company shares have remained flat and stagnant for a long-term period of approximately eight years. In 2004, at a shareholder meeting when confronted with a stagnant share price Mr. Ballmer indicated that the company had plans and subsequently the shares would take care of itself. Despite this statement and Mr. Ballmer’s plans, the shares have continued to remain flat and fail to create shareholder value. During Mr. Ballmer’s tenure Microsoft has lost $300 billion in shareholder value.
During Mr. Ballmer’s tenure he has presided over massive spending, poor decisions, poor execution of plans, failed to communicate strategy to shareholders and employees, has failed to create shareholder value and is responsible for Microsoft losing $300 billion in market value. This subsequently leads to a no-confidence with Mr. Ballmer.
2) Microsoft is required to improve its image and brand perception. Today more than ever before, it is essential to establish a powerful brand to enable a successful and profitable business, and position your company as a differentiated thought leader. It is important to consider your companies’ brand as a critical asset to your business. Your brand is more than a graphical mark. It is an investment that you make in your customer relationships. Brand equity is your return on that investment. Your brand is also a promise to your customers.
The primary role of your brand is to establish & enhance customer relationships to create attention, loyalty and drive business results. Building a unique brand identity is the key to acquiring and retaining this attention and loyalty. Successful branding sets your firm apart from the competition, and therefore, makes your company products and services more desirable and valuable to your target prospects and customers.
Over time, your brand image and brand reputation will lead to committed relationships with your customers. This is because a consistent image builds familiarity. Familiarity strengthens relationships, and relationships build revenue. Ultimately, branding builds your market place reputation and drives improved financial performance to the bottom line.
Microsoft has failed to establish a brand that attracts and maintains consumer loyalty. Through failures such as Vista, Microsoft Mobile, and Zune it has failed to deliver on its promises to consumers. Subsequently, the company has failed to enhance customer relationships. Ultimately, this will result in a negative impact with improving financial performance and building revenue.
Brand Expert Rob Frankel has indicated that "Microsoft has no brand strategy. Never did. They have an identity, but no brand strategy. As a result, Microsoft is never proactive, but always reactive to its competition." Therefore, it is imperative that Microsoft fire its current advertising agency Crispin.
Microsoft is required to allocate capital towards establishing a brand identity and positive brand perception that will secure consumer loyalty and propel revenue growth.
3) Microsoft is required to improve R&D spending. Microsoft's strategy (and, therefore, its technological developments) are directed only at extracting more and more money from the customer, and at continuing to do so in the future. The customers' needs are irrelevant.
Subsequently, this mentality has resulted in poor brand perception. This campaign obtained the following comment from a Microsoft employee “Microsoft responds to one thing: the painful pressure of market realities. If we can sell you garbage and get away with it, we will sell you garbage”.
One of the fundamental dilemmas with Microsoft is that consumers complain that the company roles out products that are satisfactory. As one MSFT employee stated “MSFT has its hand on everything BUT a grip on nothing”.
It is critical that Microsoft utilize its R&D budget and focus on improving its core products. Rather than deploying capital to create new products, it is crucial to direct capital to improving existing products to secure consumer confidence and loyalty. Without this as a “goal” Microsoft could deploy $9 billion on R&D and still fail to capture consumer loyalty.
OS X is built on a solid, high performance, secure BSD UNIX foundation. LINUX is based on a solid, high performance, secure kernel. MS Windows, immature technolgies and never properly modernized. Poor performance. NO security. Weak development tools.
By focusing on its current core products, the company will deploy capital to ensure that the core products are superior and therefore will capture consumer confidence and loyalty. This will unlock shareholder value through increasing brand perception and consumer loyalty.
Through focusing on the core and establishing the core products functionality, consumer friendly this will capture consumers. Subsequently, market share will increase in within the core product sectors.
b) First and foremost, get rid of the existing, dysfunctional senior management. Now. Unless the senior management people are engineers and have a patent or several to their name, they have no place managing engineers.
Microsoft was a software engineering company first, so they have to get management on board with that NOW! There is a fundamental difference in mindset between engineers and business/accounting types and until the senior management team at MS recognizes this again, the company is lost.
Therefore, Microsoft has committed to lay off employees to satisfy Wall Street. Rather than lay off developers, engineers, instead MSFT is required to lay off managers that are not engineers and promote engineers into managerial roles.
To put it succinctly, the people at the top are too far removed from both the people in the trenches and the customers who buy their products. With that many layers of “middle management”, the message either way gets lost and no one has a clear sense of what is going on. They even have exercises in that very issue and they don’t learn from it. What good does it do if you follow process to the letter while producing the wrong product?”
Therefore, although this campaign fails to approve layoffs, since Microsoft has committed to layoff employees, it is integral that it layoff managers that are “middle management “ and not engineers. This will produce respect within the R&D labs. It will create vision and direction. It will improve efficiencies and reduce spending on process. This will make R&D spending efficient and ensure innovation is pursued. Ultimately, this will reduce wasted capital on process, and create a greater return on investment through innovation.
4) Microsoft is required to abandon its share buyback plan. Microsoft has disclosed its plans to buy back stocks of worth $40 billion. The company will buy back its shares from investors and it will be the biggest single buy-back plan in history.
The analysts are claiming that this move is an attempt by the company to sustain its share price drop which has gone down almost 30% this year. According to reports, the plan will help company to renew its share price which has declined sharply due to its failed $47.5billion bid to buy the internet portal Yahoo.
The company has never been in debt since its establishment and at the end of June this year, currently the company has approximately $23.7billion. The company was following a buy back 2004 plan which started as a $30billion project and was later boosted by another $10 billion. The new buy-back, which will run until 2013, is the single biggest share buy-back in history. The new program will expire on September 30, 2013.
The original buyback plan resulted in the company deploying $40 billion in capital. Despite deploying $40 billion in capital the shares remained stagnant. In 2004, the company shares were trading at approximately $25 per share. During the next four years and deploying $40 billion the shares remained flat. In 2008, the shares were still trading at approximately $25 per share. Therefore, this strategy failed to prove beneficial for shareholders.
The $40B buyback over 5 years continues what they've done in the past. This averages $8B a year and over the last 12 months they've bought back $9B. It will prove to have a similar effect as the previous initiative. It will result in the company deploying $40 billion without having an effect on the share price.
The company is required to abandon its share buyback plan and allocate the deployment of capital to acquisition growth. This will prove a superior utilization of capital and create a greater long-term return to shareholders. It will prove to have a greater return on investment then the proposed share buyback plan.
5)Microsoft is required to increase market share in search and advertising. According to PC Plus Magazine Microsoft currently controls approximately 8% of this sector.
Microsoft is required to enter negotiations with Yahoo to complete a search deal. This will enable Microsoft to command approximately 30% of the market.
Microsoft is required to acquire Ask.com. This company has potentially better algorithms than Google. However, the company lacks market presence. Microsoft through acquiring a search deal with Yahoo and acquiring the technology from Ask would be able to integrate the two acquisitions to compliment its current platform.
These acquisitions would provide Microsoft with potentially better technology than Google and with the combined ‘search’ from Yahoo, would enable Microsoft to become a viable competitor within the search and advertising sector.
6) Microsoft is required to acquire Research In Motion. Wireless delivery definitely has to be examined. Citi analyst Mark Mahaney states Microsoft's recent deal to provide search to Verizon mobile users won't be a winner for Microsoft, as it will require each user to conduct 17 searches per month on their phones in the next five years just to break even.
Microsoft is required to acquire RIM. RIM is a company with a good degree of loyal "addict" mindshare, which provides a more profitable moat with less price elasticity than multiple alliances. It would boost the MS image, even if it requires a more significant investment. And MS' recent difficulties attracting new customers wouldn't hurt as much here, because of the loyal user base and the inherent attractiveness of the RIM platform to those who consider themselves more "business people" than "technologists".
Absent a telco willing to pay Microsoft for new customers (AT&T / Apple iphone), if Microsoft is intent on operating in the mobile space, it is necessary to be disruptive in the market. What Microsoft has done so far hasn't been resoundingly successful. RIM is viable because they've been running a successful service business -- along the lines of the cloud computing model -- for an extended time.
Another reason to avoid alliances with Sprint, and Verizon as well, is that those companies use CDMA cellular technology, as opposed to the GSM technology in use in most other countries.
Consider that Microsoft already owns Danger, maker of the Sidekick. Acquiring the Blackberry platform would mean that Microsoft would have presence in both the "youthful consumer" and "business" segments of the cellular communication device market.
We are seeking to rally support and effect change. We are seeking to establish a coalition of frustrated Microsoft shareholders to effect change.
To offer support through shares contact:
newstrategy4msft@gmail.com
We can be contacted at thecrandreagroup@hotmail.com
Refer to:
http://www.youtube.com/watch?v=JnJeJPsmOAk
or
http://www.youtube.com/watch?v=Sbo6bvl-7Sk&feature=channel
Final Note:
The youtube videos were recorded with a live webcam. The initial web cam file was visually fine. However,when downloaded onto youtube the streaming or timing is a couple of seconds off. I apoligise. Subsequently, this is the reason for the two links. Based on my discontent with the first link, a second attempt was completed. In the future, a video recorder will be utilized to hopefully improve the quality. Additionally, on the first youtube page (JNJEPsmOAK) is a link to Ironfire Capital titled "Yahoo!Shareholders in favor of Selling". This will provide information concerning the success of this campaign against Yahoo.
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