Microsoft News Tracker

Despite appearances, this blog isn’t about Google, but it’s rather hard to discuss Microsoft these days without reference to the crew in Mountain View. Today Google announced earnings and once again blew past analyst expectations:

Google Inc. said Thursday that profits soared nearly 70 percent in the first quarter on the back of solid sales growth, allowing the world’s No. 1 search engine to keep its dominant spot in the red-hot online advertising business.
…
Excluding stock-based compensation as well as a tax benefit and other items, the company reported a profit of $3.68 a share, ahead of the $3.30 a share that analysts were expecting on this basis.

More details by following the link and in the press release. One highlight is that 47% of revenue now comes from outside the USA.

Other Microsoft-related GOOG news this week:

• Google acquires Tonic Systems, which rounds out their online office suite by giving them an editor for Microsoft PowerPoint presentations.
• Google Spreadsheets adds charts - I’d call them graphs.
• Then there’s the Google phone rumor, but I won’t go there since the Zune phone is still a rumor too.

Microsoft Chairman Bill Gates used a speech in Beijing to introduce a number of new Microsoft philanthropic initiatives directed at developing nations. Attracting the most buzz was a bargain software package for students:

Redmond, Washington-based Microsoft said it plans to offer a software package called Microsoft Student Innovation Suite for $3 to governments purchasing and giving Windows-based computer to primary and secondary students.

The software bundle, which will be available in the second half of 2007, includes Windows XP Starter Edition, Microsoft Office Home and Student 2007, Windows Live Mail desktop and other programs.

It’s not clear how many relevant governments have the wherewithal for extensive rollouts of PCs to students, but the thought is nice even if there is more to it than sheer altruism.

“This is not a philanthropic effort, this is a business,” Orlando Ayala, senior vice president at Microsoft’s emerging segments market development group in an interview before the official announcement.

In many emerging markets, Microsoft has seen its software pirated and sold at a fraction of the price of a genuine product. Microsoft said the technology industry must also adapt business models to developing nations.

Case in point: the report at Newlaunches.com in which they quote the “Windows Vista chief distributor in Beijing” to the effect that:

However after 2 weeks (Jan 19 to Feb 2) from launch Microsoft managed to sell a mere 244 copies of Windows Vista. Software piracy is rampant in the middle kingdom and a pirated version of Vista sells for a mere $1 on the streets.

They have some nice box shots of pirated copies of Vista too and not unexpectedly, humorous comments abound at slashdot like “244 copies ought to be enough ….”

Ina Fried at CNET reports that Dell brings back XP on home systems:

Amid significant customer demand, the computer maker said on Thursday that it has returned to offering the older Windows version as an option on some of its consumer PCs.

Like most computer makers, Dell switched nearly entirely to Vista-based systems following Microsoft’s mainstream launch of the operating system in January. However, the company said its customers have been asking for XP as part of its IdeaStorm project, which asks customers to help the company come up with product ideas.

“We heard you loud and clear on bringing the Windows XP option back to our Dell consumer PC offerings,” Dell said on its Ideas in Action page. Users get to vote on various suggestions, and the notion of bringing back XP got 10,000 “points,” making it among the most popular requests but well below top picks such as adding Linux or OpenOffice.org to its PCs.

Windows XP systems became scarce, but not impossible to find, after Vista arrived. For example, Hewlett-Packard said it would continue selling XP on some machines aimed at small and midsize businesses, while CompUSA still stocks a couple of business-oriented XP systems in its retail stores. Lenovo has also continued shipping XP on many of its business systems.

Starting immediately, Dell said, it is adding XP Home and Professional as options on four Inspiron laptop models and two Dimension desktops.

Earlier this month, Dell added XP back as an option for small-business customers, but at the time, it said it would not add it back for home users.

I’ve said before that “this too shall pass” and, of course, Microsoft makes money either way, but I am surprised at how little “wow” Vista actually is proving to have for consumers and wondering a bit where the $500 million marketing budget went.