Allison Linn at the AP reports that the financial analysts want more detail on Microsoft’s spending plans at the financial analysts meeting scheduled for July 27:
When Microsoft Corp. gathers financial analysts next week for an annual meeting at its Redmond campus, the demand won’t be so much to “show me the money” as to “show me what you’re doing with the money.”
Microsoft executives offered some relief Thursday during the company’s fiscal fourth quarter earnings call, when they provided a breakdown of the general areas where they plan to allocate about $2.7 billion in increased spending. Still, at the meeting next week, analysts say they are expecting more details on where exactly the money is going – and what shareholders can expect to get in return.
Microsoft said it expects to spend about $500 million more in the current fiscal year on improving its own Internet-based software offerings. The budget includes money for improving its search and online advertising technology – the key ways it hopes to battle Google Inc. and Yahoo Inc.
Also during the fiscal year, Microsoft expects to spend about $450 million more on marketing, in part because of the launch of new versions of Windows and Office.
Another $450 million will be spent on boosting its sales efforts.
Microsoft also said it will increase spending by $1 billion to either develop or improve products in areas where it sees potential to grow beyond its traditional Windows and Office roots. These include security and more sophisticated communications technology.
Not to mention Zune again, and frankly I suspect you have to in order to justify $1 billion, because “security and more sophisticated communications technology” don’t seem like real crowd pleasers.
The final $300 million will be for general spending increases and potential acquisition costs.
Although analysts were caught by surprise by the big spending spree, many say they are glad Microsoft is getting more aggressive about competing and expanding its business further beyond Office and Windows, which face an ever-more-saturated market.
Obviously they’re still of the “Microsoft is a growth stock” persuasion.