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January 31, 2007

Google beats expectations, but…

Posted by David Hunter at 8:37 PM ET.

Google exceeds expectations in Q4:

Google beat Wall Street’s expectations for its fourth quarter, ended Dec. 31, 2006, as the company continues on a tear, selling search engine advertising much faster than its biggest rivals and than the industry average.

Google generated revenue of $3.21 billion, an increase of 67 percent compared to the fourth quarter of 2005, the company said Wednesday. Subtracting the commissions it pays to its advertising partners, revenue came in at $2.23 billion, topping the consensus expectation of $2.195 billion from analysts polled by Thomson Financial.

Net income was $1.03 billion, or $3.29 per share, compared with $372.2 million, or $1.22 per share, in 2005′s fourth quarter. On a pro forma basis, which excludes certain items, net income was $997 million, or $3.18 per share, topping analysts’ expectation of $2.92 per share.

With profit almost tripling and revenue increasing at blockbuster rates, Google executives were unsurprisingly ecstatic in a conference call about the quarter’s results and indicated that the company has many green fields to explore and keep growing.

However, the good news wasn’t good enough for the tough bunch on Wall Street:

The news pushed shares in the Web search leader down more than 3 percent in after-hours trading.

“The stock is down because they didn’t blow out the numbers. Expectations have come up recently,” said Martin Pyykkonen, an analyst at Global Crown Capital. “As expected they gained share relative to Yahoo in paid search but not by a wide margin.”

Note also that per the press release, 37% of Google ad revenue came from partner sites. While this has been dropping slightly over recent quarters it’s still a respectable chunk of change, but one that Microsoft so far refuses to sully its hands with.

Filed under Coopetition, Google, MSN, Microsoft, Yahoo, adCenter

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Microsoft Zune exec Bryan Lee bails out

Posted by David Hunter at 7:22 PM ET.

Bryan Lee, Microsoft’s Corporate Vice President, Entertainment Business, who in December 2005 took over “as head of a new entertainment business charged with overseeing the company’s growing digital efforts in music, television and video,” has decided to move on:

A senior Microsoft executive who oversaw the launch of its Zune digital music player plans to leave the company, the world’s largest software maker said on Wednesday.

Bryan Lee, corporate vice president at Microsoft’s entertainment and devices division, also played a critical role in shaping the Xbox game console business and the introduction of its Internet Protocol television software.

Lee is a key deputy of Robbie Bach, head of Microsoft’s entertainment and devices division. J Allard, a rising star within Microsoft and one of the early Xbox leaders, will now take full responsibility for the Zune business.

Lee plans to leave the company in the next several weeks to pursue personal interests, Microsoft said.

It could be a variety of things of course, but the natural inclination is to view this as a rearrangement of the deck chairs after HMS Zune clipped the iPod iceberg.

Update: Speaking of which, here’s alarming news from Microsoft’s Zune Insider:

If you have a Zune that isn’t skipping (which, truth be told, is the majority of owners), move along, nothing to see here, move along. But if the content from ZMP is skipping on your device, I want to tell you that the team is aware, and is working on it.

Update 2/2: Antone Gonsalves at InformationWeek:

In other executive shuffling, Joe Belfiore, VP of Windows Media Center, and Enrique Rodriguez, VP of Microsoft’s TV Division, who both reported to Lee, will now report to Bach.

Filed under Apple, Argo, Coopetition, Executives, J Allard, Microsoft, Robbie Bach, Zune

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Vista and Office 2007 Postlaunch Odds and Ends

Posted by David Hunter at 4:47 PM ET.


As anticipated, Jim Allchin retires from Microsoft as Vista ships. More here.

No surprise: Microsoft targets Vista sales in line with PC growth. The only question is whether Microsoft will be able to increase the per PC revenue.

Windows Live Messenger 8.1 for Vista has been released as has Windows PowerShell 1.0 for Windows Vista, but where is the final version of Windows Mobile Device Center for Windows Vista? (Yes, there is a beta so the mobile gadget users aren’t completely abandoned by nonsupport of ActiveSynch).

Microsoft Delivers First Windows Vista Ultimate “Extras.”

Vista Casts A Pall On PC Gaming due to restrictive security and parental controls according to an online game network developer. Microsoft denies.

Vista ‘Family Discount’ Bites Back with invalid installation keys. No date for a fix.

According to the EULA, you shouldn’t be running any Home editions of Vista in a virtual machine. I haven’t seen the results of any testing, but you may not have any choice since running in a VM is detectable.

Microsoft accused over software’s landfill impact. It’s a Green thing. 

Office 2007

The (Few) Ways Vista Makes Office 2007 Work Better.

Microsoft exec insists companies won’t need ‘big sophisticated training plan’ to roll out Office 2007.

Update: Also apparently AWOL is SQL Server 2005 SP2 which provides Vista support for SQL Server Express, the successor to MSDE which is unsupported on Vista and the desktop database for a number of applications including some from Microsoft.

Filed under Executives, Financial, General Business, Jim Allchin, Licensing, Marketing, Microsoft, OS - Client, Office, Office 2007, PC Games, PowerShell, Public Relations, SQL Server, Servers, Technologies, Virtualization, Windows Live, Windows Live Messenger, Windows Vista

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January 30, 2007

Vista first day snooze

Posted by David Hunter at 9:40 PM ET.

After yesterday’s preparatory hoopla, news reports indicate that today’s actual appearance of Windows Vista on store shelves wasn’t greeted by consumers with much enthusiasm. Some showed up at midnight sales events to see the sports stars or for the free food, others because of separate hardware sales, and a few to actually buy preloaded Vista systems or even boxed copies of Vista. It makes no real difference of course, since Vista is as inevitable as death and taxes. Very shortly consumers will be hard pressed to buy a new PC without Vista and the cash registers will keep ringing in Redmond regardless of any first day languor.

This lack of excitement is likely why the first day punditry was mostly devoted to Microsoft’s $500 million Vista Marketing blitz. Yesterday, I was unaccountably pacific at the prospect, but that was before Microsoft unleashed their stable of clueless viral marketers:


They’ve even resuscitated the useless and annoying Avant garde thinking in the ad world undoubtedly eschews actually showing the product, much more what it does, but it’s hard to believe that this kind of thing does anything more than befuddle consumers.

Oh well, at least Microsoft marketing has amazingly always had the good sense to avoid the goofiness of Second Life. Oops, I spoke too soon. Pictures of the venues (not the habitues) here.

Update 1/31: Ashlee Vance weighs in on the Second Life initiative in inimitable Register style.

Filed under General Business, Marketing, Microsoft, OS - Client, Windows Vista

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