February 15, 2007 2:11 PM PST

Microsoft to drop back on spending growth

Microsoft plans to increase its operating expenses next year, but it won't reach the $2.7 billion increase inked in for 2007, CEO Steve Ballmer told financial analysts on Thursday.

"I wouldn't expect a huge drop. Just a small drop is what you should have in mind," Ballmer said at a meeting with investors and financial analysts in New York.

He also cautioned that some analysts may be forecasting too much revenue growth in the Windows business associated with the launch of Vista. He noted that although Microsoft expects growth, more of it will come from consumers and in emerging markets--places where it gets less revenue.

"We're driving it hard, but I think some people have gotten a little overexcited," Ballmer said at the event, which was also broadcast over the Internet.

The company expects to see some gains by reducing piracy rates with Vista, but Ballmer said that the added revenue won't be that large when compared with the overall size of the Windows business.

Microsoft plans to give detailed guidance for its coming 2008 fiscal year at its April earnings conference call. It reported quarterly earnings in January that were ahead of what many analysts had predicted.

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Foreign language
Translation: "You mean you actually believed all my BS about Vista
being the greatest thing since sliced bread? C'mon, guys! I'm
Steve effin' Ballmer! You should know me by now!"
Posted by Splashes (423 comments )
Reply Link Flag
Some more translations from Microspeak...
I wouldn't expect a huge drop. Just a small drop is what you should have in mind.

Translation: It costs us $5B to deliver a service pack so we can't cut spending even if we don't have any new products in the pipe.

He noted that although Microsoft expects growth, more of it will come from consumers and in emerging markets--places where it gets less revenue.

Translation: there's no real reason for existing customers to upgrade so we're going to try to sell some $150 laptops.

The company expects to see some gains by reducing piracy rates with Vista, but Ballmer said that the added revenue won't be that large when compared with the overall size of the Windows business.

Translation: all of the incredibly offensive hoops we're making legitimate customers jump through won't really make any difference to pirates.
Posted by fcekuahd (244 comments )
Link Flag
Foreign language
Translation: "You mean you actually believed all my BS about Vista
being the greatest thing since sliced bread? C'mon, guys! I'm
Steve effin' Ballmer! You should know me by now!"
Posted by Splashes (423 comments )
Reply Link Flag
Some more translations from Microspeak...
I wouldn't expect a huge drop. Just a small drop is what you should have in mind.

Translation: It costs us $5B to deliver a service pack so we can't cut spending even if we don't have any new products in the pipe.

He noted that although Microsoft expects growth, more of it will come from consumers and in emerging markets--places where it gets less revenue.

Translation: there's no real reason for existing customers to upgrade so we're going to try to sell some $150 laptops.

The company expects to see some gains by reducing piracy rates with Vista, but Ballmer said that the added revenue won't be that large when compared with the overall size of the Windows business.

Translation: all of the incredibly offensive hoops we're making legitimate customers jump through won't really make any difference to pirates.
Posted by fcekuahd (244 comments )
Link Flag
'bout time
'nuff said.


<a class="jive-link-external" href="http://www.ashgilpin.com" target="_newWindow">http://www.ashgilpin.com</a>
Posted by ashgilpincom (30 comments )
Reply Link Flag
'bout time
'nuff said.


<a class="jive-link-external" href="http://www.ashgilpin.com" target="_newWindow">http://www.ashgilpin.com</a>
Posted by ashgilpincom (30 comments )
Reply Link Flag
'bout time
'nuff said.


<a class="jive-link-external" href="http://www.ashgilpin.com" target="_newWindow">http://www.ashgilpin.com</a>
Posted by ashgilpincom (30 comments )
Reply Link Flag
'bout time
'nuff said.


<a class="jive-link-external" href="http://www.ashgilpin.com" target="_newWindow">http://www.ashgilpin.com</a>
Posted by ashgilpincom (30 comments )
Reply Link Flag
Evolution Of The IT Industry
Microsoft's issues are predictable. Each new industrial cycle introduces high-profit margin products for markets which are eventually
saturated.

<a class="jive-link-external" href="http://www.realmeme.com/roller/page/realmeme/?entry=evolution_of_the_it_market" target="_newWindow">http://www.realmeme.com/roller/page/realmeme/?entry=evolution_of_the_it_market</a>

In other words, information has a finite cost and a finite price. The greatest anomaly of this cycle is the astounding rate-of-change in information manipulation but it still looks a lot like previous cycles.
Posted by Broward Horne (88 comments )
Reply Link Flag
Evolution Of The IT Industry
Microsoft's issues are predictable. Each new industrial cycle introduces high-profit margin products for markets which are eventually
saturated.

<a class="jive-link-external" href="http://www.realmeme.com/roller/page/realmeme/?entry=evolution_of_the_it_market" target="_newWindow">http://www.realmeme.com/roller/page/realmeme/?entry=evolution_of_the_it_market</a>

In other words, information has a finite cost and a finite price. The greatest anomaly of this cycle is the astounding rate-of-change in information manipulation but it still looks a lot like previous cycles.
Posted by Broward Horne (88 comments )
Reply Link Flag
 

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