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  (Source: Jim Wilson/The New York Times)

Amid poorer than expected earnings and job cuts, Microsoft is hoping that Windows 7 will be the killer app that it's been desperately missing (box mockup by dimre01).  (Source: Forums)
Q1 2009 for Microsoft was bad, very bad

Microsoft is hoping that the blogosphere buzz around Windows 7 will translate into a hit.  It desperately needs one.  Amid big competitors like Google, Apple, and IBM posting modest growth despite the slowing economy, Microsoft shows serious signs of trouble. 

Windows market share has dipped beneath 90 percent for the first time in years.  Internet Explorer is down into the 60s in world browser market share, falling from the high 80s in 2004.  And Windows Vista, while overall a solid product, has been the blunt of much public apathy, business scorn, and press lashings.  To top it off, it’s facing a fresh round of antitrust charges from the European Union.

Even arguably Microsoft's biggest success -- the Xbox 360 -- despite boasting an excellent attach rate has fallen behind in the console war to the bestselling Nintendo Wii.  And other Microsoft business sectors like its internet offerings, and Zune player have yet to achieve enough of a foothold to become a serious contender for dominant market share.  In short, Microsoft, always a terrific innovator, is arguably without a killer app or product for the first time in years.

This was evidenced in Microsoft's earnings report, just released.  Microsoft announced that its Q2 2009 profit sank from $4.71B USD a year ago to $4.17B USD, a loss of 12 percent.  Total revenue was $16.63B USD, but this was only possible thanks to higher server, tools and entertainment sales.  Client sales revenue, which includes Windows products, fell 8 percent.

Wall Street analysts predicted revenue of $17.08B USD, which Microsoft missed by a fair margin.  Worse, it says more decreases in revenue and earnings are expected to come in the following quarters this year.

Heather Bellini an analyst at UBS AG in New York, comments, "If they don’t have big operating-expense reductions, they are going to get a very bad reaction from shareholders.  I don’t care if they get rid of contractors, full-time employees, facilities, health benefits --just get the costs out."

Indeed, Microsoft announced that it's cutting jobs, as Ms. Bellini and other analysts predicted.  It will be cutting 5,000 employees out of its workforce of 94,286 (with 20,000 to 30,000 contractors).  It will also reduce its operating budget by $1.5B USD, to try to avoid angering its shareholders.  It is declining to give revenue and earnings targets for the remainder of the year saying the market is "too volatile" to estimate these metrics.

Ultimately, Microsoft is still posting big profits -- $4.17B USD in profit is enough to make even some of the biggest companies drool.  It’s also sitting on a big cash pile, though it may have burned through some of it.  So why the concern?

The real problem isn't so much that Microsoft missed a target or that its revenue fell, it’s that Microsoft’s shares in its most important markets, its underlying sources of income, are slipping. 

However, it won't go down without a fight, and with Windows 7 coming later this year, Microsoft may finally have a new hit on its hands.  Meanwhile, it will have to wait and try to come up with new strategies to try to generate bigger sales its existing products.

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A first
By grenableu on 1/22/2009 11:19:47 AM , Rating: 3
Is this MS's first set of layoffs ever?

RE: A first
By FaceMaster on 1/22/09, Rating: 0
RE: A first
By bighairycamel on 1/22/2009 11:42:12 AM , Rating: 3
My sarcasm detection meter just spiked to the roof.

RE: A first
By MrBlastman on 1/22/2009 11:53:22 AM , Rating: 5
Internet Exploder is... Imploding?

I hate to say it but the latest version of Firefox _is_ pretty darned spiffy. I think Windows 7 will breathe some life into the company - everything I've heard so far about it is positive, far more so than Vista looked before it was released.

Like it or not though, Microsoft has turned into a mature company and will face more struggles internally than externally if they can maintain their market share. With Bill leaving (arguably the creative brains behind the company), Steve is going to have his hands full. Trimming the fat a bit seems logical.

Zune has always suprised me - it's a neat device and their online music store was very affordable. Unfortunately though, the army of i-zombies is strong and despite all the ammo in the world, they keep coming.

RE: A first
By Gzus666 on 1/22/2009 11:55:45 AM , Rating: 2
I hate to say it but the latest version of Firefox _is_ pretty darned spiffy.

Why do you hate to say it? Most people like to say when a product is well made and works well.

RE: A first
By on 1/22/09, Rating: -1
RE: A first
By Dove2Three on 1/22/2009 12:29:19 PM , Rating: 3
The problem is its still just a browser. There are plenty better calculator programs out there too, but if you're not working in engineering or something, how many people actually go download a better one?

RE: A first
By Gzus666 on 1/22/2009 12:46:14 PM , Rating: 2
And this has to do with anything I said because? I merely asked why he hates to admit it is a good product.

RE: A first
By MrBlastman on 1/22/2009 12:58:01 PM , Rating: 3
Because saying so, right now, is like kicking them while they are down. ;) Firefox is good, darned good.

RE: A first
By Gzus666 on 1/22/2009 12:59:53 PM , Rating: 2
Firefox is good, darned good.

You will get no arguments from me, but I'm torn cause I like Chrome's interface and speed.

RE: A first
By Shmak on 1/22/09, Rating: 0
RE: A first
By FaceMaster on 1/22/2009 3:29:00 PM , Rating: 1
The problem is its still just a browser. There are plenty better calculator programs out there too, but if you're not working in engineering or something, how many people actually go download a better one?

I've never banged out one to Microsoft Calculator. Or Internet Explorer, for that matter, probably due to Micrososhes lust for money over the experience they provide. Mozilla Firefox, on the other hand, just has something about that name just takes it out of me. Literally!

RE: A first
By JediSmurf on 1/22/2009 11:14:49 PM , Rating: 2
I've been looking for a good calculator program, I'm in engineering, do you actually know any?

RE: A first
By grcunning on 1/23/2009 10:54:31 AM , Rating: 2
I use the calculator that comes with Maple 11.

RE: A first
By The0ne on 1/22/2009 12:33:40 PM , Rating: 2
For employees I believe it is their first. Contractors were the first to go however, especially last year.

Not sure what to think
By JediJeb on 1/22/2009 12:03:38 PM , Rating: 5
Microsoft still made a profit, and actually said their earnings were up 2% from last year(read from the email sent out posted over on HardOCP). No where did they mention they lost money, only that they didn't earn as much as they hoped they would.

Seems in this time we are having with a struggling economy, it would be better for the country, economy(local and global) and individuals to not lay off 5000 people right now. Laying off 5000 people makes their stock holders happy sure, but that also takes money out of the economy, which cascades further down and will in a small way take away money for purchasing their products. I guess it just shows that their only concern is how much money the top people can continue to make. During the Great Depression, my great uncle worked for one of the largest hardware companies in the country, and at that time, to avoid laying off people, they cut all the way back to everyone working 3 days a week to keep everyone employed. This was even the president and management, everyone took the paycuts from top to bottom and the company and all of their employes made it through.

If this country had more leaders and business men like above, we probably wouldn't be in the shape we are in now. We are looking at having the largest budget deficit in history and yet congress takes a pay raise. The economy is tanking and executives continue to blow money on lavish parties while they lay off workers, or take government bailouts to pay for them. The average citizen is asked to tighten out belts and weather out the storm of our economy, and what do we get in reward except to see our efforts laughed at as the ones suggesting it take the money and run.

Im not saying MS is evil, just that they are still in a position to set an example of putting forth an effort to help people even when it might mean a little less profit. I think in the long run that would make them stand out as a business more than this decision.

RE: Not sure what to think
By RamarC on 1/22/09, Rating: -1
RE: Not sure what to think
By Gzus666 on 1/22/2009 2:27:27 PM , Rating: 5
They had a profit of over 4 billion dollars you jackass, they would have to implode to mess that up in that short of a time. Firing people who clearly make your business profitable when you are only making a little less profit but still holding up outstandingly considering the market is a bad idea. Stock holders can't ALWAYS make money, that is not reality. The stock market is a gamble and those people must take the gamble of things going down in low economic times.

RE: Not sure what to think
By RamarC on 1/22/09, Rating: -1
RE: Not sure what to think
By Gzus666 on 1/22/2009 5:09:57 PM , Rating: 2
you don't make changes when the ship is sinking... you make PROACTIVE changes before severe damage is done. and the net headcount reduction over 18 months is only 3,000 or so since they'll be HIRING new people for their refocused efforts.

So they layoff 5000 then hire 2000? That makes sense. The people they had were making them money even when the market is tanking.

if your income is reduced don't you start mowing your own grass and cut down eating out? probably so even though that affects your lawn guy and your local restaurant staff. so what the hell is the difference between microsoft realizing they're bloated in areas and chosing to cut the bloat.

If I went from 4.8 to 4.1 billion? Nah, I think I could handle eating out and paying someone to mow my lawn.

RE: Not sure what to think
By RamarC on 1/22/2009 5:39:42 PM , Rating: 2
so, if your household income dropped 8.5% you wouldn't reduce your spending? most families would as would most companies.

are you equally upset with intel closing 6 obsolete fabs and putting 6,000 folks out of work?
should intel just keep 'em open out of good will?

RE: Not sure what to think
By Gzus666 on 1/22/2009 5:45:57 PM , Rating: 1
so, if your household income dropped 8.5% you wouldn't reduce your spending? most families would as would most companies.

Depends, 8.5% of 4 billion or 8.5% of some other number?

As for Intel, that is not a parallel, as Microsoft is cutting people that actually do something for the company. Closing things you don't use anymore is normal.

RE: Not sure what to think
By RamarC on 1/22/2009 8:28:37 PM , Rating: 2
retooling is normal. do you really want the "creative minds" behind the gates/seinfeld commercials still being paid mega-dollars?

every big corporation has FAT. lee iacocca said every company can afford to trim down by 10% because the fat is inherent. it takes a downturn for the biz to look at itself and realize it stuff it can trim.

when microsoft ditched using SQL Server as the filing system for early versions of Longhorn, it ditched some of the staff devoted to that endeavor. microsoft is not ditching some efforts and refocusing it's work elsewhere. those folks are getting cut also.

and big corporations are owned by big institutional stock holders who react vocally to missed earnings. they want to see the stock indicators stoked and unfortunately trimming employees appeases them. for the current management to stay in control, they have to cater to those vocal stockholders. otherwise they'll get replaced by more 'agressive' management.

it's a sad but true a fact of life for a publicly held businesses. do some research on mitch habib. if his ilk were in control of microsoft, he'd split up the company, outsource practically everything, and cut far more than 6% of the staff.

RE: Not sure what to think
By on 1/23/09, Rating: -1
RE: Not sure what to think
By JediJeb on 1/22/2009 2:51:25 PM , Rating: 2
To me welfare is money for no work. I think if the work is there then keep them on, and the story said nothing about the work drying up, only that there was less money than what they projected in profits.

It's why I titled it Not Sure What to Think, because it seems they are saying screw the people who work for us, we just want to make more and more money no matter what. Maybe it is how the story is written but the tone just seems to make it look like MS is laying off people because they can no longer put millions of dollars into the pockets of a few individuals. If you figure the profit they made of $4.17 billion versus the 5,000 workers they laid off, that would mean that to bring them back to last years profits those people made $834,000 each. I doubt that many of their workers make that kind of salary, so it seems more like gesture to make the banks and investors happy than anything else.

RE: Not sure what to think
By Donkeyshins on 1/22/2009 3:15:39 PM , Rating: 3
We'll be lucky if the recession bottoms out this year. I think (and I'm not alone in this) it may be another 12-18 months before we bottom out.

RE: Not sure what to think
By FITCamaro on 1/22/2009 5:12:24 PM , Rating: 3
Welfare is for people who don't work. These people were working.

RE: Not sure what to think
By Gzus666 on 1/22/2009 5:14:03 PM , Rating: 2
Not only were they working, but clearly doing a damn good job to still pull an impressive profit during a recession.

RE: Not sure what to think
By Bremen7000 on 1/23/2009 6:37:18 PM , Rating: 1
Yes, the company posting a profit indicates that every single employee was doing a "damn good job" and it's unfathomable that 5% of their workforce (targeting only non-engineers with the cuts, mind you) was not pulling their weight. Sheesh.

RE: Not sure what to think
By FITCamaro on 1/22/2009 5:12:40 PM , Rating: 2
Agree completely.

RE: Not sure what to think
By Regs on 1/22/2009 6:18:54 PM , Rating: 2
Unfortunately that is the cold truth of publicly owned corporations. CEO's have to answer to the board, and the board have to answer to the stock owners. If the owners pull out, there will no just bet 5,000 without jobs, though there will be tens of thousands without jobs. You cannot stay stagnant as a corporation. Profit is one thing, but growth is what corporations are more concerned about. Without growth, employees will get less benefits or raises to counter inflation or costs of living. Consequently employees will get less productive or pack up and leave; stock holders will sell off their stock to the highest bidder. The company then begin to literally bleed assets at a uncontrollable rate.

I know times are tough and there are not a lot of choices for people. Though when I got laid off once, it actually forced me to look for a better opportunity. A lot of people face this grueling task, but it's their resilience that pays off in the long run. Small businesses are a great opportunity for a lot of people leaving larger corporations. They get enthralled into an environment where you're subjected to skills, tasks, and goals a lot more broader than the specialized and focused jobs in public owned corporations. Not to mention private owned businesses have a lot of growth potential and sometimes less competition.

By Gzus666 on 1/22/2009 11:14:05 AM , Rating: 2
I don't know why, but these pictures of him make me want to call him Balmertron9000.

RE: Hmm.
By JasonMick on 1/22/2009 11:19:05 AM , Rating: 4
Well people can say all the bad things about Ballmer you want (and if they involve chair throwing, they're probably true), but one thing you have to give him credit for I guess is being an entertaining speaker.

Plenty of speakers at CES were a bit of a snooze, but even a slightly sedate Ballmer was hilarious and had the crowd into his whole presentation. The man may be insane, but at least he can speak, which is one redeeming quality, especially important for a CEO.

My favorite line of his CES routine was:
"Since this is my first CES a lot of people sent me email message. Bill Gates said, 'Be sure you're at CES and not that OTHER meeting.' And here's one from Jerry Yang... he wants to know why I'm not answering his Facebook friend requests."

RE: Hmm.
By Gzus666 on 1/22/2009 11:22:17 AM , Rating: 3
Yet Balmertron9000 is the only thing that still comes to mind. He needs a flamethrower and maybe some wheels. A saw arm would be pretty sweet too, maybe a laser somewhere. If we could gold plate him, that would be pretty cool too.

RE: Hmm.
By Cuddlez on 1/22/2009 9:46:42 PM , Rating: 2
Maybe something like... this:

That's about the best I can do. Sorry, no gold plating or lasers.

My apologies to strongbad for stealing his song.

RE: Hmm.
By Gzus666 on 1/23/2009 9:44:44 AM , Rating: 2
Impressive sir, I give it 3.5 stars. Maybe change the wheel to just tank treads, so cut off his lower half and replace it, then I think awesome would ensue.

RE: Hmm.
By MrBlastman on 1/22/2009 11:55:07 AM , Rating: 2
Entertaining speaker yes, and - don't forget, the brilliance behind their marketing efforts for the last 20 years. I always viewed Bill as the brains behind the technology and Ballmer as the six-shooting marketing cowboy. I think the company has just grown so large they have gotten too complacent and aren't as ravenous or hungry as they were a few years ago.

RE: Hmm.
By mondo1234 on 1/22/2009 3:28:47 PM , Rating: 3
Rodney Dangerfield and Sam Kinison were entertaining.
But I wouldn't have them run a company either, it doesn't pay the bills. MS had better hang on to the cash. They might need it. Mac and Linux fanboys are (probably) ready to pounce, especially with apple selling 22 mil ipods and over 4 mil iphones in three months.

Maybe next quarter will catch up with them.
And I wish the best for SJ.

Bad advice is free all day
By peldor on 1/22/2009 11:51:55 AM , Rating: 2
I don’t care if they get rid of contractors, full-time employees, facilities, health benefits --just get the costs out."

Who cares what the business needs? Just slash and burn until the next quarterly numbers are better!

RE: Bad advice is free all day
By FITCamaro on 1/22/2009 11:55:39 AM , Rating: 5
I really hate it when companies slash jobs because they didn't hit their forecasted profit. I mean they made $4.17 BILLION dollars. That wasn't revenue, that was profit. And they're basically complaining that that isn't enough so they need to cut jobs. I mean the economy sucks right now and you're making that kind of money? You're doing pretty damn good.

How does an economy recover when there's no one with a decent paying job to buy anything. Regardless of what liberals say, Welfare recipients and minimum wage earners don't drive the economy.

RE: Bad advice is free all day
By mholler on 1/22/2009 1:20:29 PM , Rating: 2
Well, that's part of the package for publicly traded companies who are expected to hit certain goals for their investors. It's one of the reason we've seen a rash of public companies going private in recent years. When your stock price is dependent on hitting analyst expectations, it's pretty much a no-brainer that heads will roll if you don't.

RE: Bad advice is free all day
By juserbogus on 1/22/2009 1:49:04 PM , Rating: 3
who are you and what did you do with FITCamaro?

RE: Bad advice is free all day
By PrinceGaz on 1/22/2009 9:52:37 PM , Rating: 2
I think he said it is better for a profitable company like Microsoft still is, to continue employing workers to help it make better products, than for them to end up unemployed just because the company's profit figures weren't as high as hoped for. Which is entirely correct.

So long as it is affordable, companies should not lay off staff as they are compromising their future once the market recovers. That's why most big car-manufacturers have decided to minimise job-losses by having temporary (two to four month) factory closures on reduced pay, and/or a reduced working week. It's better to keep skilled people employed when there is likely to be an upturn in a year or so, as the costs of bringing in equally qualified workers when the economy rebounds would be much higher than retaining them now.

Some redundancies are sometimes necessary, like a local car plant which is laying off around a thousand workers (roughly 20% of the total), alongside a four month shutdown of building new cars, but the fact they are holding on to 80% of the work-force and paying them over this down-time shows they have faith in their work-force. It's a Japanese company by the way, with plenty of money in the bank (as they actually produced efficient cars people wanted, until people stopped buying new cars).

RE: Bad advice is free all day
By oab on 1/22/2009 11:42:23 PM , Rating: 2
Unless as part of Microsoft seeing that it was not meeting profit expectations, is cutting projects that were net losses in an effort to return to expected profitability.

Shareholders (large shareholders) want companies to meet profit expectations, and as such would put pressure to cut projects that do not generate profit, that will not generate profit in the foreseeable future, or are not "loss leaders" that generate social responsibility goodwill amongst potential customers.

It is better to keep skilled employees there, but if they do not have skills that are transferable to other divisions within the company, why should they stay on the payroll? MS is not social security.

By icanhascpu on 1/22/2009 2:17:01 PM , Rating: 2
Is it just me or has like 20 companies has 5-6k layoffs in the past week?

RE: Layoffs
By Gzus666 on 1/22/2009 2:19:40 PM , Rating: 3
But remember, it isn't a recession, it is an "economic downturn", everything is OK, go back to sleep.

RE: Layoffs
By Oregonian2 on 1/22/2009 11:35:08 PM , Rating: 3
Except that the downturn axe hit me in November.

RE: Layoffs
By codeThug on 1/22/2009 2:24:10 PM , Rating: 2
...beans and bullets man. And it's going to get worse.

RE: Layoffs
By FITCamaro on 1/22/2009 5:14:45 PM , Rating: 2
Going to buy some bullets this weekend if they're not sold out.

RE: Layoffs
By Gzus666 on 1/22/2009 5:18:49 PM , Rating: 2
Might be a good time. Still waiting for my new rifle, seems the backup was pretty hefty...

RE: Layoffs
By FITCamaro on 1/22/2009 9:38:26 PM , Rating: 2
Hey crimes only going to go up. And doesn't hurt to be prepared.

By rtwerk222 on 1/22/2009 2:49:59 PM , Rating: 2
"In short, Microsoft, always a terrific innovator"

You MUST be kidding. Microsoft has NEVER been an innovator. Windows 3.1 was a poor copy of the first Macintosh GUI, Windows 98 ME and XP have always been trying to catch up with the Mac OS. Vista tried to be a clone of OSX. They tried to copy the iPOD, they tried to copy iTunes.

RE: Innovator?
By Gzus666 on 1/22/2009 3:00:32 PM , Rating: 2
On this note, does anyone find it odd that KDE was originally made to mimic the Windows GUI and now with Windows 7 their GUI looks like KDE 4.X? Very weird.

RE: Innovator?
By noirsoft on 1/22/2009 10:22:19 PM , Rating: 2

You are an idiot.

MacOS and Windows were both clones of X-Windows. Win95 was light-years ahead of MacOS in terms of GUI and kernel technology. It had real virtual memory and multitasking, which Apple didn't get until OSX. OSX was a needed effort to save a dying company with an OS at least 6 years out of date. XP was better than OSX, Vista is better than XP, and Win7 is better still.

People credit Apple with all this innovation, while they have done concretely LESS innovation than MS or any other large company. They just have a marketing department and legions of braindead fools like you who believe that they innovate.

Case in point: I read a news article about entrepeneurs recently, and there was a quote from Guy Kawasaki (ex-Apple exec) about Jobs. He said something along the lines of "And then one day Steve thought, 'why not have a device to store all your digital music in your pocket?' and thus the iPod was born" -- He completely ignores the fact that portable media players had existed for _years_ before the iPod, and that Apple even tried to get Creative Labs to build the original models. There was nothing new about the iPod, or iTunes. However, people (like you) seem to think that Apple invented the digital music player. Plese open your brain and learn something. Apple's commercials do not contain any actual facts.


RE: Innovator?
By oab on 1/22/2009 11:55:28 PM , Rating: 2
The iPod was new because the UI menus were very sleek, the control scheme was unheard of, it used Firewire instead of USB 1.0, could hold gigabytes of music on a player the size of a deck of cards (other HDD players were the size of a diskman).

Windows 95 was better than MacOS 8/9. Windows was better until about the time that Apple released OS 10.2, with 10.3 Apple pulled ahead, and 10.4 blew XP away on the *CONSUMER* market side. XP still ruled the corporate roost.

I would hold off of praise over Win7 so far, after all, it is not even out yet, but the indications look good for it to be better than Vista (which was better than XP, but not at the price they were charging for it).

RE: Innovator?
By noirsoft on 1/23/2009 10:03:09 AM , Rating: 2
No, no and no.

The iPod's menu system was the same as on existing players with screens.

The control system (the wheel) may have been "new" but it is still the weakest control sceheme out there in many people's opinion, and the iPod would have done just as well with a proper control system.

The size of the iPod had nothing to do with Firewire. It was the conscious choice of Apple to make it that size, requiring the use of much more expensive smaller hard drive units than competitors. The HD is the main size factor in a player, not the computer interface.

The fact that other HD-based players were the size of a discman is due to a conscious choice of those manufacturers to make a player in a shape and size similar to what people expected of a music player.

Flash-based players had been out with sizes much smaller than the iPod for years. I had a Sony player that was the size of a large ballpoint pen. The deal-breaker of that product was Sony's insistence on playing only protected ATRAC files, meaning I could not even easily copy my CDs to it, since I had to use their software, and "check out" my music to the player, and "check in" the music in order to play it on the PC. I quickly switched to other products (but never an Apple) that gave me a better experience.

Your second paragraph is opinions, so I will not reply except to say that I disagree. I find XP to be preferable to using OSX of any flavor.

Lastly, what does the price of Vista have to do with anything? Most people get their operating system as part of the computer, so the cost of Vista for most people was effectively nothing. Besides, the pricing was about the same as it always had been. It always cost about $100 to upgrade a home OS, and double that for a business OS. The only new price point was Ultimate, which offered the features of both the home and business OS versions in the same product, which had not been done before.

RE: Innovator?
By oab on 1/23/2009 3:28:05 PM , Rating: 2
Flash based players held ~64mb-128mb of MP3 files. HDD players held ~4-6gb.

HDD players of the time used 2.5" drives, the iPod used 1.8" drives, allowing it to be smaller, and use less battery power.

I did not say firewire made it the size of a deck of cards, I said it used firewire instead of USB 1.0, which was absurdly slow (minutes vs. hours transferring GBs of songs).

Other players had similar UIs (Creative Nomad Jukebox for instance), but Apple perfected it (at the time it came out), others had horrible ones (all of Sonys products for instance).

The other players at the time were littered with up to a dozen clicky buttons, the iPod had none of those. It had 5, four around the perimeter, and the centre of the wheel. The wheel and buttons were designed to look like a speaker.

The wheel as a hardware control device is NOT intuitive, it is distinctly hostile to the new user unfamiliar with it (especially if they were used to other players). However, the wheel is user-friendly. Let me explain, once you know how to use it, it is a brilliant way of controlling of the player, until you do it is horrible. Other players had jog-dials, which are fantastic and work very well. Apple simply put the jog dial on the front of the player instead of the side.

Apple did not even invent the first iPods hardware guts, they purchased it (from PortalPlayer) and modified the reference design. Apple supplied the wheel and the cascading menu system.

The iPod was a mac-only product for the first two generations, it only got windows support with the 3G model. And the 3G model was superior to the comparable Creative product (sound quality was better in the reviews, the creative products are now even/superior to the iPod in this particular department), I have print reviews to show this btw.

The price matters because the upgrade edition of Windows Vista Home Premium was $160 at launch. Yes, many people got it free with the purchase of a new computer, but $160 was a lot to shell out for a product with so little perceived extra value. It had DX10, IE7, security enhancements and the hated UAC. Plus it ran slower than XP on identical hardware (as every MS OS release has done), plus it was nigh-on impossible to run it on the 512mb of ram it required as a minimum.

OS X 10.4 cost $129 so comparable, but it had many more "flashy" features that you could see. New UI! Spotlight! Dashboard! New Safari! Over 200 new features! Things that you could "feel". So, despite being roughly the same price, the perceived value was greater.

Now, I don't own a mac. I've never owned a mac. My main computer is running Vista (with UAC enabled), I am perfectly happy with it, but I got my copy for free (legit free from Intel), but if I had paid $160, I would have felt somewhat ripped off. Especially if I had purchased the Ultimate Edition for $230+.

RE: Innovator?
By oab on 1/23/2009 12:05:45 AM , Rating: 2
You're forgetting Office, Internet Explorer, Windows 95, Visual Studio, to name a few.

IE4 was light-years ahead of Netscape, Office was superior to the Corel and Lotus products. Windows 95 beat Mac OS7/8 at just about everything, and Visual Studio was a stunningly good development product considering what else was available at the time.

Their innovation has stagnated once they have achieved market dominance however (IE6 and Windows XP for instance).

They never really did try and copy iTunes, Windows Media Player and iTunes are quite different products. iTunes is mainly an audio library program which had video stuck into it, WMP was a media player that had library functions added. Different products.

Any word on Office 2007 successor?
By Lord 666 on 1/22/2009 7:49:38 PM , Rating: 2
While there is much debate about Vista, the Office suite has always been a success for Microsoft.

Usually, they time the Windows and Office releases together, but haven't heard anything about Office 20xx.

In my opinion, the lack of Office suite update leads me to believe Windows 7 is just a service pack away from Vista and just an attempt to release Mojave ASAP.

RE: Any word on Office 2007 successor?
By oab on 1/22/2009 11:28:43 PM , Rating: 2
Mojave was Vista.

Windows 7 is primarily a GUI update to windows, coupled with a significant improvement in efficiency of the background processes.

As a result of the removal of the "bloat" that Vista had, Windows 7 starts faster, and on a task-by-task basis will perform at the same or faster speed than Vista would.

The kernel itself is relatively unchanged (save for efficiency improvements), and had fewer new features than Vista did. I think the UAC got some further popup alert reductions too.

RE: Any word on Office 2007 successor?
By Lord 666 on 1/23/2009 8:03:00 AM , Rating: 2

While that review is on the M3 version of Windows 7, it supports it is essentially the same software as Vista.

The "Mojave" marketing/user acceptance test was to gauge how people reacted to a different name to the same software. I use that name sarcastically because during the tests, Mojave was introduced as the next version of Windows. Now that Mojave, I mean Windows 7 is here, its getting glowing reviews.

From my personal experience, the reduced memory utilization is appreciated along with the shorter installation times. However, both of these could have been achieved just by Service Pack 2 for Vista. However, without a name change, the negative impression of Vista would still remain to the public. In hindsight, Vista will be remembered as another Windows Me unfairly or not due to the short shelf life.

Windows 7 it is then... Keep moving forward!

By noirsoft on 1/23/2009 9:51:28 AM , Rating: 3
From my personal experience, the reduced memory utilization is appreciated

Except that 7 doesn't use less memory. What it does is tell you that it is using less memory by not including the memory that is used by the caching system. Arguably, the 7 method is a more honest assessment of the amount of memory available to run programs (since the cache is there to speed up launched by using otherwise unused memory) but the actual memory usage between the two is similar.

Unless you mean on the low end. I do hear that 7 has better performance on min spec machines, but since all my machines have at least 1.5 (and more commonly 2) GB of RAM, I haven't tested that.

By dj LiTh on 1/22/2009 11:31:46 AM , Rating: 5
Hopefully all the layoffs come from Microsofts european operations, since europe is so keen on punishing them for no reason whatsoever.

By cscpianoman on 1/22/2009 1:58:38 PM , Rating: 2
I'm all for trimming the fat and increasing efficiency, but all things considered why the layoffs? Microsoft went from profits of almost 4.8B to 4.1B. That's profits! Not losses.

<sarcasm>OMG, I can't imagine having profits decrease in such hard economic times such as these. </sarcasm>

<Warning: Soap Box Rant - You have been warned:P>
One of my pet peeves are businesses catering only to shareholders and not increasing the longevity and stability of the business. In other words, they are more interested in maintaining profits at the expense of making good business decisions. Case in point and true story, a uniform company kept promoting managers because of great success with the promotions contingent on profits from manager's work/plant. The real reason behind the success stemmed from huge growth/demand. Several of the industrial machines needed replacing and they need new ones, but doing so would cut into profits and thus negate the chance for a promotion. The consequences of poor business decisions cost the company more than just inefficiency. The company stagnated for a time and had to scramble to put things back in order causing several years of losses/small profits. Purchasing the machine would have increased the stability of the company and probably would have increased profits more down the line. But some can't see the end from the beginning.

RE: Wierd...
By Steve1981 on 1/22/2009 5:16:17 PM , Rating: 2
I would note that it doesn't cater to shareholders to go for a short term gain/long term loss, unless the shareholders are short sighted idiots, or mostly fly-by-night types out to make a quick buck. I wouldn't apply either label to the company's major shareholders.

More Mick alarmism
By Reclaimer77 on 1/22/2009 4:13:30 PM , Rating: 2
Microsoft is hoping that the blogosphere buzz around Windows 7 will translate into a hit. It desperately needs one. Amid big competitors like Google, Apple, and IBM posting modest growth despite the slowing economy, Microsoft shows serious signs of trouble.

So based on a 12% loss in Quarter ONE, the largest and most profitable software giant on the planet, with more money and assets than god, is "desperate" and in "serious trouble" ???

Mick you should work for CNN or MSNBC. Honestly your talent for blowing things out of proportion and slanting viewpoints is wasted here at Daily Tech.

RE: More Mick alarmism
By DrKlahn on 1/22/2009 5:37:52 PM , Rating: 2
I agree.

Microsoft shows serious signs of trouble.

Did they slowly losing market share in 2008? Yes. In serious trouble? No, the figures in this article don't show that to me. Vista has had such bad press and Microsoft has not released a new browser for some time so some consumers went elsewhere. Hardly shocking. Serious trouble would be large losses in market share (Windows lost 3.1% in '08, Apple gained 2.3%) and serious losses in revenue. Not single digit losses and turning a profit in recession. Obviously Microsoft doesn't want any slide in marketshare to continue and also wants to avoid cutting anymore employees. So Ballmer and Co. will have to start attracting people back into the fold.

I've been in IT for 15 years and I have seen article after article about how Microsoft is on it's deathbed. I have yet to see any real signs of its impending demise.

Missed the Ball..
By just4U on 1/23/2009 3:45:03 AM , Rating: 2
Maybe some bigwig from MS will read this .. (shrug) They have a oportunity here to lead in trying times. To be looked upon favorably just before they are about to launch their new OS.

Few are going to see a company that earns the amounts in profit they do favorably after cutting their workforce. They should perhaps be looking at slightly lowered wages as a way to keep on as much as they can... not slashing jobs. This could create more of a goodwill feel to the company.

Can either do like everyone else or step up and show that you care a bit more.. Prime oportunity Microsft that could land up netting you more customers in the long run. Your call.

watch for it...
By MadMan007 on 1/23/2009 10:59:42 AM , Rating: 2
When the recession starts to turn around and businesses start to get new PCs or switch to Win7 MS is going to go gangbusters. Poor Vista adoption by businesses is what's been hurting MS. Depending upon the timing of events, Win7 release and economic turnaround, it could be a double-shot for MS.

By crystal clear on 1/24/2009 4:16:43 AM , Rating: 2
Senator asks Microsoft about job cuts, visas

WASHINGTON (Reuters) - A U.S. senator has asked Microsoft Corp about its plans to slash up to 5,000 jobs, urging the world's biggest software company to preserve the jobs of Americans ahead of foreigners working on visas.

"I am concerned that Microsoft will be retaining foreign guest workers rather than similarly qualified American employees when it implements its layoff plan," Sen. Charles Grassley, an Iowa Republican, said in a January 22 letter.

The company has been a champion of expanding the H-1B visa program, a temporary visa program that lets American companies and universities hire foreign workers in a category considered by the government to be a "specialty occupation."

Microsoft said late Friday that some of the people who lose their jobs would likely be non-Americans.

"We care about all our employees, so we are providing services and support to try to help every affected worker, whether they are U.S. workers or foreign nationals working in this country on a visa," a Microsoft spokesperson said in an e-mail statement.

Microsoft employs thousands of workers through the visa program, according to Grassley, the top Republican on the Senate Finance Committee.

The letter asked Microsoft Chief Executive Steve Ballmer to provide a breakdown of the jobs to be eliminated, and how many of those are individuals with H-1B visas and how many are Americans. Grassley also wants to know what the breakdown will be when the layoffs are complete.

"Microsoft has a moral obligation to protect these American workers by putting them first during these difficult economic times,"

Grassley said in the letter, copies of which were provided by his office on Friday.

By the way: no comment from DT on Apple's earnings?
By Pirks on 1/22/09, Rating: -1
By Pirks on 1/22/2009 3:27:43 PM , Rating: 2
Never mind, it seems DT published something about Apple's earnings, it's just got unusually convoluted title for such a post.

By DrKlahn on 1/22/2009 5:53:00 PM , Rating: 2
So Apple earning a record profit of $1.61B and Microsoft only earning $4.17B is supposed to show the MS Zombies what exactly? That Microsoft is still 2.6 times more profitable?

Get some maturity. Both of these are companies not religions. I've used products from both companies and am happy to see Microsoft getting some competition from Apple to help both companies offer better products at lower prices.

By Pirks on 1/22/2009 7:11:48 PM , Rating: 2
Apple earning a record profit of $1.61B and Microsoft only earning $4.17B is supposed to show the MS Zombies what exactly? That Microsoft is still 2.6 times more profitable?
No, it is supposed to show MS zombies that MS is shrinking while Apple is growing.

Windows 7
By Aloonatic on 1/22/09, Rating: -1
RE: Windows 7
By TomZ on 1/22/2009 11:59:12 AM , Rating: 2
There have been some internal memos leaked, but AFAIK, there have not been any public announcements about upgrade programs yet. You're just asking the question too early, that's all.

RE: Windows 7
By Lord 666 on 1/22/2009 7:41:47 PM , Rating: 2
Still hoping that Microsoft will release Service Pack 2 for Vista that will bring it to at least 90 percent of Windows 7.

Or at the very least a reduced cost upgrade for legit Vista CoA holders.

I know of many businesses now holding back on volume licensing and computer purchases hoping Windows 7 launches in 2009.

RE: Windows 7
By oab on 1/22/2009 11:47:17 PM , Rating: 2
SP2 will be released, and is targeted for release ahead of Windows 7's release.

It will be more Vista SP1 than XP SP2 in terms of changes.

There will be a reduced cost for upgrading Vista. It is called "Windows 7 <version> Upgraded Edition", which can be used to upgrade Windows Vista (not XP) to the Windows 7 version of your choice.

RE: Windows 7
By The0ne on 1/22/2009 12:36:24 PM , Rating: 2
And sometimes companies are in contract not to leaked information too early to customers. As a partner you do receive earlier forecast, release dates, etc. For example, as an Intel partner at one of my previous jobs we were provided release dates for CPUs until next year, including EOL dates. Of course dates could change but mostly they're intact :)

RE: Windows 7
By WackyDan on 1/22/2009 3:40:59 PM , Rating: 1
There will be a free upgrade offer for Win7 for systems that shipped with Vista before Windows 7's release.

However.... That date isn't set in stone yet, and it is a date that is in the future... probably within 2-3 month of the release of 7. So the laptop you just bought wouldn't qualify. So... buy your next machine two to three months before 7's release and you might get a free upgrade to 7....Or just wait and buy a machine that shipped with 7 - seems easier.

RE: Windows 7
By sliderule on 1/22/2009 10:10:00 PM , Rating: 2
I hope this doesn't delay Windows Mojave.

"Well, there may be a reason why they call them 'Mac' trucks! Windows machines will not be trucks." -- Microsoft CEO Steve Ballmer

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