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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.
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July 17th, 2008 at 6:25 PM
[...] Business revenue up 19%, consumer revenue down 7%, a plus 6% from currency rates, and by golly, MBS billings were up 22%. Expenses were up a bunch including development headcount, online services (hint, hint) and some charges for the troubled acquisition of FAST. [...]