Word: microsoft
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...bets in growth industries--the bigger, the better. "If you can't bring a $100 million business plan to the table, they're not interested," says Alec Saunders, a Windows programmer who recently quit after nine years at the company. Stung by a slowdown in corporate IT spending, Microsoft made a major play for our living rooms and pockets, with mixed results. It sank billions into the video-game business (Xbox and its soon-to-be-announced successor, Xbox 2), the cell-phone business (partnering with longtime ally Intel) and something called smart personal object technology (SPOT), which uses...
...been mixed. With its price slashed from $179 to $149, way below cost, the Xbox is on course to overtake the hallowed Sony PlayStation 2 as the top game system in North America. But Sony holds a strong lead in sales of games, which is where the money is. Microsoft has created three flavors of Windows for cell phones, but none have caught fire. "Windows is just a lot more than a cell phone needs," says Simon Yates, an analyst for Forrester Research. And the clunky SPOT watch--a derisive critic said wearing it is "like having a golf ball...
Like a kid with a $100 bill in a penny-candy store, Microsoft has been trying too many things at once, critics have long charged. To keep the company focused, Ballmer sliced it into seven supposedly equal and semiautonomous product groups, each with its own CFO. Two of those groups--Windows and Office--account for 62% of revenue and the lion's share of profits. The others deal with mobile devices, business services, entertainment, the Internet (MSN) and server software. Those last two are marginally profitable; the others are optimistic bets on the future. Says Jupiter Research analyst Joe Wilcox...
...even within Microsoft some say the seven-way split is unwieldy. Robert Scoble is the most widely read of a new wave of Microsoft employees who have been allowed to write freely about the company in online journals, or blogs. His blog, Scobleizer, has repeatedly called for the company to voluntarily do what the Justice Department couldn't compel--split into separate, nimbler companies, a.k.a. Baby Bills. (Gates is vehemently opposed to the idea...
...Microsoft appears to be going through a mid-life crisis--buying flashy toys and having prolonged bouts of soul searching. Take this piece of dissent from a rank and filer: "The products are there. The marketing is not. Gates and Ballmer have been our salespeople for so long, but we need more voices out there selling our products." Even the executive suites are not immune to mea culpas. "We need to be more predictable to our customers," says vice president Johnson. "We need to make it easier to do business with...