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).
Scobleizer 