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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

Category: Microsoft
July 11, 2013 at 10:07 AM

Vote: Now what do you think of Microsoft’s plan?

When I held Friday’s poll anticipating today’s announcement of the big shakeup at Microsoft, most respondents wanted to wait for details before deciding whether it had a strong chance for success or not. Now we know, so I’m going to ask again. As the Seattle Times’ Janet Tu reports, CEO Steve Ballmer will…

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Comments | More in Microsoft | Topics: Microsoft, Microsoft reorganization, Steve Ballmer

July 5, 2013 at 10:16 AM

Vote: Microsoft’s reorganization

The word is that Microsoft CEO Steve Ballmer could announce a major reorganization of the company as early as next week. Don Mattrick, who led the division that produces Xbox is already leaving to become chief executive of Zynga. According to BloombergSkype president Tony Bates might be placed in charge of acquisitions and relationships with software developers, while Windows boss Julie Larson-Green is given oversight of hardware engineering for all of Microsoft.

The speculation is a moving target. In early June, Kara Swisher of All Things D reported that a larger role was being contemplated for several executives, including Mattrick, as Ballmer moves to fulfill his promise to make Microsoft into a devices and services company. Now, not for Mattrick, obviously. Last fall, Ballmer wrote to shareholders, “This is a significant shift, both in what we do and how we see ourselves — as a devices and services company. It impacts how we run the company, how we develop new experiences, and how we take products to market for both consumers and businesses.”

Microsoft is trying to catch up in a number of areas and make the shift to leapfrog in tablets and phones, not repeat the mistake it made with search. There’s also an activist shareholder in the background, even though MSFT shares are almost $10 higher than they were three years ago and dominant shareholder Bill Gates would block any activist attempts to control the board. Another issue about the restructuring is how it affects larger employment for one of the biggest employers in the Puget Sound. What do you think?

Read on for some important stories you might have missed plus the haiku…

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Comments | More in Microsoft | Topics: Microsoft, Steve Ballmer

June 10, 2013 at 10:42 AM

Seattle’s tight focus on trade

A Cosco container ship enters Elliott Bay. Cosco is the national flag carrier of China, the world's largest trading nation. (Photo by Ken Lambert / The Seattle Times)

A Cosco container ship enters Elliott Bay. Cosco is the national flag carrier of China, the world’s largest trading nation. (Photo by Ken Lambert / The Seattle Times)

The Trade Development Alliance of Greater Seattle held its annual dinner last Thursday. Gov. Jay Inslee was the keynote speaker. I was on a panel with Len Jordan of Madrona Venture Group and Jeff Frazier of Microsoft, moderated by Bill McSherry of Boeing. Major sponsors were Boeing, Microsoft and Highline Community College. Among those buying tables were the Port of Tacoma, the Port of Seattle, the Port of Everett, Seattle Metropolitan Chamber of Commerce and Washington State Department of Commerce. In addition to public officials and business people, attendees included consular officials of other countries.

It was an evening that attested to the power of trade here, and to this community’s interest in the wider world. Both are big advantages. Gov. Inslee promised the state would do what it could to win the 777X, said Washington would “feast at the table of technology” and touted the increase in cherry exports under the new Korean-U.S. trade agreement as well as the 100,000th Chrysler exported from the Port of Gray’s Harbor. Our panel was put through the paces in predicting such things as China’s growth and Middle East air traffic in 2013. I’ve worked in cities and states that only gazed at their navels, measured economic success in the number of new tract houses built. This is far better.

On the other hand, we live in our own bubble. Washington is a net winner from the trade status quo. The same is not true everywhere. For example, a year after the free-trade agreement with South Korea was signed, the U.S. trade deficit was larger and the promised increase in American jobs hasn’t happened.  South Korea is a currency manipulator, too.

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Comments | More in Aerospace/Boeing, Agriculture, Microsoft, Ports of Seattle and Tacoma, South Korea, Trade

April 24, 2013 at 2:08 PM

Finally, Microsoft gets some (activist) love

Even though the Dow Jones Industrial Average has pulled back today, Microsoft shares are on, what can be described for this staid company, as a tear. As I write, the stock is at $31.76, up nearly 3.8 percent. Back in February they were barely above $27. Shares have been climbing steadily lately, but the biggest reason for the latest goose is the emergence of ValueAct Capital Management as a small but still significant investor. Small because the hedge fund’s $2 billion investment represents less than 1 percent of Microsoft shares outstanding. Significant because ValueAct’s founder and chief executive, Jeffrey Ubben has a reputation as an activist investor.

A former managing partner at Blum Capital Partners and, before that, running Fidelity Investments’ Fidelity Value Fund, Ubben is “known for flipping things around, investing in companies and seeking out board seats and changes in companies it invests on,” writes Mellisa Tolentino on the blog Silicon Angle. According to the Wall Street Journal, “the disclosure revived hopes among some Microsoft investors that an influential shareholder could spur changes to a stock price roughly even with 2002 levels.” The story continues:

It also isn’t the first time a sometimes-activist investor has talked up Microsoft. Also at an investor conference nearly two years ago, hedge-fund investor David Einhorn lauded Microsoft, but said the company was being held back by the management of Chief Executive Steve Ballmer.

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October 1, 2012 at 10:03 AM

Seattle-area companies make top brands survey

Puget Sound companies put in a respectable showing in the 13th annual Best Global Brands report from Interbrand, a consulting outfit owned by the Omnicom Group. It ranks brands the top 100 brands based on “ongoing investment and management of the brand as a business asset.” Among the criteria: Brand strength (“the ability of the brand to secure the delivery of expected future earnings”); financial performance and the role of brand (“the portion of the decision to purchase that is attributable to brand–this is exclusive of other aspects of the offer like price or feature”).

Microsoft is No. 5 out of 100, followed by Amazon.com at No. 20, and Starbucks at 88. Oregon’s Nike placed at 26. The top spot went to Coca-Cola, followed by Apple.

Amazon was the second biggest brand riser, up from 36 in 2010 and 26 in 2011. The survey comments, “…Amazon has much to celebrate. However, its unfriendly stance toward unions, hardball battles to evade sales taxes in certain parts of the U.S., and a highly publicized story about the harsh treatment of workers in a Pennsylvania warehouse last year have put a dent in the company’s image. To leverage the full potential of its brand, Amazon needs to manage the reputation of its business and work to improve employee relations.”

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Comments | More in Amazon.com, Apple, Consumer products, Consumer spending, Costco Wholesale, Microsoft, Nordstrom, Starbucks, T-Mobile

September 28, 2012 at 10:20 AM

Vote: Do we need more H-1B visas?

So if I understand this right, Microsoft wants to offer money to train U.S. workers in exchange for more H-1B visas to bring in more foreign workers. Microsoft says the shortage of skilled technical workers is at a crisis level, yet I often hear from Americans who say they have the skills but have been passed over for a foreign worker who is cheaper. And this doesn’t even account for all the jobs that have been sent offshore.

The H-1B program has long been controversial, but it didn’t matter as much in the 1990s when jobs were abundant. In addition, we should want America to be a magnet for the most talented workers in the world. Seattle is a shining example of how a metro area open to the world benefits. But this is a tougher sell with 12.8 million Americans officially unemployed, and millions more underemployed. It’s a tougher sell as wage stagnation starts to bite even formerly elite sectors.

You tell me, oh residents of Technostan, and I hope you’ll flesh out the argument in the comments section of this blog (beyond “Talton your an idiot” cq):

Should we have more H-1B visas?

Read on for the best links of the week and the haiku:

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Comments | More in H1-B skilled foreign worker visas, Income/living standards, Jobs/Unemployment, Lindsay Lohan, Microsoft

July 20, 2012 at 10:05 AM

Vote: Is Microsoft in trouble?

Microsoft posted a quarterly loss of $492 million. That wasn’t unexpected considering its $6.2 billion write-down of its aQuantive venture. Core business remained strong. A tablet and other new products are on the way. Still, it was the company’s first quarterly loss.

All is not well in Redmond and the stakes couldn’t be higher for the Seattle area. Beyond Microsoft’s anemic stock price and ongoing criticism of CEO Steve Ballmer, there is the Vanity Fair expose by Kurt Eichenwald coming out in the August edition. It describes a deeply dysfunctional company that suffered “a lost decade.”

Dan Gillmore, the longtime columnist for the San Jose Mercury News now writing for The Guardian, and no fan of Microsoft during the antitrust fight, says it’s too soon to count the company out. The lost decade was heavily influenced by the antitrust battle. But “Microsoft is not standing still, despite the corporate inertia, or worse, that Eichenwald capably describes. That said, Microsoft does face an existential crisis, much as IBM did in the 1980s and especially the 1990s. I don’t know if CEO Steve Ballmer is the right leader to steer this mega-ship through the storms; when the company forced out Ray Ozzie, a technology genius and one of the possible heirs apparent, it lost one of its best disruptors of the status quo.”

What do you think? (And don’t forget you can post your views in the comments section).

Is Microsoft toast?

Read on for the best links of the week and the haiku:

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June 26, 2012 at 10:00 AM

Amazon, Microsoft rank high among respected giants || Jon Talton

Two Puget Sound region companies figure prominently in the latest list of the 100 most respected companies by Barron’s, as determined by a survey of institutional investors. Amazon.com ranks No. 4, down two places from its standing in 2011. It’s “highly respected” by 41 percent of those surveyed, and “respected” by another 37 percent. Zero don’t respect the online retailing giant. Microsoft comes in at No. 19, vs. 22 last year.

The worldwide list of largest companies is led by Apple, IBM and McDonald’s. JPMorgan Chase, which lost $2 billion or more on botched trading, fell to No. 49 from No. 14 in 2011. No. 100 is Gazprom, the Russian energy giant. Forty-five percent of institutional investors don’t respect the company, even if Vladimir Putin does.

According to Barron’s Michael Santoli, “Operational missteps, accusations of ethical breaches, and unpopular political stances by leading executives variously weighed on the scores of JPMorgan Chase, Wal-Mart Stores, Pepsico, and Warren Buffett’s Berkshire Hathaway, with Berkshire’s drop to No. 15 from last year’s No. 3 perhaps most poignant, given Buffett’s once-unshakable place in the hearts of professional stock pickers.”

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Comments | More in Amazon.com, Microsoft

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