Microsoft goes 'soft' after 26 years

Microsoft goes ‘soft’ after 26 years

The veteran of software technology and development has hit a brick wall for the first time in over two decades, and with the launch of their Windows 8 around the corner...

July 22, 2012 3:15 by M. Aldalou

When we first start to consider the ramifications of the global recession and financial crisis, we attempt to look beyond ourselves.

As employees, we can feel it at times; we empathize with shopkeepers but that is no longer the limitation of the world we live in. Facebook, one of the largest and most valuable companies on earth is tanking; at least that is one way to look at the most anticipated IPO in history being an enormous flunk.

Nevertheless, when we stop to consider these enormous giants like Microsoft, it can sometimes skip our minds that recession (and unfortunate decisions) can also have a negative impact. For the first time in 26 years, Microsoft has reported a substantial loss. Back in 2007, Microsoft made a large purchase, what was considered to be the largest purchase for its time and now it has come back to haunt it.

Microsoft’s purchase of online ad service aQuantive was their ambitious icon, full of hopes to surpass Google’s online presence. Much to the disadvantage of Microsoft, they have failed to do so.

Its failure to compete with Google’s advertising revenue has been described more than once as a miserable let down, and what’s more; Microsoft had invested a lot of money in the deal. A year ago, Microsoft recorded earnings of $5.9 billion and although their online ad business isn’t but a spec of their annual revenue, they still managed to book a $492 million loss in their fourth quarter.

To make matters worse, their online ad division continued to post losses, hitting a whopping total of more than $9 billion since the purchase.

Their next icon of hopeful ambition is their upcoming release of Windows 8 on October 26. Although the buzz circulating this release is big (as a Microsoft related buzz is expected to be), analysts don’t seem to share an opinion that it is unusually large. Microsoft is looking at this release as a reverse of misfortune and it is considered to be their most extreme redesign of its operating system since 1995.

Since the company went public on the stock market in 1986, they have not reported a single loss so what some might call as a hindrance, could also be seen as the end of an era for the software giant.