Microsoft’s online woes? Living off patents and Office?

Today I’m looking at figures produced which allegedly show the amount of money Microsoft is losing online and ask the question based on those figures, is it only Office and patents which are keeping Microsoft alive?

We brought up the subject on the TechBytes show, so I thought it would be nice to elaborate on some of the sources I used for that particular section.

Business Insider has said:

This gives Microsoft a trailing-four-quarter loss of $2.5 billion. That’s simply astounding. We’ve asked it before, and we’ll ask it again: Has any company lost as much money online as Microsoft?


Whilst showing figures of Microsoft losing 543 million online.  Furthermore it goes on to show that Office was mainly responsible for growth:

According to Microsoft’s 10-Q filing for the last quarter of 2010 (Microsoft’s Q2’11), Business Division revenue from consumers grew $471 million or 49% from last year, and nearly all of that growth is coming from Office.

Read more:

And there is still no mention of WP7 real sales figures.

There are others making observations of Microsoft’s online schemes, Frank Reed of Marketing Pilgrim states:

Let’s face it, the only reason Google has any competition at all in search is because Microsoft is willing to lose a lot of money to say they are in the game.

Source: Marketing Pilgrim

Let’s cast our minds back to Microsoft giving it Bloggers and their data to WordPress and consider that had it not been for the charity of Linux powered WordPress, there would have been many unhappy Microsoft Bloggers.  Did we ever find out the real reason for Microsoft nuking its blogs? Could it have been one of many fat cutting exercises in a desperate bid to try and make money online (or at least lessen the losses?)  whatever the reason though, there are others making a very tidy living online, I wonder why Microsoft is alleged to struggle?

Maybe the future of Microsoft will be in the courtroom clutching its briefcase of patents and skimming a little of the top from companies that are successful?

There are changes afoot and I wonder what the publicly Microsoft faithful will do when it finally dawns on them which way the wind is blowing?  Do they really think that the attempts they made to cheapen competition over the years will be forgotten?  The people who have put their name to their pro-Microsoft viewpoint I think, will find their words coming back to haunt them, when they too switch to alternatives.

In my opinion, Microsoft has very little to offer.  They have grown so large, that sustaining themselves with the products they do make returns on is no longer viable.  For me it comes as no surprise that Microsoft would seek to get revenue from patent maneuvers.  In the past I’ve made predictions, one of which being Ballmer will be gone come mid 2011, I also said that whilst Microsoft will not simply shut up shop, I think the Microsoft of the future will be far smaller and humble than the bloated monster it is today.  What worries me are the products/companies it will bring down with it as it desperately tries to keep its position of power.

The downfall of Microsoft?

Well no, not really. It’s being also reported that Xbox is finally making a profit and approximately 5 years after its release, I would think its just as well. Whilst this, on the face of it seems to be good news for Redmond, it raises a point which I put many months ago.   Since MS is now in the profit with its Xbox brand and Kinect (the games controller) seems to be popular, it further reinforces my point that I think MS is hoping it will drag out the life of the 360 for quite a few years to come. Whilst this would be fine if 360 was the only player in town, you have Sony rumoured to be releasing an upgrade module to further increase the specs of its Ps3 and Nintendo and goodness knows what it its future, will Kinect be enough to keep people on the platform when software becomes even more demanding and especially when you consider that despite initial rattling of sabre’s from Microsoft, coders ignored them and busted open the Kinect for use on other platforms.

2011 will be a very interesting year, with apparently people moving to tablets/mobile, Apple and Linux being enthusiastically snapped up by consumers, what’s the future for Microsoft? Maybe it will be making game controllers and waving its patent portfolio in court?

External links

Microsoft Site Hacked and the Company is Apparently Faking Financial Reports, Again

Kinect is Microsoft’s Latest Savior

Marketing Pilgrim

Goblin – /

You can also contact me on Skype: tim.openbytes

If you are new to this blog (or have not yet read it) please take time to view the OpenBytes statement, here.


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