Forbes/Computing: Microsoft’s Midlife Crisis

“The crowd at the Georgia Dome loves it, but even Ballmer’s
booming voice can’t mask the disturbing truth: Microsoft is slowing
down. It is bigger, more lumbering and less profitable than it was
five years ago. Its sales are up 73% in five years, but profits are
up only 30%. Payroll has doubled in the last six years. In the
fiscal year just ended, sales rose only 8%, the first time the
company has ever reported less than double-digit growth.

“In the dog years of Silicon Valley, Microsoft, at 30, is in
advanced middle age. The company relies on Windows and a suite of
desktop applications–products released a decade ago–for 80% of
sales and 140% of profits. Newer products–the Xbox videogame
machine, the MSN online service, the wireless and small-business
software–collectively have racked up $7 billion in losses in four

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