FryUp: Microsoft and MTRs

Microsoft brings home the bacon, ComCom the regulation

Excelence Yes, that’s what the Braadworsten Brigade calls its Excel demo for Breakpoint 2009. YouTube

Microsoft at a loss

Depending on your point of view, the fiscal figures reported by Microsoft are either grim or good in these recessionary times. They’re making money still in Redmond, in huge amounts — over US$58 billion, and remain nicely profitable at almost US$20 billion. At the same time though, those figures are down considerable on last year and the last quarter looks painful with revenues dipping across the line. That was probably to be expected, but what’s interesting is that the divisions holding up the best are Microsoft’s traditional business ones, Client, Server and Business. With Windows 7 and Office 2010 coming up, that bit of Microsoft’s business should continue bringing home the bacon. That’s to be contrasted with the online services business, which continues to haemorrhage money. Will online ever make Microsoft money? And, what’s happening at the entertainment and devices division? On an annual basis, it’s still turning a modest profit, but lost money in the last quarter this year. There’s no need to hit the panic stations yet at Microsoft, but it’ll be interesting to see if efforts like Bing will plug the holes in the online business. Just buy Yahoo and be done with it, Ballmer. Microsoft revenue declines 17 percent in fiscal Q4

Meaningless MTRs?

We’re about to have mobile termination rates, as well fixed ones regulated by the Commerce Commission, because they’re too high. This is the third attempt at cutting them down, and as you would expect, there’s much resistance from the telcos. Well, not so much from Telecom as from Vodafone. The talk is all about how much of the proposed 7.5c a minute reduction will be passed on to customers but I’d like to stop here and say… 7.5c? That’s nothing: mobile retail calling rates for Prepay customers on Vodafone and Telecom’s networks are advertised as being 89c a minute currently. On account rates can be even higher, and a quick look at Telecom and Vodafone’s sites shows pegs calls at 40-49c a minute on many plans, with hefty penal rates once you exceed your low monthly allocation. In other words, even at 100 percent pass through of the reduced MTRs, the retail cost would drop less than ten percent for Prepay users, who form the largest portion of mobile customers in NZ. Isn’t it the retail rates that should be chopped in half rather than the MTRs in that case? Unfortunately, the Commission can’t touch these directly so it appears to be using MTR reductions as a way to put the brakes on telco profiteering. However, lowered MTRs are likely to hurt Vodafone more than Telecom, as the latter has landline monopoly and can charge its customers what it likes for calls to mobile phones. This is a fascinating struggle, and it’s hard to see through the fog of regulatory war and telco obfuscation tactics, but if you consider that in the UK, the actual cost of making calls to mobile networks is around 0.8 pence, or 2c in the local currency, but MTRs are 4.4 pence a minute, or five and a half times as much, you’ll have to wonder why there’s such high margins.

Stephen Fry in Quantum of Torrents

Stephen needs help collecting copies of House… and look, the music industry is growing while it cries for help against the alleged piracy that has performers starving and begging in the streets. That really reinforces the need for immediate action from the entertainment industry, to pump out further lies about how desperate their lot is. If not, the politicians they’re lobbying will run out of rubbish statistics to use as justification for draconian copyright crimes laws. Link UK music industry economists admit: music industry getting bigger, not smaller

XKCD Estimation


Robert X Cringely

Does Yahoo still matter? The No. 2 search portal has a new(ish) CEO and a brand-new look. But is that enough to keep Yahoo from being garroted by Google or manhandled by Microsoft?

For a while there, I kinda forgot Yahoo existed. This week's news brings the company back with a vengeance.

On Monday Yahoo unveiled a spiffy new home page, its eighth face-lift in 15 years.  Silicon Alley Insider has a slideshow displaying how Yahoo's home page has evolved. Talk about your blasts from the past. It's like going through your old high school yearbook; you can't believe how incredibly dorky everyone looked.

The new Yahoo is a significant improvement — and vastly better than the horrible cluttered mess of the mid-2000s, when Yahoo seemed to be channeling the worst of AOL. I get migraines just looking at those old pages. It's no coincidence that this was when Google started kicking its heinie.

The most significant change, IMHO, besides the cosmetic improvements: the acknowledgement that the world does not begin and end with Yahoo content, in particular the integration with Facebook, Twitter, eBay, and so on. It's like Yahoo suddenly woke up after a two-year coma and realised the world had changed while it was snoozing.

(On a side note: Do you think maybe Yahoo is kicking itself just a little for blowing the Facebook acquisition in 2006? At the time it seemed almost silly to drop $1 billion on a social network aimed mostly at self-obsessed undergrads; now of course, that sounds like a bargain. Terry Semel, wherever you are, please come back home: There are people who'd really would like to pummel you with a sockful of fresh manure.)

Some folks have suggested the redesign is just Yahoo putting on rouge, a pushup bra, and fishnet stockings, and otherwise tarting itself up in an effort to seduce Microsoft, which is — stop me if you've heard this one — in negotiations yet again with Yahoo for some kind of ad/revenue sharing deal.

More likely, though, the timing of the new look has to do with Yahoo's quarterly earnings call. (For those keeping score at home, YHOO revenues are down approximately 13 percent to $1.15 billion, but profits are up 8 percent to about $140 million, thanks to the pink slips that have been flying about Sunnyvale headquarters like confetti on New Year's Eve. Not bad for the middle of a recession, but not good enough for Wall Street, which called the results "mixed.")

This is about public perception. Yahoo wants to push the idea there's a new sheriff in town, and she's making progress — slow, painful progress, but better than sliding completely into the cesspool. So far, nobody's howling for Carol Bartz's scalp they way they did for Jerry Yang's or Terry Semel's — and if they did, she'd probably rip them a new orifice or two.

Will a new home page be enough to restore whatever luster Yahoo once had? In a word, no. But it may keep it from sliding off the map entirely.

As for the on/off/on/off deal with Microsoft, that's a different story. Once you get in bed with Ballmer, there's no telling what might happen next. They may have to call in the team from "CSI: Silicon Valley" the next morning to locate what's left of Yahoo's DNA.

Or to quote the ancient philosopher Woody Allen: The lion may lay down with the lamb, but the lamb won't get much sleep. Sweet dreams, Yahoo.

Does Yahoo matter to anyone other than its shareholders? Post your thoughts below or e-mail me:

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