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To: JakeStraw who wrote (74296)	5/2/2006 8:11:18 PM
From: jonkai	of 74647

----So, what's the future for the stock now?------ the future is you are not going to get rich owning it... that is for sure... at MSFT it appears, the money that comes in, is strictly off limits to the shareholders... they've found a new way to spend money on themselves.. and by golly, no one is going to stop them.... don't blame them, blame the poor saps who own the stock and haven't said a peep about the $45 to $50 billion MSFT spent over the last few years paying employees their stock options (through buying those shares back)... or the $10's of billions going to "research" which is the new davinci code for paying themselves even more money.... where the "research" turns out to be... well,.... you've got me, what have they produced new that you as a shareholder benefited from? jon.

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From: Don Green	5/3/2006 2:49:09 PM
	of 74647

Microsoft's AdCenter May Fail to Topple Google From Dominance May 3 (Bloomberg) -- Microsoft Corp.'s new Web advertising software, three years in the making, may fail to crack Google Inc.'s dominance of the Internet ad market. The AdCenter software will be demonstrated at meetings this week at Microsoft's headquarters in Redmond, Washington. While five advertisers who have tested the product said the program gives them features that Google lacks, they said they won't increase their spending on Microsoft's MSN search engine because it doesn't draw enough customers. ``It's the volume on MSN today that's the problem,'' said Mike Gullaksen, 27, senior vice president of search at ICrossing Inc., an ad agency in Scottsdale, Arizona. He said Google gets 65 percent of his money to Microsoft's 5 percent. ``It comes down to getting in front of the most people.'' The reluctance of advertisers to use MSN shows that the challenge for Microsoft, the world's biggest software maker, is bigger than just developing superior programs. The number of Web searches run on Google outnumbers MSN's almost 5-to-1 in the U.S., making it hard for Microsoft to make inroads in Internet search advertising. Google, the most-used search engine, introduced its AdWords program, which lets advertisers buy links next to search results, in October 2000. Microsoft's addition of features to its program won't make up the gap, advertisers said. ``They have to find a way to increase search traffic,'' said Matt Rosoff, an analyst at Kirkland, Washington-based Directions on Microsoft. ``You'll have to look a year from now to see if they made any progress.'' Courting Customers Chief Executive Officer Steve Ballmer, 50, is courting ad agencies including Seattle's Avenue A Razorfish, saying those customers are as important as developers who create software for the Microsoft's Windows operating system. Once, ``I'd say developers, developers, developers, developers, but not any more, baby; it's advertisers, advertisers, advertisers,'' Ballmer said at an Avenue A client meeting in March in Florida, while running around the stage and punching the air. Ballmer last week bragged about a plan to increase spending to make MSN into an Internet powerhouse to rival Google. Goldman, Sachs & Co.'s Rick Sherlund put the extra spending at almost $2 billion, with most of it earmarked for MSN. The price tag surprised investors, sending the shares tumbling 11 percent on April 28 and erasing the stock's best start to a year since 2001. The shares are down 8.2 percent this year and fell 28 cents to $24.01 yesterday in Nasdaq Stock Market composite trading. Surging Market AdCenter targets the links that run next to search results, which will grow 30 percent into a $6.9 billion market in the U.S. this year, according to Merrill Lynch & Co. In tests, advertisers praised the Microsoft program for allowing them to target Internet search users of a certain age, gender and income. Google doesn't do that, letting advertisers pick only specific areas of the country. ``If you knew that a 16-year-old boy was looking at high-end Porsches, that's very different than if it was a 45-year-old male,'' said Ellen Siminoff, 38, CEO of Efficient Frontier Inc., a Mountain View, California-based search advertising agency that manages $200 million of spending for clients. Advertisers also expect improvements at MSN to help them win better prices if there are more alternatives to Google, said Misty Locke, president of Range Online, an advertising agency in Fort Worth, Texas. Known as Moonshot The software, code-named Moonshot, has 7,000 customers and is used to sell 70 percent of MSN search ads, said Doug Stotland, a Microsoft group product manager. AdCenter is accessible only to test clients and will be fully available by the end of June. Tarek Najm, the engineer leading the AdCenter project, had quadrupled his staff to about 220 as of February. Microsoft's job Web site has 86 open positions in AdCenter. Microsoft has better features than Google for helping advertisers design their campaigns to attract certain customers and for tracking who responds to the ads, Najm said. ``Good luck to Google if they want to try to match that,'' he said in a February interview. ``Let them build it. It's a lot of work, a lot of research and a lot of algorithms.'' Google said its advertisers can show ads on specific Web sites, such as cycling sites for bike ads, giving them the opportunity to target certain groups of users. Features for targeting ads and reporting data give advertisers the greatest return, Google spokesman Michael Mayzel said. In the past five years, Google's ad program has evolved with a focus on ads' quality and relevance ``while continuing to respect the user,'' Mayzel wrote in an e-mailed statement. Low Volume Ballmer still lacks enough Web users to entice advertisers. Mountain View, California-based Google handled 49 percent of U.S. searches in March, compared with Microsoft's 11 percent, said researcher Nielsen//NetRatings. Yahoo! Inc. had 23 percent. ``My only concern is we'd like there to be more volume,'' said Siminoff, whose company also tested AdCenter. ``It's a less competitive marketplace.'' Most companies put 70 percent of their budgets into Google, with 20 percent in Yahoo and 10 percent into MSN, said George Kepnick, co-founder of search ad agency Dottedonline.com. ``You're going to get the bulk of your traffic from Google,'' he said. Ballmer said in a March interview that it would take Microsoft a while to match Google's extensive network of buyers and sellers. MSN's advertising sales rose 7 percent in the quarter ended in March, compared with a 79 percent rise at Google and 35 percent gain at Sunnyvale, California-based Yahoo. Syta Saephan, 28, who runs PodsPlus.com, hasn't tested AdCenter. He says setting up new campaigns on Microsoft may not be worth the effort for his Davis, California-based company, which sells accessories for Apple Computer Inc.'s iPod music player. ``If Microsoft has such a small audience, it may not be worth the time and effort to even set up,'' said Saephan, who buys about $15,000 a month of Internet search ads. ``Google will probably continue to make up most of our budgets.'' To contact the reporters on this story: Jonathan Thaw in San Francisco at jthaw@bloomberg.net; Dina Bass in Seattle at dbass2@bloomberg.net. Last Updated: May 3, 2006 00:08 EDT

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From: Don Green	5/3/2006 2:52:04 PM
	of 74647

Don't Expect Vista Until 2Q 2007, Gartner Says Walaika K. Haskins, newsfactor.com Everybody will have to wait until at least May or June of 2007 for the release of Microsoft's new operating system, Windows Vista, according to a report from research firm Gartner. That report pegs the release of Vista at several months later than Microsoft's latest estimate indicates. In the research note released Tuesday, the analysts pointed to Microsoft's habit of missing target dates for major operating system releases. "History abounds with examples of Microsoft missing deadlines on major versions of Windows," Gartner wrote. "Microsoft has been much more consistent with minor releases, hitting Windows 98 Second Edition, Windows ME, and Windows XP largely on time," the analysts indicated. "In sum, one should never overestimate how much Microsoft will underestimate the complexity and time needed to deliver a major new client OS." Beta Time According to Gartner, Vista will not be available for the general public and shipped on new computers until nine to 12 months after Microsoft releases the Beta 2 version, which is expected to ship this summer. The second beta will serve several functions. Within Microsoft, it signals that the company has attained "a certain level of quality." Outside the company, it involves opening the OS to a broader test audience -- as many as two million users -- who will put the system through the paces. Microsoft's revised Vista schedule only allows for about five months between Beta 2 and the start of manufacturing. The Gartner analysts contend that more time is required between the two stages if the software giant is to accommodate the issues expected to emerge during broad testing and to allow for final testing before the software goes into production. "It took 16 months from the time Microsoft shipped Windows 2000 Beta 2 in August 1998 until it was released to manufacturing in December of 1999," the analysts pointed out. "Once Microsoft announced that Windows Vista would miss the holiday season, the urgency to ship on schedule after the holidays was reduced." Denial Time The Gartner report also noted that Microsoft's development branch "firmly believes" the scheduled Vista release will make its October or November 2006 deadline in time for it to ship to businesses in late 2006 and for original equipment manufacturers to ship it on new PCs in January 2007. "The development team sincerely believes this," the analysts noted. "However, development also believed it could do it in time for 2006 holiday availability, and that did not materialize." For its part, Microsoft said that work on Vista remains on schedule. "We respectfully disagree with Gartner's views around timing of the final delivery of Windows Vista," said a Microsoft spokesperson. "We remain on track to deliver Windows Vista Beta 2 in the second quarter and to deliver the final product to volume license customers in November 2006 and to other businesses and consumers in January 2007." Gartner recommended that businesses "adopt a managed diversity," bringing in new PCs when needed and not waiting for the release of Vista. "Don't tie your future too closely to Microsoft's expected release dates for Windows," the analysts concluded. "Microsoft cannot accurately predict them more than a few months out, and organizations that are too reliant on Microsoft making shipment dates are leaving themselves open to excessive risk."

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From: Don Green	5/3/2006 4:24:03 PM
	of 74647

Microsoft and Google Set to Wage Arms Race Bill Gates, the chairman of Microsoft, described Google in an interview late last year as a worthy adversary, a company to test Microsoft's mettle. "This is hypercompetition, make no mistake," Mr. Gates observed. The rivalry between the companies is growing more combative, and with good reason: the outcome is likely to shape the future of competition in computing and the way people use information technology. A measure of how seriously Microsoft takes the challenge came last Thursday when it announced that its spending would rise sharply next year, about $2 billion higher than previous estimates. Much of the extra money, analysts say, is going to meet the threat from companies offering advertising-supported Internet services and software, led by Google. "Microsoft doesn't have to kill Google, but it has to narrow the gap," said Richard Sherlund, an analyst at Goldman Sachs & Company. "It has to be in the same ZIP code." To succeed, Microsoft has to make strong inroads into Internet services and software, where Google is a leader. "It's clear that if we fail to do so, our business as we know it is at risk," Ray Ozzie, a chief technical officer, warned in an e-mail memo to Microsoft employees last year. Microsoft enters that battle from a stronghold: its lucrative, powerful business in personal computer software. Google has asserted that Microsoft's next Web browser typically steers users to Microsoft's search service, limiting consumer choice and potentially hurting Google, the leading Internet search engine. Microsoft says Google's objections are mistaken, and that its new browser, Internet Explorer 7, increases a user's search options. But Google has advantages of its own, and the Internet services business is very different from the desktop software industry. The Internet model is one that offers search, e-mail, calendar, contacts and even word processing as services accessible remotely with a PC or hand-held device with a Web browser. Typically, Google invents a new service or feature, makes it a free Web-based service, and only later figures out how to make money on it from advertising of some kind. That ad-supported software, distributed as a Web service, is a threat to Microsoft's model of selling licensed desktop software, at least in the consumer market. Corporations have so far shown less interest in ad-supported software as an Internet service. To smaller software companies, Google's strategy appears to have the same competitive impact as Microsoft's tried-and-true practice of bundling more software programs and features into its Windows operating system. Danny Sullivan, editor of Search Engine Watch, a Web newsletter, said that in some niches of the software business, Google is casting the same sort of shadow over Silicon Valley that Microsoft once did. "You've got people who don't even feel they can launch a product for fear that Google will get in," Mr. Sullivan said. Google, he said, has acquired companies and then made their products free, roiling the markets in which they compete. Google has introduced free versions of the graphics software made by SketchUp and of the Internet analytics service from Urchin, two companies that it bought. And Google won a bid to offer wireless Internet service in San Francisco at no charge, hoping to make money by selling local advertising. If this model proves to be successful, it could cut into the business of other Internet providers and wireless phone companies. Now Google is starting to move directly into Microsoft's core market. It recently acquired Writely, a Web-based word processor. How far Google can eat into Microsoft's software franchise is uncertain. But Microsoft fears that Google could become a kind of operating system of the Internet in the same way that Windows is the dominant operating system of personal computing. For its part, Google wants to avoid becoming the "next Netscape," a reference to the early leader in the browser market that Microsoft eventually thwarted. "A lot of the people who are at the center of Google had done hand-to-hand combat with Microsoft in the 90's, and I don't think they have forgotten," observed John Battelle, the editor of SearchBlog, a Web log on search technology. The group includes Eric E. Schmidt, Google's chief executive and former executive of Sun Microsystems; Omid Kordestani, its senior vice president for sales and a former Netscape executive; and John Doerr, a Google director and venture capitalist who was a prime backer of Netscape, Sun Microsystems and other Microsoft rivals. "They are very worried," Mr. Battelle said, "about Microsoft leveraging their I.E. monopoly," referring to Microsoft's commanding share of the browser market, which Microsoft includes in Windows. The fears of both companies may well be exaggerated. For Microsoft, the PC promises to remain a powerful business and technology franchise for years to come. And Google should benefit from the fact that Microsoft, after a federal antitrust judgment against it and a settlement with the government, is more restrained in its tactics and behavior than it once was. A major expense of their escalating battle lies in the very nature of the Internet services realm: the digital engine rooms and power plants that must be built to support it. Google does not disclose technical details, but estimates of the number of computer servers in its data centers range up to a million. Last month, when posting its quarterly earnings, Google reported a doubling in its rate of capital investment, mainly in computer servers, network equipment and space for data centers, and said it would spend at least $1.5 billion over the next year. As Google grows, so does its need to store and handle more Web site information, video and e-mail content on its servers. "Those machines are full," Mr. Schmidt, the chief executive, said in an interview last month. "We have a huge machine crisis." To catch up, Microsoft is also stepping up capital spending as it invests aggressively to build data centers worldwide. "It is becoming more capital intensive," said Mr. Sherlund of Goldman Sachs. "But the company has a bulging cash position and no debt. That's not a constraint for Microsoft." However deep their pockets and established their names, the two companies

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From: Don Green	5/3/2006 6:41:42 PM
	of 74647

Microsoft looking to buy into Yahoo? 5/3/2006 11:05:56 AM, by Eric Bangeman Microsoft's share price has taken a beating lately, in part because of the company's increased spending on R&D. Microsoft may be preparing to write a much larger check, as the Wall Street Journal is reporting (subscription required) that the company and super-size Internet portal Yahoo! have been in talks over Microsoft's possibly purchasing an equity stake in the portal. Here's the rationale. Despite Microsoft's efforts over the past couple of years and a promising Windows Live beta, the company is still arguably far behind Google in search, advertising, and web services. In the meantime, Google is making moves that could be interpreted as positioning it to encroach on Microsoft's turf, such as buying Writely and launching the Google Page Creator. In addition, MSN/Windows Live is a distant third in search engine usage, according to Search Engine Watch. Yahoo has a very strong portal presence and has made some smart acquisitions over the past couple of years, including Flickr and del.icio.us. Arguably, it is also the most popular web site in the US, with over 100 million unique visitors per month, according to the Journal. Where Yahoo is lagging is the all-important search, to the point that despite its strong second place, the company made noises about giving up on passing Google. Those comments didn't sit well with the search team at Yahoo, which quickly rebutted the CFO's throw-in-the-towel comments. That said, Yahoo still trails Google by a wide margin when it comes to search, 42.7 percent to 28.0 percent (MSN comes in at 13.2 percent) for the month of March. Over the past year, there have been senior-level talks between Microsoft and Yahoo over some sort of partnership, with the most likely scenario being the software maker buying an equity stake in the portal. This would be a big change for Microsoft, given its traditional reluctance to make big acquisitions. Ballmer & Company did make a play for a stake in AOL, briefly emerging as the front-runner before Google pulled the trigger on a 5 percent stake near the end of 2005. Much less likely is Microsoft selling off MSN to Yahoo. Currently, there do not appear to be any active discussions between Microsoft and Yahoo. That doesn't rule out the possibility of a deal. The two parties may very well return to the negotiating table at some point if the principals at Microsoft and Yahoo think they can make a deal, or if the senior leadership in Redmond thinks its MSN/Windows Live group ultimately isn't up to the task of dethroning Google. It's even possible that Microsoft could make a play to acquire Yahoo outright, but that could do nasty things to its solid balance sheet depending on how such a deal was structured. Whatever route Microsoft and Yahoo take, one thing is for sure: all roads to online supremacy go through Mountain View, California.

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From: Don Green	5/3/2006 7:08:33 PM
	of 74647

Is Microsoft Vista Farther Out on the Horizon? By Erika Morphy TechNewsWorld 05/03/06 1:18 PM PT Vista is clearly central to Microsoft's repositioning as a media platform. "You can tell just by the features that have been trimmed back from Vista over the last couple of years," said Charles King, principal analyst of Pund-IT Research. "Microsoft is not as vested in providing office and productivity software anymore. Making the Case for Enterprise Mobility: Wireless Management and Spend Control. Find out how AT&T was able to reduce spiraling enterprise mobility costs and boost the efficient use of assets. Gartner has delivered a whammy to Microsoft (Nasdaq: MSFT) that could dampen its efforts to reposition itself as a media-centric platform. The consulting firm released a note suggesting that Microsoft is not on track to make Windows Vista broadly available until at least Q2 2007 -- some nine to 12 months after Beta 2 and well after Microsoft's announced shipping date. Deny, Deny, Deny Microsoft has been quick to deny the validity of Gartner's report. The software giant insists that it remains on track to deliver Windows Vista Beta 2 this quarter and to deliver the final product to volume license customers in November 2006 and to other businesses and consumers in January 2007. Judging who is correct is a difficult call. Microsoft is not known for strict adherence to product release time lines. As Gartner could not resist noting, Microsoft "consistently misses target dates for major operating systems releases." Also, Microsoft recently announced it would have to delay the consumer version of Windows Vista until January 2007 -- missing the all-important holiday season -- another point supporting Gartner's projection. The Importance of Vista On the other hand, unlike Windows 2000, Microsoft has a great deal riding on Vista. "Microsoft has been quoted as saying they view Vista as the most important OS release since Windows 95," Charles King, principal analyst of Pund-IT Research told TechNewsWorld. Vista is clearly central to Microsoft's repositioning as a media platform. "You can tell just by the features that have been trimmed back from Vista over the last couple of years," King said. "Microsoft is not as vested in providing office and productivity software anymore. Any features that have been dropped from Vista have been aimed at the business user." Microsoft also has its partners to consider -- although, again, its track record is not completely stellar in this regard. However, King pointed out that PC vendors such as Intel (Nasdaq: INTC) are counting on having a 64-bit OS for their own product rollouts this year and next. "Any slippage in the Vista release has ramifications well beyond just Redmond," he commented. Remember When? Gartner does not appear to be much impressed by such arguments; the firm is warning companies not to rely too heavily on precise shipping dates. It points to Windows 95 -- the last significant re-engineering of Microsoft's Windows OS -- as a reminder of how far back in schedule Microsoft can slide. The testing phase between beta 2 and the manufacturing phase took much longer than anticipated for that release -- some 16 months.

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