• Jeff Matthews

50 Million Lines of Trouble

Microsoft Corp. announced a delay in its long-awaited Windows Vista operating system, and people familiar with the matter said the company is planning a major management shake-up in its Windows group. The Redmond, Wash., software company said it will begin broadly selling a version of Vista for consumers in January, compared to its earlier plan of offering the product in time for the holiday selling season. —Wall Street Journal Well, it only lasted about a month.

I’m speaking about the 30 days or so that Microsoft was not everybody’s favorite technology whipping-boy—and it was Google’s turn to find out what happens in America when you disappoint people.

Following its fourth quarter earnings report and right up until last night’s admission by The Evil Empire that the so-called “Vista” consumer operating system would be yet-again delayed, Google had been the former whiz-kid-led outfit everybody wanted to mock.

A week or two after its earnings miss, Google’s CFO made some off-the-cuff remarks that panicked the market; then came the Analyst Day when management recanted those comments; which was followed by the accidental sales guidance release on the web site, not to mention Congressional appearances and Justice Department lawsuits.

The Google-bashing culminated in yesterday’s reaction to Google Finance, the underwhelming knock-off of Yahoo Finance: even Jim Cramer—the man who once declared National Google Day on his show and urged everybody who would listen to buy the stock a hundred and fifty points lower than the current price (and two hundred fifty points below its peak)—dismissed Google Finance on air to the hundreds of thousands of Cramericans to whom his word on Google is, rightly so, the last.

But last night Microsoft disclosed yet another delay in the already-delayed “Vista” operating system launch—and everybody can go back to making fun of Microsoft while Google catches a break.

Last night’s news probably comes as no surprise to anybody in the industry, given the fact that Vista contains 50 million lines of software code and is based on an operating system that’s about as secure as an unlocked Yugo on blocks.

Over a year ago I asked the CEO of a large software company (which had managed to flourish in Microsoft’s shadow despite being viewed as eventual road-kill) about the impact “Vista” would have on his company’s business.

At the time, “Vista”—then known as “Longhorn” for whatever reason—was expected to be the Swiss Army Knife operating system that would finally make his company’s product obsolete.

“It’s not the same Microsoft,” he told me. “They have so much on their plate just trying to deal with virus attacks on their core operating system, it’s hard to get all the new features right.”

He said he still worried about Microsoft, and never counted them out. But, all the same, he felt pretty sure that “Longhorn” (or “Vista” or “Slowpoke” or whatever Microsoft wants to call it) wasn’t going to launch on time—and, when it launched, it wouldn’t run him over.

So far, he’s right.

Jeff Matthews I Am Not Making This Up

© 2005 Jeff Matthews

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations.

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The content contained in this blog represents only the opinions of Mr. Matthews. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. The content herein is intended solely for the entertainment of the reader, and the author.

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