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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.
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. [...]
October 26th, 2008 at 5:04 PM
[...] Old reliable Office brought home the bacon with the help of $214 million from currency exchange rates. Of note is that, "Consumer revenue increased $288 million or 36%, reflecting increased sales primarily due to promotional pricing programs for the 2007 Microsoft Office system." Expenses increased apparently mostly driven by the troubled acquisition of FAST. [...]
February 10th, 2009 at 7:24 PM
[...] $1.2 billion acquisition of Fast Search & Transfer has been a bit bumpy, but today Microsoft unveiled the first integration of FAST technology into their products: FAST [...]