● 08.23.10

●● Microsoft Approaches New Minimums and Loses Billions Online

Posted in Finance, Microsoft at 1:15 am by Dr. Roy Schestowitz

Summary: A look at the sides of Microsoft which too few people are aware of — the ones without cash cows (Microsoft is said to have already lost more than $6 billion online, for example)

From a purely financial point of view, Microsoft is not a good company. One of its revenue sources appears to be extorting Linux vendors (thanks to Novell which initiated this), but some of its main revenue sources are the ‘cash cows’, Windows and Office which are both declining as cash cows [1, 2, 3, 4]. “Microsoft (MSFT) Approaches New Downside Target of $24.64,” says this report and the company’s current value is actually $24.22 (52-week range is $22.73-$31.58).

↺ Microsoft is not a good company

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↺ says this report

It is being pointed out again that “Microsoft’s lost eight years online: More than $6 billion down the tubes” and as another site puts it:

↺ pointed out again

↺ another site puts it

> Microsoft lost more than $6 billion in operating losses on revenue over the last eight years according to Larry Dignan, ZDNet Analyst.In fiscal 2010 ending June 30, Microsoft reported an operating loss of $2.35 billion on revenue of $2.2 billion for its online services division . Microsoft’s online services division has been building out data centers for Azure. Microsoft noted in its annual report:Cost of revenue increased $700 million or 82%, primarily driven by increased online traffic acquisition, data center and equipment, and headcount-related costs. Research and development expenses increased $153 million or 17%, primarily due to increased headcount-related expenses.

As Microsoft’s cash cows suffer a decline (in sale numbers or margins), the company will lose its ability to operate and more layoffs will be required. More on Microsoft’s financial performance later, including downgrades of the stock. █

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