While handicapping just how well the long-awaited Vista software might do has become the default story line for
recently, the bigger and more important long-term curiosity concerning the company and, quite possibly, the nature of business at large is playing second fiddle.
To wit, at root and in essence: Do even the best mammoth companies have but a single, narrow competency?
Not that Vista sales aren't vitally important -- at least in the short run. But
weighed in recently with the typical in "
": Even though many are grumpy about having to buy Vista, they will lay out money for the operating system upgrade to get the cool new features. And
is probably right.
The New York Times
future to the quick by
why the company's online unit has "drifted dangerously off course."
Let's keep wishing we had a nickel for every Vista article that has graced the bottom of a bird cage in the past couple weeks. But considering the dubious nature of the modern software business and the (forgive me ahead of time, it's early) dandiness of future potential online, when it comes to Microsoft's ultimate future, let's focus our attention on why the following is happening and if anything can be done to rectify it:
Over the last year, Microsoft's online properties have lost users in the United States. The billions of dollars the company has spent building its own search engine have yet to pay off. And amid a booming Internet market, Microsoft's online unit is losing money.
The question the
article poses is one that this sort of article almost always does: Can one man turn things around? Given the number of times in business journalism history this question has been asked, you'd a-thunk more of these people would have succeeded.
But it's always interesting to the reader, if not generally helpful to the investor, to see an issue through the eyes of one person. Here, Steve Berkowitz is charged with turning around an ocean liner on a dime. If nothing else, he has the metaphors down.
He speaks about how, in his former incarnations at smaller companies, he was effectively in a row boat and could put an oar in the water to change direction. Now he is on a cruise ship and has to call down to the engine room.
Finished with his nautical metaphors, Berkowitz moves on to something more important: a direct and honest statement. He rightly says that Microsoft lost ground to
because it was stuck in its own past, "too enamored with software wizardry."
As we have seen too many times in business history, even mammoth companies can have narrow competencies. They are often too wedded to the past and too cumbersomely structured to change. This might be the case with Microsoft. It was working on glitzy programming when MSN might have been kept relevant through a simple push toward search programming. And hasn't Microsoft been working on Vista since just after Prohibition ended?
But the first step in expansion is an honest assessment of faults, and here you have one on a silver platter. Past that, Microsoft, as many of you know, is creating an online service that captures the spirit of an operating system.
It is named Microsoft Live ... but Berkowitz, in another bit of honesty, said he has no idea if the name is going to stick.
The Business Press Maven is a fool to do your dirty work, but let me make this clear: This possibly no-name product is considerably more important to Microsoft's long-term future than the one named Vista, which is going to be the focus of the business media for the next little while.
Speaking of overwrought focus, readers know how critical I have been of how the business media (mis)handles the Christmas shopping season. There is the tunnel-vision focus on Black Friday, as if it were a relevant factor in the seasonal profits (even if companies do sell a lot then). Another problem for investors is that all the focus on shopping makes it seem as if the retail sector is going to move en masse. But many of the most significant moves for investors come in individual situations, in the stocks that move against -- or further -- than trends.
On this note,
Women's Wear Daily
this morning that, if it is to be believed, marks a significant shift in Japan's retail environment. Consumers there are becoming less focused on status, more discreet and happier with domestic brands. This means that no matter how many shoppers are interviewed foraging at sales stateside in places like
, these companies may be faced with challenges over the luxury-buying Japanese consumers who were so much a part of what they did.
Are the Japanese really bypassing the temptation to buy luxury goods? Only time will tell. But the economic consequences of that most human tendency -- the act of giving in to temptation -- is not spoken about a lot.
, from back a couple of weeks ago in Slate.
And speaking of temptation, the
. For those of you who work too hard to even read an article about sex, I'll provide the answer: Don't worry.
A journalist with a background on Wall Street, Marek Fuchs has written the County Lines column for The New York Times for the past five years. He also contributes regular breaking news and feature stories to many of the paper's other sections, including Metro, National and Sports. Fuchs was the editor-in-chief of Fertilemind.net, a financial Web site twice named "Best of the Web" by Forbes Magazine. He was also a stockbroker with Shearson Lehman Brothers in Manhattan and a money manager. He is currently writing a chapter for a book coming out in early 2007 on a really embarrassing subject. He lives in a loud house with three children. Fuchs appreciates your feedback;
to send him an email.