Earlier today Microsoft decided it would drop the bomb early by moving its second-quarter earnings conference call to 8 a.m. PST instead of 2:30 p.m. PST.
BoomTown, naturally, had to liveblog the Microsoft event, in which its execs tried mightily to put lipstick on a very ugly pig. It was a good effort, at least.
Microsoft said its financial performance took a major hit, with revenue up only two percent and net income down 11 percent, whiffing badly on Wall Street’s expectations. In addition, the software giant said that it would cut 5,000 jobs and other costs across many divisions over the next 18 months, starting with 1,400 today, pegging operating cost savings at $1.5 billion annually. Perhaps most ominously, Microsoft said it would not give profit and revenue guidance for the rest of the year because of the economy’s turmoil. Apparently, even the smartest of techies have little insight to this very foggy financial situation.
Happy days aren’t here again, it seems.
Still, I am not quite sure what to make of his big, happy smile on Seesmic founder Loïc Le Meur’s face, which went with a story in the New York Times about start-ups cutting costs.
In fact, the whole Seesmic crew is grinning awfully hard, putting a very game face on recent layoffs that cut the staff at the video blog service by more than a third.
As usual, colorful serial entrepreneur Jason Calacanis makes lemonade from lemons–or is it vice versa?–touting cost-cutting at his human-powered search engine start-up and newest venture, Mahalo, almost as much as he touted its prospects when he started it up a year ago with $20 million in funding.
But in a blog post yesterday, Calacanis sang perfectly in tune with the new, decidedly grimmer, times. But BoomTown has videos of when things were sunnier for Mahalo.
As BoomTown and many others in the blogosphere have reported for weeks now (so glad old media outlets have finally discovered the Yahoo layoffs), Yahoo management is working on at least a 10 percent layoff of its almost 15,000 employees.
But, because top execs have decided they need the cuts to have good “optics” for Wall Street, they have instructed managers over the weekend to make sure that all cuts include specific staff reductions, even though previous marching orders only had called for percentage cuts in costs.
The sudden shift is irking many managers I spoke to at Yahoo, who now have long had a modicum of control over their own businesses and feel they are being dictated to by top management who got the company in trouble in the first place.
Today, Google, the Internet’s juggernaut in both power and profits, will release its third-quarter earnings after the markets close.
Investors and Silicon Valley will be closely watching Google’s performance and also be listening carefully to the guidance its executives will be giving, hoping the Web’s most stellar performer of late does not stumble.
If it does, some think it is look-out-below time. And, if it does not, it will presumably be all sunshine and daisies for the sector.
Neither is exactly true.
Kara Swisher started covering digital issues for The Wall Street Journal's San Francisco bureau in 1997 and also wrote the BoomTown column about the sector. With Walt Mossberg, she co-produces and co-hosts D: All Things Digital, a major high-tech and media conference. Read more »
Here is a statement of my ethics and coverage policies. It is more than most of you want to know, but, in the age of suspicion of the media, I am laying it all out.
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