Microsoft News Tracker

Today was the annual Microsoft shareholder meeting and the usual details are in the press release, but the big attention getter in most reports was Ballmer: Products Define Microsoft Success:

Microsoft Corp. Chief Executive Steve Ballmer told shareholders Wednesday that the software behemoth measures its success by its products, not its share price.

“We have never really used the stock market itself as a barometer of our success,” Ballmer said at the Redmond company’s annual shareholder meeting in Bellevue, a Seattle suburb.

Microsoft shares have been trading at about the same level for several years.

In the past 52 weeks, shares have traded between $23.82 and $30.20. Shares were up 4 cents at $27.09 in midday trading Wednesday on the Nasdaq Stock Market.

That generally isn’t what shareholders want to hear, but then Microsoft isn’t the usual company. As far as the products go:

Analysts say the concern is that the increasing number of Internet-based offerings, especially those that are free and ad-supported, will make people less likely to buy new versions of Windows and Office, Microsoft’s cash cows.

I suppose it’s never too early to worry about cannibalizing your own market, but the other side is that if Microsoft doesn’t do it, someone else may.

Update: Todd Bishop has some firsthand shareholder reaction.

Ingrid Marson at CNET:

The Direction Generale des Impots, which manages the taxes of all states and cities in France, plans to deploy the open-source office productivity application OpenOffice.org on thousands of its PCs. In an ZDNet UK interview published Wednesday, Jean-Marie Lapeyre, the chief technical officer at the French tax agency, said it plans to migrate 80,000 desktops from Microsoft Office 97 to OpenOffice.org next year.

More at ZDnet UK.

Press release from Business Wire:

The Associated Press (AP) and MSN today announced that they are teaming to develop the AP Online Video Network to provide AP members with news video for their Web sites. AP member Web sites participating in the AP Online Video Network receive a custom-branded MSN® Video player, daily news video from AP, prestream advertising to run adjacent to the video in the player, and a share of the advertising revenue.

With the new service, AP will make AP news video available to a network of more than 3,500 AP newspaper and broadcast members in the United States. MSN will provide the video player and technology and will sell the advertising for the fully ad-supported service. AP will retain full control over editorial content in the AP Online Video Network. The service, which will be available at no charge to members, will launch in first quarter 2006.

Sounds like one of those advertiser supported online services that Ray Ozzie is talking about.

Now that Visual Studio 2005 has been launched, there has been a good deal of buzz in recent days about what’s next for Visual Studio ([1], [2]). S. “Soma” Somasegar (Microsoft Corporate VP, Developer Division) provides a roadmap in a lengthy post on his weblog. Hit the link for the full details, but to net it out:

- First service pack for Visual Studio 2005 around summer next year

- Ship the localized versions of VS 2005 over the next couple of months and Team Foundation Server in 1Q2006

- “Re-tooling ourselves to be more agile, productive and predictable” via the MQ milestone project

- Planning for Orcas which is “all about enabling platform adoption for Windows Vista, for Office 12 and for WinFX.” Apparently the initial developer tooling for these products in 2006 is still VS 2005, but the following Orcas release will provide enhancements.

- Ad tech “incubation” work for post-Orcas releases and the “Live” push.

Robert A. Guth has the story at the Wall Street Journal:

Microsoft Corp. Chairman Bill Gates has endorsed a radical reshaping of how his company develops software and services, citing an internal memo that says much about the challenges Microsoft faces, and underscores the rise of an emerging technical leader at the company.

That memo, in turn, is from Ray Ozzie:

The core of Mr. Gates’s email, which was examined by The Wall Street Journal, is a memo from Ray Ozzie, Microsoft’s chief technology officer, who describes some of Microsoft’s missed opportunities and also tips a hat to companies such as Google Inc., Salesforce.com Inc., Skype Technologies SA and other start-ups that have pioneered Internet services.

The memo by Mr. Ozzie is a window to the announcement in September that Microsoft would reorganize into three major business divisions, each tasked with adding new online services to the company’s existing product lines.

It also confirms the role that Mr. Ozzie is playing in pushing the newly formed groups to create online services that can be paid for by subscription or through advertising. Last week, Messrs. Gates and Ozzie announced a step toward that goal — new online services coupled with Microsoft’s Windows operating system and Office suite of software.

In his memo, Mr. Ozzie directs each of Microsoft’s three business units to start mapping out a strategy for developing their own services — two of which were announced last week. He also describes a plan to appoint by Dec. 15 top executives at each of the three business groups.

By January, those executives will work to map the changes needed to better tap into the Internet’s advertising boom and online services in general, Mr. Ozzie said.

More by following the link and Dave Winer has posted the full text of the two memos, received from an anonymous source.

Update: Some pundit reaction:

Michael Gartenberg - The Gates and Ozzie Memos - deja vu all over again:

Interesting reading but no real surprises here. In fact, to some extent we’ve seen it before. Gates more than anyone understands the importance of being proactive and not reactive. He understands that while these new service offerings aren’t a direct threat today, they well could be over time.

Paul Thurrott:

So what are we to make of all this? Microsoft’s reaction to the Google threat is both predictable and suspiciously similar to past “turn the ship around” incidents. Gates seems to have latched on to the notion that he must lead his company on a new crusade every five years in order to keep employees motivated. And Microsoft’s self-critical stance is as manipulative now as it was ten years ago. Increasingly, companies such as Google, Skype, and Yahoo are determining the direction of communications and computing. That Microsoft needs to move more quickly and begin innovating should be obvious. What I want to know is why there is such a regular failure of leadership and direction at this company. Does Microsoft really need to be rebooted every five years to keep the company competitive?

Joe Wilcox:

Intentional leak of the memos wouldn’t be far fetched. Microsoft is embarking on a major, new strategy with almost no products to show. Meanwhile, hype increases around Web 2.0 and vendors like Google, Salesforce.com or Yahoo! offer sophisticated Web-based products or services. The memos signal Microsoft’s intention to shift course and that the other boats had better get out of the way. Similarly, the strategy leak is meant to tell passengers of competitor boats that they might want to wait for Microsoft’s ship to sail. If intentional, the leak is a classic vaporware maneuver.

Mary Jo Foley provides a Cliffs Notes version of the Ozzie memo and observes:

Tech evangelist Robert Scoble’s interpretation of CTO Ray Ozzie’s and Chairman Bill Gates’ services memos: “Yes, the guys at top are now yelling ‘turn, turn, turn.’” We say: Watch out for those Web 2.0 rocks, guys.