Microsoft stock buyback pays for Red Couch?

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Christopher Mascis was just here to pick up the red couch. It’ll end up in office 16/1385, he tells me.

But, what was funny was he had a giant smile on his face when he came to the door. We did the usual “hello, how you doing?” bit that everyone does when they meet someone for the first time. He answered “a lot better than an hour ago.”

Why is that? Because Microsoft just announced a $40 billion stock buyback and MSFT has gone up 6% in after-hours trading.

The tech market this week has been mixed. Apple was way up (the MacBook Pros popping up all over Microsoft should have been a big hint that Apple’s sales were going up). eBay is down after delivering an unconvincing story around Skype. Google has headed lower after Yahoo delivered poor results earlier this week, but Google announced results above what analysts had expected, which shows that the online advertising market is doing quite well, just that companies are going with Google rather than putting their money other places.

For the future? Microsoft probably has a few more rough quarters ahead of it. Why? Xbox spending and compete-with-Google spending. Microsoft is pushing out Xboxes — and losing money on each one. They need four Christmas’s to make money on each one (you’ll buy several games a year, the more games you buy, the more profitable consoles become). So, the Xbox team won’t show profitability until 2008. That doesn’t worry me at all and it shouldn’t worry investors either.

But the spend to compete Google isn’t as easy to see where it’ll pay off. Like the guy said in the Bloomberg article above, people have decided on the search engine they are using and switching them is going to prove very difficult. I know, I worked at Microsoft and getting me to try MSN Search took real effort on my behalf.

That challenge is in Ray Ozzie’s hands.

Does this mean anything to PodTech? Yeah, actually it does. First, we’re looking at advertising models. This week tells me that money continues flowing through Google’s veins. Hence going with Google’s advertising network is going to be a safe and predictable way to get some cash flow, which will help PodTech survive long term after the VC cash is gone.

Second, because Microsoft wants in on the online advertising market they are gonna try anything and everything to get back in the game. That means that Microsoft will pay for anyone that can deliver an audience to them. Good for companies like PodTech (we aren’t an automatic winner, but at least there’ll be some money out there to compete for).

Published by Robert Scoble

I help entrepreneurs build their technology business' story, help with getting ready for investors, with other launch plans, and many other strategic things that can help your new startup. Call to talk: +1-425-205-1921 (text first).

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20 thoughts on “Microsoft stock buyback pays for Red Couch?”

  3. Yeah, I have about $4,000 worth right now. Not much, but it does make you feel good to see it go back up.

    Like

  4. Yeah, I have about $4,000 worth right now. Not much, but it does make you feel good to see it go back up.

    Like

  5. I worked at Microsoft and getting me to try MSN Search took real effort on my behalf

    MSN and Google Now complement each other

    It now appears that having TWO VERY DIFFERENT ALGOs – can be quite beneficial for Power searchers

    Highly experience Searchers now realize that CERTAIN TYPES of keywords queries will bring more relevant SERPS on one as opposed to the other and vis-versa.

    Like

  6. I worked at Microsoft and getting me to try MSN Search took real effort on my behalf

    MSN and Google Now complement each other

    It now appears that having TWO VERY DIFFERENT ALGOs – can be quite beneficial for Power searchers

    Highly experience Searchers now realize that CERTAIN TYPES of keywords queries will bring more relevant SERPS on one as opposed to the other and vis-versa.

    Like

  7. “They need four Christmas’s to make money on each one (you’ll buy several games a year, the more games you buy, the more profitable consoles become). So, the Xbox team won’t show profitability until 2008.”

    Huh, you stopped selling XBoxes in 2004? There is no XBox360? I don’t get it? Those that were sold in 2004 would be profitable in 2008, but you did sell some in 2005 and 2006, didn’t you? Aren’t the 360s more expensive?

    “(the MacBook Pros popping up all over Microsoft should have been a big hint that Apple’s sales were going up)”

    I can’t wait for the “MacBooks more popular on MS Campus article”; remember that fiasco from a year ago? That was fun, but this is a good test: I bet you you’re no longer relevant and a similar story won’t pop up. Where are you, Leander?

    Like

  8. “They need four Christmas’s to make money on each one (you’ll buy several games a year, the more games you buy, the more profitable consoles become). So, the Xbox team won’t show profitability until 2008.”

    Huh, you stopped selling XBoxes in 2004? There is no XBox360? I don’t get it? Those that were sold in 2004 would be profitable in 2008, but you did sell some in 2005 and 2006, didn’t you? Aren’t the 360s more expensive?

    “(the MacBook Pros popping up all over Microsoft should have been a big hint that Apple’s sales were going up)”

    I can’t wait for the “MacBooks more popular on MS Campus article”; remember that fiasco from a year ago? That was fun, but this is a good test: I bet you you’re no longer relevant and a similar story won’t pop up. Where are you, Leander?

    Like

  9. Goebbels: the Xbox business model requires four years.

    The first round only had three. That’s why the team cared so much about getting out at the same time, or before Sony got out.

    Why? If you buy a console and keep it for four years you’ll probably buy a couple of games every year. That’s called “attach rate.” A system that’s out there for four years will sell eight games. A system that’s out there for only three years will sell six. The profitability is in the games. The more games you sell the more profitable you’ll be. Most of the profit in consoles shows up in the fourth year of sales. (Ala the PS2, which is selling tons of games right now, and at a great profitability cause the average PS2 user has already bought a bunch of games).

    Also, over four years the cost of making the units goes down so on the fourth year the profitability is very high (which is why Sony is making a boatload of money now on their PS2 systems) cause the cost of goods is much lower than it was in the first year (thank you Moore’s law).

    So, that’s why the Xbox won’t be profitable until 2008. Maybe even 2009. Depending on how sales go after Sony enters the market.

    As for the fiasco a year ago? That was about iPods. Now Apple is a Windows OEM. The fiasco is for Dell and other Windows OEMs cause Apple is taking market share away from them.

    Like

  10. Goebbels: the Xbox business model requires four years.

    The first round only had three. That’s why the team cared so much about getting out at the same time, or before Sony got out.

    Why? If you buy a console and keep it for four years you’ll probably buy a couple of games every year. That’s called “attach rate.” A system that’s out there for four years will sell eight games. A system that’s out there for only three years will sell six. The profitability is in the games. The more games you sell the more profitable you’ll be. Most of the profit in consoles shows up in the fourth year of sales. (Ala the PS2, which is selling tons of games right now, and at a great profitability cause the average PS2 user has already bought a bunch of games).

    Also, over four years the cost of making the units goes down so on the fourth year the profitability is very high (which is why Sony is making a boatload of money now on their PS2 systems) cause the cost of goods is much lower than it was in the first year (thank you Moore’s law).

    So, that’s why the Xbox won’t be profitable until 2008. Maybe even 2009. Depending on how sales go after Sony enters the market.

    As for the fiasco a year ago? That was about iPods. Now Apple is a Windows OEM. The fiasco is for Dell and other Windows OEMs cause Apple is taking market share away from them.

    Like

  11. Aaah, this is the new MS spin; “Now Apple is a Windows OEM.”

    Ha, ha, ha!!!

    You are so transparent and lame. I guess you do buy that idiot Tomi’s argument: every Mac bought is actually a Windows machine, so now the Mac is dead.

    Pathetic.

    And thanks for telling me what attach rate is; for some reason my pants are wet, can you tell me where the bathroom is and how I unzip my pants.

    Like

  12. Aaah, this is the new MS spin; “Now Apple is a Windows OEM.”

    Ha, ha, ha!!!

    You are so transparent and lame. I guess you do buy that idiot Tomi’s argument: every Mac bought is actually a Windows machine, so now the Mac is dead.

    Pathetic.

    And thanks for telling me what attach rate is; for some reason my pants are wet, can you tell me where the bathroom is and how I unzip my pants.

    Like

  13. I thought “attach rate” with the XBox meant you bought Halo and a couple of crap games and never bought another game again because Halo was the only good one.

    Like

  14. I thought “attach rate” with the XBox meant you bought Halo and a couple of crap games and never bought another game again because Halo was the only good one.

    Like

  17. “Xbox 360 is seeing a very large attach rate.”

    Wow, I’m glad you’re comfortable enough to treat me like an idiot but are too dense to read a joke. That’s very warming.

    Like

  18. “Xbox 360 is seeing a very large attach rate.”

    Wow, I’m glad you’re comfortable enough to treat me like an idiot but are too dense to read a joke. That’s very warming.

    Like

  19. Ha,ha,ha! You’re pointing to Live “attach rates”!!!! So what? You used to charge for it and now you give it away! You’re afraid to break out gold and silver!! Downloading old arcade games is not an attach rate.

    I take back my previous comment: my post wasn’t a joke, yours is!

    Like

  20. Ha,ha,ha! You’re pointing to Live “attach rates”!!!! So what? You used to charge for it and now you give it away! You’re afraid to break out gold and silver!! Downloading old arcade games is not an attach rate.

    I take back my previous comment: my post wasn’t a joke, yours is!

    Like

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