Microsoft outlined plans to boost spending on its online businesses Thursday, even as new financial results showed the company's payoff in that area falling short of its expectations.
Fourth-quarter revenue rose to $838 million in the company's Online Services Business -- a 24 percent increase from last year but well below the 37 percent to 41 percent revenue growth that Microsoft had been predicting.
Online advertising is the one area of the company that seems to be feeling the effects of turmoil in the broader economy, said Chris Liddell, Microsoft's chief financial officer, in a conference call with analysts.
Microsoft added this week workflow capabilities to BizTalk Services, the company's platform-in-the-cloud project for SOA and
business process management.
The R12 Community Technology Preview for BizTalk Services, the twelfth version of the project, offers workflow enabling service orchestration from the cloud. These services can connect
to enterprise systems or to systems running anywhere on the Internet.
Featured in R12 are a hosted Windows Workflow Foundation runtime and Web services messaging. Users could, for example, set
up an automated process that uses Web services to provide pricing information to a partner, said Steven Martin, senior director
of product management for the Microsoft Connected Systems Division.
As expected, Microsoft turned in another record quarter -- as well as another record year -- when it reported fiscal 2008 revenues and earnings Thursday. But the performance wasn't enough to cheer investors.
For the fiscal year ended June 30, Microsoft brought in revenues of $60.42 billion and posted income of $22.49 billion, or $1.87 per share. That represents growth of 18 percent in revenues from fiscal 2007, 21 percent growth in earnings, and 32 percent growth in per-share earnings.
However, the year's per-share earnings came in at the bottom of earlier guidance: CFO Chris Liddell had earlier placed full-year earnings between $1.87 to $1.90 per share.
Last week, Microsoft announced its pricing for online versions of SharePoint and Exchange. A Gartner analyst says the move reflects the software giant's willingness to adapt its business model to Software as a Service. For IT executives, the announcement makes it much easier to plan for the cost of ownership of Microsoft products. The pricing model also brings transparency, if not simplicity, to the Microsoft software offerings. That's a departure from its on-premise software, where the cost of seats typically has varied depending on customer's arrangement with the vendor.
Microsoft has released three bundles of fixes and new features for its server products. The "Infrastructure Updates" apply to Office SharePoint Server 2007, Windows SharePoint Services 3.0, Search Server 2008,
Search Server 2008 Express, Office Project Server 2007 and Office Project Professional 2007.
The update for the Office Servers contains more enterprise search features, including a federated search capability which
allows content in other repositories to be indexed. Also included is an administration dashboard and other performance updates,
Microsoft said. The added features were already in Search Server 2008 and Search Server 2008 Express.
Lost amid all the hoopla of the on-again-off-again negotiations between Microsoft and Yahoo is a third player, AOL, which, like Yahoo, is a struggling one-time Internet powerhouse. AOL parent Time Warner has engaged in separate discussions about a linkup with either Microsoft or Yahoo. And they'd like to get a deal done before Yahoo's August 1 shareholder meeting, at which time that company's fate could be decided. According to a Reuters report, Time Warner is attempting to sell or merge AOL with either Microsoft or Yahoo. This isn't the first time this year Time Warner has discussed various link ups with both companies, but AOL had been largely forgotten in recent weeks because of ongoing drama in the Microsoft/Yahoo saga.
In a major strategy shift, Microsoft will focus less on the hard core gamers that have made its Xbox 360 a favorite with that crowd and will instead target a far more mainstream audience. The change is an implicit, if tardy, response to Nintendo's spectacularly popular Wii console, which lacks technical chops but has attracted hordes of casual gamers.
As part of the belated makeover, the Xbox 360's UI, which today consists of sterile "blades" dedicated to various gaming and entertainment experiences, will be replaced with a more personal UI based around player-modified on-screen characters called Avatars.
Microsoft's video game unit has struck a deal with Netflix Inc. and tightened its relationship with a longtime Sony PlayStation ally in a bid to expand the audience for its Xbox 360 game console.
The pact with the movie-rental company will let Netflix and Xbox Live subscribers stream movies and TV shows online to their Xbox 360s, to watch on TVs, starting this fall. Microsoft will simultaneously overhaul the broader Xbox Live service, aiming for some of the populist appeal that has vaulted Nintendo's Wii game console to the front of the market.
Microsoft's software plus services platform, Live Mesh, is now available to anyone in the United States, the company announced Wednesday. Microsoft later in the day changed its position on this and said it was only doubling the number of testers from 10,000 to 20,000. See the update at the bottom of this story.
Live Mesh is Microsoft's biggest bet yet on a strategy known as "software plus services." A combination of client software, services, and developer tools, Live Mesh will let users and developers automatically or manually synchronize data among devices and to the Web, share content, remotely access Internet-connected devices, create Web apps that are accessible offline, and client apps that connect to Web services.
While Microsoft's Hyper-V hypervisor has shipped, the software to manage it won't be available until near the end of the year, according to the company.
In addition, Microsoft says the software, Virtual Machine Manager 2008, would be offered as a stand-alone product unbundled
from the System Center Server Management Suite Enterprise, which was introduced late last year.
The company disclosed on its System Center management blog last week that VMM 2008 would ship in the fourth quarter (between
Oct. 1 and Dec. 31).