Angry shareholders say Microsoft squanders billions on pointless R&D projects

Welcome to the second article in a series on Microsoft shareholder activism. These posts examine why investors, through the power of the stock price, aren't buying the idea that Microsoft has a great future. In this post, one of the top Microsoft securities analysts weighs in, Brendan Barnicle from Pacific Crest Securities. (To summarize his take, "Yeah a lot of people are frustrated … the stock should have grown.").

[xbotpleasefixme]

if they would just spend that money hiring people to make good products and software they wouldn't been in this mess but just like any big corp. they think just buy up anyone that will be a threat and we will win... but in the end there will always be competition no matter how many people you buy out and you're still stuck with nothing good or new to offer. Either start acting like you care MS and make something worth buying that isn't full of bugs or breaks after 6 months or go away

[lord_of_balrogs]

"By trimming the now-nearly $8 billion annually R&D budget, it is their belief that Microsoft frees up cash to do something truly game changing – like purchasing a mobile carrier. "

But the R&D is the game division, MSN, Zune, stuff. I wouldn't mind if they cut the Zune out as it seems to has failed, but leave the game division alone. And MS defenitly does not need a mobile carrier, other companies have that area locked down, it would result in another failure like the Zune.

[ThanatosDMC]

First of all there are many types of shareholders (how much money they actually invested). If this guy is just talking just for the sake of hits, then no thanks. For all we know he only bought 1 share.... which basically amounts to nothing.

Just like how Jack Thomson whined about that he was a shareholder.

[FantasyStar]

Yes, but the littleman still gets a say!

I'm not too keen on allowing reigns on the BoD yet. I'll hold comments until after Silverlight's reception @ MIX09 (since that's the latest development)

[Le Idiotce]

When MiniMii said shareholders wont bend over for MSs RROD adventure, people laughed.

But it is happening now. Guess who is laughing now.

[zag]

"But the R&D is the game division, MSN, Zune, stuff. I wouldn't mind if they cut the Zune out as it seems to has failed, but leave the game division alone. And MS defenitly does not need a mobile carrier, other companies have that area locked down, it would result in another failure like the Zune."

Not exactly R&D is wasted money unless you turn it into a return.

These guys are the big boys the second guy owns $500,000USD+ of MS shares, these guys buy shares to make money not have it wasted the 360 project is wasting money for these guys as it's never given a return for the amount spend, R&D projects are a waste of money unless they can give a bigger return than what got put in for the R&D.

See all the companies they are talking come up with say a program that will edit photos in a new and different way like photosyth and then let people do something with those photo for example.

Most of those companies will be doing projects that help Windows or Office or PC cloud space which is why they are talking about ADs as MSN uses ADs to return a profit, where as Windows needs to make solid sales for a return same for Office.

Most of the biggest buyers are companies not the end home user, I mean a bank might buy 500,000 window lics for 1 office building then add extra lics for each branch etc.

So it really adds up, but mobiles is the next big market really it's expected there to be 3 billion mobiles live around the world by 2010 which is why these guys are saying if MS buys a mobile company a small segment say 1% = is like 30 million mobile users that you make cash off every month.

look at blizard get 30% of it's yearly profit just from WoW subscribers alone.

Though I have to agree with these guys MS won't be going away but it is destroying it self with consoles projects etc to be honest the Xbox project was the most stupidest thing MS could have done it doesn't offer anything for their PC user base or company anything really.

[SL1M DADDY]

They should have never brought out the Zune and instead put the money into R&D for the 360. Maybe that way the RROD issues would have never taken place and saved some face for MS. I have a Zune so don't hate me but to be honest, it is nothing in competition with my iPod Touch. Apple just seems to have that market pretty secure and for MS to even bother was failure from the get-go.

[cyclindk]

I knew it, Gates is experimenting with time traveling ostriches again... YOU WILL NOT SUCCEED!!! I shall foil your evil deeds with my dying breath!

[godofthunder10]

the zune is the reason of the division not making the profit it's suppose to.

[xabmol]

lol l rof ofl lool ll lol ol

[zag]

The xbox div hasn't had any money either
the Zune 1/2 from what I've have already been canned.

MS has gotten rid of all the game studios they did buy.

I'm fairly sure the 260 won't go another round MS needs to focus on it;s main markets the game div isn't a main market for MS.

[sukru]

MSR literally improves many key computing technologies (like web mining, speech, user interfaces, computer graphics, and so on). I know, since I'm a graduate student, and many of the competitor papers are published by MSR.

Healthy competition is always required for advancement. However currently people are more concerned about their pockets, than the better good.

[Gerry Mark II]

Uh oh, Microsoft shareholders are pissed with M$ wasting cash on the gaming devision.

Looks like its time to pack the bags and leave before theres a lawsuit.

[ASSASSYN 36o]

I have officialy given up zune and will be purchasing an ipod touch soon. But the 360 is still heaven never no side switching there.

[xabmol]

We all know:

PSP > iPod > Zune

Unless you need 30+ gigs of music all the time. But then again carrying an extra Pro Duo isn't exactly difficult.

[PeptoBismol]

i'd be pissed too

[Godmars290]

using resources from a competitor, and still came up with RRoD on the 360 they need to put more, not less, into it.

[Gobuz]

They refuse to fix the issues with Vista and pump money into advertising and move on to Windows 7, it's very irresponsible.

And dare i say it, why not put some of that money into the Xbox to fix the rrod and e74 problems? Microsoft is always looking for the next $ rather than fixing their problems.

[scarslasher]

Because Gates is the goddamn Batman!

... it had to be said.

Those that don't get it should watch The Dark Knight.

[ultimolu]

...That's not a good sign.

[zonetrooper5]

Vista is getting a SP2 before Windows 7 is being released which should improve Vista even more.