Microsoft News Tracker

Erick Schonfeld at TechCrunch has the lowdown on the dirty financial laundry being aired from Fast Search and Transfer which Microsoft acquired in January and whose technology is scheduled to appear in SharePoint Server and SQL Server:

Even back in January when Microsoft agreed to pay $1.2 billion for enterprise search company Fast Search & Transfer, it was mired in an accounting scandal and trading in its stock had been suspended. Its aggressive accounting for phantom deals that never materialized earned it the moniker the “Enron of Norway.” But more sordid details keep coming out from some tenacious reporting by the Norwegian press.

The latest account comes in the June 28 issue of the Norwegian magazine Dagens Næringsliv. In an article (in Norwegian) by Trond Sundnes, Dagens Næringsliv, Gøran Skaalmo, the magazine details how the Norwegian company booked free software trials as revenues, and how its executives set up shell corporations for allegedly self-dealing purposes.
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According to the article, Fast had booked $50 million in fake revenue, $20 million in fictional contracts, and former top executives closely linked to CEO Markus Lervik siphoned off $6 million to shell companies they controlled. Lervik continues to lead the business and is currently the vice president for enterprise search at Microsoft.

Click through for all the details, but it looks like this one is going to need a whole lot of damage control. It also raises questions, perhaps unjustly, about the Fast Search & Transfer technologies themselves.

A little pre-holiday humor from Henry Blodget - Yahoo, Microsoft, Time Warner, News Corp, and AOL Agree To Talk Forever And Never Do Anything:

All major Internet companies not named Google are in talks about mergers, partnerships, spinouts, and other proposals to quiet irate shareholders and stop getting their butts kicked, says the WSJ. No news on when they finally plan to stop talking and actually do something.

Those of us of sufficient antiquity can remember a time in the early 90’s when one could have said something quite similar:

All major PC software companies not named Microsoft are in talks about mergers, partnerships, spinouts, and other proposals to quiet irate shareholders and stop getting their butts kicked. No news on when they finally plan to stop talking and actually do something.

Of course, all the corporate couplings and reorganizations did no good for Microsoft’s competitors then and I don’t expect them to do much for Google’s competitors now. Blodget’s suggestion is that Yahoo skip the palaver and concentrate on straightening out their business which seems eminently sensible, but increasingly unlikely due to all the distractions for both management and staff.