Microsoft Is Charging Forward Despite the Downturn
Although Microsoft yesterday reported a 29% drop in quarterly profits on weak demand for its products, the company appears to be charging forward undeterred. As reported in today’s Wall Street Journal, despite a year of declining sales, Microsoft CFO Chris Liddell nonetheless struck an upbeat note on the news, stating "[T]here is some sense we have hit bottom."
Indeed, Microsoft has been on something of a tear of late. Bing, the company’s revamped search engine launched just last month, is garnering accolades and showing signs of ratcheting up Microsoft’s share in the prized search market. Earlier this month, Microsoft unveiled details about the next version of its Office suite of productivity tools, including plans for a free web-based edition of Office to complete with Google Docs. And Windows 7, the next version of the company’s flagship operating system, is slated for general release on October 22. In addition, the blogosphere has been abuzz over renewed rumors of a deal between Microsoft and Yahoo following a report by Kara Swisher on All Things Digital.
All of this activity may be evidence of the strategy Microsoft Business Division president Stephen Elop outlined to Knowledge@Wharton several months ago: “Part of the reason we're here today [at the Wharton conference] is to stake out the position that we're driving innovation more aggressively than we've ever done in the past. That's something, particularly during tough economic times, that we feel is important. Now is the time to double down.”
The software giant seems undaunted by the economic slowdown, seeing it as an opportunity to lay a foundation for future growth. As Elop stated in the Knowledge@Wharton interview, “[N]ow is the time to … make those investments, [so that when the recovery starts] we're in a strong position and can take a share and be more successful than we were in the past.”
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