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MICROSOFT IS ABSORBING a $6.2 billion charge to reflect that one of the biggest deals in its 37-year history turned out to be a dud.
The non-cash charge could saddle Microsoft Corporation with a loss for its fiscal fourth quarter ended in June.
Analysts polled by FactSet had predicted Microsoft would earn about $5.3 billion for the period. The company hasn’t suffered a quarterly loss during the past 20 years, according to its website.
Microsoft is scheduled to release its latest quarterly results on July 19.
The world’s largest software maker blamed the setback on the disappointing performance of aQuantive. That’s an online advertising service that Microsoft bought for $6.3 billion in 2007 to mount a more serious challenge to one of its biggest rivals, Internet search leader Google Inc.
aQuantive
The aQuantive deal ranked as the most expensive deal in Microsoft’s history until it was eclipsed last year by the company’s $8.5 billion purchase of Internet video chat service Skype.
Microsoft’s $6.2 billion charge represents a sobering acknowledgement that aQuantive didn’t bring in as much online advertising revenue as envisioned, forcing management to write off most of the purchase price.
To add to Microsoft’s mortification, Google has been milking the acquisition of an aQuantive rival to widen its lead in the steadily growing online ad market. Google bought DoubleClick for $3.2 billion about eight months after Microsoft took control of aQuantive,
Since then, Google’s annual profit and advertising sales have more than doubled. Last year, Google earned $9.7 billion and collected $36.5 billion in ad revenue.
Losses
Microsoft’s online division has sustained losses totalling nearly $9 billion since the company bought aQuantive. The online division generated $2.5 billion in revenue during Microsoft’s fiscal 2011, just $54 million more than in fiscal 2007.
Although the online division has been faring slightly better in the past year, “the company’s expectations for future growth and profitability are lower than previous estimates,” Microsoft said in a statement.
Bing, a search engine that Microsoft unveiled four years ago, has been getting more usage, but most of its gains have come at the expense of a business partner, Yahoo Inc.
Microsoft’s search technology has been powering searches on Yahoo’s website for nearly two years, but that alliance hasn’t dented Google’s market share.
Windows 8
Google’s share of the US search advertising market has risen from 74 percent in 2010 to 78 percent this year, according to the research firm eMarketer. Meanwhile, Yahoo’s share US search advertising has fallen from 10 percent in 2010 to less than 5 percent this year while Microsoft’s cut has remained unchanged at 7 percent.
The revisions in Windows 8, expected to hit the market this autumn, are being counted on to help revive personal computer sales and establish Microsoft as a major player in the tablet computer market.
- Michael Liedtke
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Well done on completing the film. Will seek it out.
The unfortunate thing is, politicians only pretend to care what people think at one time. Election time. The rest of the time, people are an annoyance to be kept at a distance. They have police keeping the public well away from the public servants and a media to keep them dumb. No amount of protest was going to stop that, or any other war. As long as there’s profit to be made, the march of war will continue.
It didn’t make a blind bit of difference which shows that it is a mirage of democKracy that those who we ‘elect’ to be in charge or ‘represent’ our view are not in charge at all. It is the military-industrial might that is and it doesn’t give a tinker’s curse about civilisation.
That was the first protest I took any of my children. It felt like a special day. If it didn’t stop the war, it did help people understand that public mobilisation in large scale is possible, and it helped unmask the true interests of politicians, which are not the same as the public’s.
It’s people like this that allow groups like ISIS or Al Qaeda to grow with their attitudes of appeasement.
More like a continuous cosying up to the wrong type of dictator, interfering in internal conflict and arming the wrong sides, making ‘Hitlers’ out of local bullies and waging illegitimate wars and continuously bombing a region for it’s natural resources facilitates organisations like ISIS or Al Qaeda to warp alienated and confused people into committing atrocities.
Anti-War = Pro-ISIS ?? Good one Darryl..
Nah, I prefer to remember staying up all night watching shock & awe rock Baghdad. Nothing special about a bunch of crusties and easily swayed people gathering in one large group.
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