Barry & All,
Microsoft Says It Will Lose Millions On Ventures
Monday July 28 10:06 AM EDT
SEATTLE - Microsoft will lose hundreds of millions of dollars" on interactive media ventures in the year ahead, Group Vice President Pete Higgins said during a meeting with analysts.
But he said that losses are declining in the startup ventures.
He said the company is tightening the screws" to keep costs down, but he was confident the company was in all the right areas with its Microsoft Network online service, Sidewalk local entertainment product and Web sites focusing on travel, investment, autos and gaming.
Higgins said MSN, the No. 2 on-line service behind America Online Inc., has more than 2.3 million subscribers, and the company's MSNBC news joint venture has more than 1.2 million unique users each month.
Ballmer said the company would stick with the interactive businesses even though they may continue to lose money through fiscal 1999.
If we do it right we'll figure out how to make money over time," Ballmer told reporters outside the meeting late Thursday.
Ballmer also said Internet Explorer version 4.0 was on track for final release in September.
Chief Operating Officer Bob Herbold said marketing expenses would rise beyond last year's level of 9.5 percent of its $11.4 billion in net revenues, and product support costs could rise "significantly" above last year's 3.3 percent of revenues. We're going to have to spend some money next year," he said. That's going to drive those numbers up a bit." Microsoft also plans to boost research and development spending to $2.6 billion in fiscal 1998 from $2.2 billion in the fiscal year that ended in June.
Best regards,
Arno
[P.S. Barry - I didn't make this up - honest!!!]
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