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Showing posts with label Earnings. Show all posts
Showing posts with label Earnings. Show all posts

October 24, 2011

Microsoft Empire Bouncing Back

Finally there seems to be  some Good news for Microsoft! Online operations only lost $494 million this quarter.




Microsoft reported another strong if unspectacular quarter, with revenue of $17.37 billion (ahead of expectations of $17.26 billion) and EPS exactly in line with targets at $0.68.

On the earnings call, the company said that Office is pulling through other products,particularly Lync (the company's corporate IM and messaging product), which was up 25% from last year. 

Microsoft also said that business PC sales were pretty good, with revenue up 5%. Consumer sales were flat, but that's mostly due to netbooks disappearing (or being eaten by the iPad). If you ignore netbooks, sales of "traditional" PCs were up about 14%.
Also, Microsoft has decided that Skype will be counted in the Entertainment & Devices segment, alongside Xbox and Windows Phone, suggesting that it's going to be integrated into those products first.
And in a welcome reversal from recent quarters, the Online division (Bing and MSN) actually CUT its losses from last year, to only $494 million during the quarter (down from $558 million last year). At least it's moving in the right direction now.



Here's how the business did against expectations:

·         Revenue: $17.37B vs. $17.26B expected

·         EPS: $0.68 vs. $0.68

·         Windows: $4.87B revenue (+2% from last year) vs. $5.0B

·         Business Division (mostly Office): $5.62B (+8% organic*) vs. $5.4B

·         Server & Tools: $4.25B (+10%) vs $4.3B

·         Entertainment & Devices (Xbox): $1.96B (+9%) vs. $1.9B

·         Online (Bing & MSN): $625m (+19%) vs. $610m

Unearned revenue: $15.67B vs. $15.7B. This is an important metric because it shows how well Microsoft is doing selling long-term contracts to big businesses.

*Microsoft moved the Forefront security products from Server & Tools to the Business Division, adding about $100 million in revenue. The 8% growth doesn't count that revenue
 

May 14, 2011

Global Salary and Taxes: Infographic

DEATH and taxes, it is said, are the only two certainties in life. One half of that thesis is proved at least by a new report released on May 11th by the OECD. The report splits out the tax burden on employment which is paid by employers (in the form of social-security payments) and employees (as income tax and more social security). France and Germany have some of the most costly tax regimes—with people who earn the average wage taking home just over 50% of their total labour cost. The effect of fiscal austerity, particularly across Europe, has meant that the tax burden rose in 22 out of the 34 countries in the OECD from 2009 to 2010. Meanwhile real incomes for average-wages earners fell in 15 OECD countries. As the second chart shows, these reduced earnings caused by the world recession and subsequent inflation tend to have a much larger impact on incomes.

April 21, 2011

The Unfolding of Yahoo Search Revenue Disaster


During the last two quarters, Microsoft has taken over Yahoo’s U.S. search advertising in return eventually for 12 percent of Yahoos’ search revenues. The red line shows what Yahoo got to keep after paying Microsoft, and the blue line is what it makes off of search before paying Microsoft. That blue line is down 8 percent in the last two quarters You can see the gap between the red and the blue lines in the second chart below. 

Yahoo continues to have consistent  lousy quarters. Revenues were down 6 percent, profits were down 28 percent. What’s more, it’s search partnership with Microsoft isn’t going so great. And the finger pointing is starting.

In a very detailed analysis, Danny Sullivan of SearchEngine Land charts the decline of Yahoo’s search revenues over the past two years. What he calls “net search revenues” (the money Yahoo gets to keep after paying off partners) is down 35 percent from a peak of $551 million two years ago to $357 million. He shows the decline in this first chart below. 

Before the fourth quarter of 2010, Yahoo used its own ad platform. But in late October 2010, it began carrying ads from Microsoft. This was part of the Yahoo-Microsoft deal, where Yahoo largely gave up having its own search technology and ad system, outsourcing this to Microsoft.

As part of the deal, Yahoo agreed to pay Microsoft 12 percent of its net search revenues. The red line reflects this, net revenues that were left after payments went out to Microsoft. This big new chunk of money flowing out is what Yahoo has been calling “headwind” that has accelerated its year-over-year growth decline.

 According to Techcrunch 
"The Microsoft Yahoo Deal  is not working out as planned, and Yahoo blames Microsoft. It’s not quite where it should be yet in terms of its revenue per search. Yahoo CEO Carol Bartz said during the earnings conference call:

"adCenter isn’t yet producing the RPS [revenue per search] we hoped for and are confident as possible."

What is implies is that  Microsoft is under-monetizing Yahoo's properties(search). And organic search results from Bing apparently are too good, which makes people click the paid search ads even less. Even Yahoo’s inflated search market share figures (due to slideshows and other forced search methods) weren’t enough to generate more revenues.