Tag Archive

SEATTLE (Reuters) — Microsoft Corp. put its new Zune HD digital music and video player on sale Thursday, pricing it below comparable Apple Inc. iPod devices, in an attempt to claw some market share away from the dominant leader.The devices, which are available for pre-order but won’t hit shelves until Sept. 15, are priced at 219.99 for the 16 gigabyte version and 289.99 for the 32 gigabyte version. Comparable iPod Touch players are priced at 299 and 399 respectively.A 16-gigabyte player typically holds about 4,000 songs.Microsoft’s new Zune HD is slimmer than previous version and has a touch screen for the first time. The range comes in five colors and has a built-in radio receiver, Wi-Fi, and can display high-definition video to a big screen.

Source:CNN

SEATTLE/HELSINKI (Reuters) — Microsoft Corp. and Nokia announced an alliance Wednesday to bring advanced business software to smartphones in a bid to counter the dominance of Research in Motion Ltd.’s BlackBerry device.The alliance between the world’s largest software firm and the largest cell phone maker means the latest online versions of Microsoft’s (MSFT, Fortune 500) Office suite of applications, including Word, Excel and PowerPoint, will be available on a range of Nokia handheld devices.The two companies, at one time fierce rivals in the mobile telecommunications business, expect to offer Nokia (NOK) phones running Office sometime next year, targeting the lucrative market for business users.”This is giving some of our competitors — let’s spell it out, RIM (RIM) — a run for their money,” said Nokia executive vice president Robert Andersson, in a telephone interview.”I don’t think BlackBerry has seen the kind of competition we can provide them now.”The alliance may also counter Google Inc.’s (GOOG, Fortune 500) recent move into free online software, which has been targeted at Microsoft’s business customers.

Source:CNN

NEW YORK: Microsoft has agreed to hire at least 400 Yahoo employees as part of the companies’ new plan to share revenue on Internet search advertising, a regulatory filing showed Wednesday. The software maker also agreed to pay the Internet search engine 150 million over three years to help implement the new partnership, Yahoo said in a Securities and Exchange Commission filing.Under the deal, which was announced July 29, search results on Yahoo.com will be powered by Microsoft’s technology. Yahoo, in turn, will be responsible for attracting premium advertisers.Microsoft will pay Yahoo 88% of the revenue it gains from searches on Yahoo’s sites. Microsoft will also have the rights to integrate Yahoo’s search technology into its own existing Web search platforms. The partnership is seen as a bid to challenge Google’s (GOOG, Fortune 500) dominance in the lucrative market for internet search advertising. The deal, which is subject to approval by antitrust regulators, is expected to close in early 2010. Microsoft (MSFT, Fortune 500) and Yahoo (YHOO, Fortune 500) shares were little changed in premarket trading.

Source:CNN

REDMOND, Wash. (Reuters) — Microsoft Corp.’s chief executive tried to persuade skeptical investors Thursday that its 10-year Web search partnership with Yahoo Inc. is good for both companies.Shares of Yahoo (YHOO, Fortune 500) slumped 12% after the long-expected deal was announced on Wednesday, and fell more than 3% on Thursday. Microsoft (MSFT, Fortune 500) shares rose only slightly, puzzling CEO Steve Ballmer.”I was myself kind of surprised by the market reaction,” Ballmer told a meeting for financial analysts at Microsoft’s headquarters near Seattle. “Nobody gets it. It’s a little bit complicated.”Under the deal, aimed at creating a stronger competitor to Google Inc. (GOOG, Fortune 500), Microsoft’s Bing search engine will power queries on Yahoo’s sites. In return, Microsoft will pay Yahoo 88% of revenue from advertisements generated from these sites.0:00
/4:52Dissecting the ‘Microhoo’ dealIn theory, that means Microsoft gets more traffic to refine its search technology and build up its ad base, while Yahoo gets revenue from search ads without the expense of managing its own search engine.The deal appears to end a long saga between the companies, after Yahoo rebuffed Microsoft’s 47.5 billion takeover bid last year.”Nothing got sold yesterday and nothing got bought yesterday,” Ballmer told the meeting, in an attempt to explain the deal. “It’s a win-win deal from my perspective.”Yahoo’s share of search ad revenue is a “big number,” said Ballmer, considering the company will have to lay out no money to obtain the revenue.”On the Yahoo side — this is the one that stuns me that people haven’t figured it out — Yahoo gets 88% of the search revenue they have today. They have zero percent COGS (cost of goods sold) and they have no R&D (research and development) expense and no ongoing capex (capital expenditure),” said Ballmer. “It’s sort of unbelievable.”For Microsoft, he said the deal means it gets more Internet traffic, enabling it to refine its search technology, which should lead to more interest from ad buyers and hence better prices for its ads.”The more queries you see, the more you can tune your product. The more scale you have, the more advertisers advertise on your system, and the more relevant they make their ads for your users,” said Ballmer. “Because we have more bidders in our advertising marketplace, we will get higher bid prices, probably, and more liquidity in the marketplace. That will improve monetization.”Yahoo shares closed down 3.6% at 14.60 on Nasdaq. Microsoft shares closed up 1 cent at 23.81.

Source:CNN

NEW YORK: Microsoft and Yahoo reached a long-awaited partnership Wednesday in a bid to challenge Google’s dominance in online search.Under the 10-year deal, Microsoft will integrate Yahoo search technology into its existing Web search platforms. Microsoft’s new search tool, Bing, will power Yahoo sites. Yahoo will sell premium ads on both sites.Microsoft and Yahoo will share revenue on traffic generated on Yahoo’s network.The deal will allow Microsoft to “create more innovation in search, better value for advertisers and real consumer choice in a market currently dominated by a single company,” said Steve Ballmer, Microsoft chief executive, in a statement.It was a partnership that was a long time in the making. Microsoft’s (MSFT, Fortune 500) search market share has been slipping for more than two years, and the company has struggled to make its online advertising unit profitable. Meanwhile, Yahoo (YHOO, Fortune 500), once the search market leader, dropped to a distant second place behind leader Google (GOOG, Fortune 500) by 2007.The dealings between the two companies began Feb. 1, 2008, when Microsoft made an unsolicited 44.6 billion cash and stock bid for Yahoo. A week later, Yahoo rejected the bid, saying the 31 per share offer “massively undervalues” the company, despite the fact that the bid represented a 62% premium over Yahoo’s 19.18 closing stock price a day before the announcement.In an attempt to fend off Microsoft, Yahoo launched a two-week trial partnership with rival Google on April 10, 2008. That involved outsourcing advertising space to Google as part of a short-term agreement that could eventually lead to a bigger partnership.Microsoft threatened to take its bid to Yahoo’s shareholders by the end of April if a deal could not be reached, and even sweetened the pot to 33 per share. In a turnaround move, Microsoft opted to avoid a hostile takeover and simply dropped the bid for Yahoo altogether on May 5 of last year. Microsoft CEO Ballmer cited the economics of the deal as well as Yahoo’s interest in a long-term Google partnership as reasons.Almost as soon as the deal seemingly died, signs of life re-emerged. First, activist investor Carl Icahn threatened Yahoo’s board with a proxy battle if the company’s executives didn’t return to the bargaining table with Microsoft. Then, shares of Yahoo rocketed higher on May 19, 2008, when rumors circulated that Microsoft was interested in Yahoo’s search advertisement business. 0:00
/4:54Yahoo searches for itselfOn June 12 of last year, however, Yahoo announced that discussions with Microsoft had ended without a pact. The same day, Yahoo turned around and announced a deal with Google to put Google ads on Yahoo’s search pages. That tie-up was later nixed after a Justice Department antitrust investigation prompted Google to end the partnership. Icahn and Yahoo reached a truce in late July of last year.The situation at Yahoo took a turn for the worse after the credit crisis erupted in October. Yahoo announced it would lay off 10% of its workforce in late October, shares slipped below 9 in November and Chief Executive Jerry Yang announced his resignation.When Carol Bartz came on as Yahoo’s new CEO in January 2009, she said she would not sell the company outright, but appeared to be more open to a sale of the company’s search business.Rumors of a possible deal were reignited when Bartz acknowledged at the All Things Digital conference on May 27 that Yahoo and Microsoft had been talking “a little bit,” and said outright that Yahoo’s search business was for sale, albeit for “boatloads” of money.The next day, Ballmer unveiled Microsoft’s new Bing search engine. Reports began to circulate in mid-June that Bing was a success, growing Microsoft’s beaten-down search market share and eating into Yahoo’s, and Ballmer reiterated to Fortune’s Patricia Sellers that Microsoft “remains open to a partnership with Yahoo.”

NEW YORK: Microsoft and Yahoo have finally come to a search deal and will announce the details of the agreement in the next 24 hours, according to a report.It is not clear whether the two companies have signed any official papers, but the negotiations of the deal, which also includes advertising, have finally come to a close, The Wall Street Journal said Tuesday. Yahoo (YHOO, Fortune 500) and Microsoft (MSFT, Fortune 500) have been in talks for some time to join forces on Internet search and advertising technology. Together, the two could stand a better chance to gain market share from rival Google (GOOG, Fortune 500). 0:00
/5:11Tech earnings strengthMicrosoft launched its own Internet search portal, Bing, in early June. While Bing met with initial success, Microsoft has still been unable to post a profit in its online advertising business.Microsoft and Yahoo would share revenues on the deal, and Yahoo would not get any money up front, according to the Journal.

Source:CNN

BRUSSELS (Reuters) — Microsoft has offered to let users choose their own browser and provide more interoperability information to third parties in a bid to resolve two antitrust cases, EU regulators said on Friday.The European Commission charged the U.S. software company on Jan. 15 with seeking to thwart rivals by bundling the company’s Web browser with its Windows PC operating system, thus harming innovation and reducing consumer choice.And in January last year, the EU executive had launched a probe on a complaint by industry body ECIS alleging that Microsoft (MSFT, Fortune 500) had refused to disclose information that would allow third parties to design programs compatible with its products.The Commission welcomed both proposals by Microsoft.It said the browser offer was in line with proposals in its January 2009 charge sheet, the so-called statement of objections, and would be valid for Windows 7, due to be launched in October.”The proposal recognizes the principle that consumers should be given a free and effective choice of Web browser, and sets out a means — the ballot screen — by which Microsoft believes that can be achieved,” the Commission said in a statement.It said the company also planned to disclose more interoperability information related to Windows and Windows Server. The Commission said it would investigate both proposals before making a decision.Microsoft has been involved in a long-running dispute with the Commission and has been fined 1.68 billion euros to date for infringing EU antitrust rules.

Source:CNN

NEW YORK: Microsoft Corp. blamed weakness in the global PC and server markets for a sharp drop in quarterly revenue that missed Wall Street’s forecasts. Sales fell 17% to 13.1 billion in the company’s fourth-quarter ended June 30, badly missing analysts’ forecasts of 14.4 billion. It was the second consecutive quarter in which sales fell from year-ago levels. In the company’s previous quarter, sales fell for the first time in Microsoft’s 23-year history as a public company.Microsoft’s chief operating officer, Kevin Turner, said in a statement that “economic conditions presented challenges this year.” Shares of Microsoft (MSFT, Fortune 500) fell 8% after hours.The company’s profit also declined, but managed to beat analysts’ forecasts. The Redmond, Wash.-based software giant said its fourth-quarter net income fell 29% to 3.1 billion, or 34 cents per share. Results included a deferred revenue of 2 cents per share, or 276 million, from sales of its new Windows 7 operating system, and charges of 2 cents a share on job cuts and other one-time events. Excluding the deferral and charges, Microsoft earned 38 cents per share. Analysts polled by Thomson Reuters, who typically exclude one-time items from their estimates, had projected earnings of 36 cents per share.0:00
/3:06Google, Microsoft turf warResults came as competition grows between Microsoft and its rivals. Google (GOOG, Fortune 500) announced in early July that it will unveil an operating system for netbooks next year — a market of which Microsoft controls about 90%. Last week, Microsoft announced it would offer a free Web version of its Office suite early next year, which would compete with Google Docs.And most notably, Microsoft unveiled its Bing search engine in early June, which immediately stopped Google’s search market growth and ate into Yahoo’s. Analysts widely expect a long-awaited deal to be struck in the coming days between Microsoft and Yahoo (YHOO, Fortune 500) for Yahoo’s search advertising business.

Source:CNN

CHICAGO (Reuters) — Microsoft Corp. is willing to invest up to 10% of its operating income in its Internet search business for up to five years, Chief Executive Steve Ballmer said Thursday, as its “Bing” search engine starts to gain ground with Web surfers.Bing – part of Microsoft’s perennially money-losing online services unit – has been winning market share from rivals, according to industry data released this week, but still trails market leader Google by a long way.”Our shareholders, I told them we were willing to spend 5 to 10% of operating income for up to five years in this business, and we feel like we can get an economic return,” Ballmer told a business lunch in Chicago, without elaborating on the timeframe.The new search engine grabbed 12.1% of U.S. Internet searches for the June 8-12 work week, up from 11.3% from June 1-5 but trailing Google Inc.’s 65% of U.S. searches in May.”You don’t go from 8% to 80. You have to be patient,” said Ballmer. “We invested in Xbox for years and now it generates nice economic returns for us,” he added, referring to the company’s popular gaming console.Microsoft reported operating income of 4.4 billion last quarter, which would mean Ballmer is envisaging spending up to 440 million per quarter, or almost 1.8 billion per year, developing Bing.Microsoft does not break out investment in its various projects, so it’s not clear if that is a significant increase on previous spending. Microsoft has continued to invest in Internet projects, even though its online services business is a net drain on cash, losing 575 million last quarter alone.0:00
/01:23Google CEO dings BingBing, fully launched on June 3, is just the opening salvo in Microsoft’s campaign to counter the dominance of Google in the Web-search and related advertising business.The world’s largest software company, which is in talks with Yahoo Inc. (YHOO, Fortune 500) over a potential partnership, has long been determined to play a role in that lucrative space after watching rival Google (GOOG, Fortune 500) take a stranglehold on the market.Ballmer regretted that Microsoft (MSFT, Fortune 500) had not entered the Internet search market earlier, saying that the company understood the technology’s importance, but had not come up with a way to monetize it.”If we could have one do-over I would probably say I would start sooner on search,” said Ballmer. “Sometimes the error you make is what you don’t do and don’t see. Our mistake wasn’t that we didn’t see the technology change coming, we didn’t see the business change coming.”Shares of Microsoft closed down 0.8% at 23.50 on Nasdaq.

Source:CNN

DETROIT (Reuters) — Microsoft Corp’s Bing search engine won more market share from rivals last week, according to new industry data released on Wednesday, but still trails Google Inc and Yahoo Inc.Challenging market leader Google — which in turn is looking to break into Microsoft’s core software market — is a long-term project, said Microsoft chief executive Steve Ballmer.”We have had some very good initial response,” Ballmer said at a conference in Detroit. “I don’t want to over-set expectations. We are going to have to be tenacious and keep up the pace of innovation over a long period of time.”Microsoft (MSFT, Fortune 500) grabbed 12.1% of U.S. Internet searches for the work week June 8-12, according to data released by industry tracker comScore earlier on Wednesday.That is up from 11.3% in the June 1-5 period — the week in which Bing was launched — and up from 9.1% the week before that.For comparison, Google (GOOG, Fortune 500) got 65% of U.S. searches in May, the last full month for which figures are available, followed by Yahoo (YHOO, Fortune 500) with 20.1% and Microsoft with 8%.Analysts and investors are keenly awaiting data for all of June to see if Microsoft can hold onto early gains.Ballmer acknowledged the tough task of beating Google, which he referred to as “a big dog competitor”.The world’s largest software company has long been determined to play a major role in the lucrative Web search market after watching upstart Google take a stranglehold.At the same time, Google is looking to take advantage of its popularity to launch software that competes with Microsoft’s, which has created a new source of tension between the two companies.Microsoft ratcheted up that tension on Wednesday by claiming that Google’s new Apps Sync for Microsoft Outlook software — which allows users to share data between their Outlook e-mail and Google’s online offerings — disables a key function in Outlook.”The installation of the Google Apps Sync plugin disables Outlook’s ability to search any and all of your Outlook data,” Outlook product manager Dev Balasubramanian wrote on a Microsoft blog. “It is also important to note that uninstalling the plugin may not fix the issue.”The problem, though relatively unimportant to users, represents a crucial struggle between Microsoft and Google for e-mail customers.Google’s new product allows business users to continue using Outlook for email and other tasks, but the back-end functionality and data storage moves to Google, instead of residing on a company’s internal servers running Microsoft software.Google acknowledged the Outlook problem identified by Microsoft, and several other issues where its software does not mesh well with others.”We’re working with Microsoft and other partners to help fix these issues and support additional Outlook features like multiple calendars,” said Google Apps senior product manager Chris Vander Mey in a blog post. “We’ll keep you posted on our progress.”Microsoft shares closed up just less than 1% at 23.68, while Google’s fell 0.2% to 415.16, both on Nasdaq.

Source:CNN