Microsoft e-mail

Here's an internal e-mail to all employees from Steve Ballmer, CEO of Microsoft. He definitely has cockiness...

From: Steve Ballmer
Sent: Wednesday, July 23, 2008 4:30 PM
To: Microsoft - All Employees
Subject: FY09 Strategic Update

With FY08 complete, I want to discuss my priorities for the year ahead and share my thoughts about the key strategic topics that are on everybody's mind, including Windows, competition with Apple and Google, our software plus services strategy, and Yahoo.

I also have news about an organizational change and a transition in our Senior Leadership Team.

First, I want to thank you for your hard work and the dedication you showed during the past 12 months. FY08 was a milestone year. Our revenue jumped $9.3 billion to more than $60 billion. Operating profit grew 21 percent to $22.5 billion.

These outstanding numbers are the direct result of your commitment to the priorities I outlined last July. A lot has happened since then, but our fundamental strengths, challenges, and strategic goals remain largely the same. Therefore, my priorities are consistent with last year. In FY09 we must continue to:

1. Invest in the right opportunities;
2. Expand our presence with Windows, Office, and developers;
3. Drive end user excitement for our products;
4. Embrace software plus services; and
5. Focus on employee excellence.

By focusing on these five areas, we can continue to grow revenue, increase profit, and expand our market share. These priorities are also critical as we work to address key issues surrounding our business in the coming year:

• Windows: The success of Windows is our number one job. With SP1 and the work we've done with PC manufacturers and our software ecosystem, we've addressed device and application compatibility issues in Windows Vista. Now it's time to tell our story. In the weeks ahead, we'll launch a campaign to address any lingering doubts our customers may have about Windows Vista. And later this year, you'll see a more comprehensive effort to redefine the meaning and value of Windows for our customers.

We also have to drive developers to create rich applications for Windows. With Internet Explorer and Silverlight, we have great tools for creating applications that run everywhere. But we also need to make sure developers have the .NET skills to write unique Windows applications using Windows Presentation Foundation. To keep today's Windows applications alive, vibrant, and exciting, we need both--applications that run everywhere and rich client applications.

• Apple: In the competition between PCs and Macs, we outsell Apple 30-to-1. But there is no doubt that Apple is thriving. Why? Because they are good at providing an experience that is narrow but complete, while our commitment to choice often comes with some compromises to the end-to-end experience. Today, we're changing the way we work with hardware vendors to ensure that we can provide complete experiences with absolutely no compromises. We'll do the same with phones--providing choice as we work to create great end-to-end experiences.

• Business and enterprise: Our enterprise and server business has never been stronger--today we are on the verge of becoming the number one enterprise software company. We need to continue to push on all fronts--mail with Exchange, business intelligence with PerformancePoint, virtualization with Hyper-V, and databases with SQL Server. We have to drive our enterprise search capabilities, our unified communications solutions, and our collaboration technologies. And we must continue to compete against Linux in key workloads such as Web servers and high performance computing.

• Software plus services: Some people think software plus services is all about search. But it's really about changing the way software is written and deployed. The future is about having a platform in the cloud and delivering applications across PCs, phones, TVs, and other devices, at work and in the home. It's also about driving change in business models through advertising, subscriptions, and online transactions. Software plus services is a huge opportunity for us to deliver new value on the desktop and the server to all of our customers. This year at PDC, you'll hear more about our cloud platform initiatives and the next versions of our Live and Online technologies.

• Google: We continue to compete with Google on two fronts--in the enterprise, where we lead; and in search, where we trail. In search, our technology has come a long way in a very short time and it's an area where we'll continue to invest to be a market leader. Why? Because search is the key to unlocking the enormous market opportunities in advertising, and it is an area that is ripe for innovation. In the coming years, we'll make progress against Google in search first by upping the ante in R&D through organic innovation and strategic acquisitions. Second, we will out-innovate Google in key areas--we're already seeing this in our maps and news search. Third, we are going to reinvent the search category through user experience and business model innovation. We'll introduce new approaches that move beyond a white page with 10 blue links to provide customers with a customized view of their world. This is a long-term battle for our company--and it's one we'll continue to fight with persistence and tenacity.

• Yahoo: Related to Google and our search strategy are the discussions we had with Yahoo. I want to emphasize the point I've been making all along--Yahoo was a tactic, not a strategy. We want to accelerate our share of search queries and create a bigger pool of advertisers, and Yahoo would have helped us get there faster. But we will get there with or without Yahoo. We have the right people, we've made incredible progress in our technology, and we'll continue to make smart investments that will enable us to build an industry-leading business.

As I mentioned earlier, I have important organizational news. Today we are announcing that the Platforms and Services Division will be split into two businesses: Windows/Windows Live and Online Services. We are also announcing that Kevin Johnson will leave the company. He will work to ensure a smooth transition.

Since 1992, Kevin has been a key contributor to many of this company's most important achievements. As president of the Platforms and Services Division, Kevin has built an incredibly talented organization and laid the foundation for the future success of Windows and our Online Services Business. Over the last 16 years, through everything from his work as head of the company's worldwide sales, marketing, and services efforts, to his leadership in transforming our field operations and repositioning the company to focus on opportunities in emerging markets, Kevin has played a vital role in this company's success. There is no doubt that his passion and dedication will be missed.

Effective immediately, Steven Sinofsky, Jon DeVaan, and Bill Veghte will report directly to me to lead Windows/Windows Live. In the Online Services Business, we will create a new senior leadership position and conduct a search that will span internal and external candidates. In the meantime, Satya Nadella will continue to lead Microsoft's search, ad platform, and MSN engineering efforts, and Brian McAndrews will continue to lead the Advertiser and Publisher Solutions Group. Both Windows/Windows Live and the Online Services Business are led by a strong group of executives on the technical and business side who have the talent and experience to address the challenges we face and drive the next generation of growth and success.

Looking ahead, I see an incredibly bright future for our company. As I said at the June 27th Town Hall for Bill, we are the best in the world at doing software and nobody should be confused about this. It doesn't mean that we can't improve, but nobody is better than we are. Nobody works harder than we do. Nobody is more tenacious than we are. We're investing more broadly and more seriously than anybody else. Our opportunities to change the world have never been greater.

I look forward to working with all of you as we focus on our five priorities in FY09.

Steve

Fear = $

I saw a great video yesterday that supports Warren Buffet's mantra: "We simply attempt to be fearful when others are greedy and to be greedy when others are fearful."

This video clip is an interview with S&P's Sam Stovall. He cites historical evidence that Consumer Confidence is a bellwether for the stock market. Basically, when Consumer Confidence is low as measured by the Confidence Board, it signals we've reached the bottom or close to the bottom of the market. Recently, the Consumer Confidence Index hit a historical low of 50.1, which is the 5th lowest in history. The lowest was December 1974 which bottomed out at 43.2 However, the S&P 500 returned 37.2% in 1975. Bush's lowest level was March 2003 61.4 By the end of 2003, the S&P 500 had a 28.7% return.

I'm going to start keeping an eye on this index. It's published once a month.

Maybe George Costanza was right. If we just do the opposite, it must be right.

Supplements

A lot of us gym rats are taking supplements. Usually, it means a trip to Namdaemun for protein powder, creatine, BCAAs, etc. I found a website in Korea that's roughly the same price for Optimum Nutrition. Door to door delivery. It'll save you a few hours in the afternoon. =) Most of all, it's convenient.

Some items are still too expensive like fish oil. The Omega-3 sells for roughly double the price in the U.S. =(

How many supplements do I take? You don't want to know.

Or do you?

This is not everything. It's just what I could fit on one shelf. lol


Here's the powder group:


Do you take any vitamins?

The Sky is Falling!

I never thought I'd ever witness one of these, but there was a "bank run" or "run on the bank" here in California. Basically, it means bank customers get scared and withdraw all of their money at once or in a short time. Since most banks invest their funds in long-term investments, bank runs can be devastating as was the case with Indymac Bank. The bank was subsequently taken over by the U.S. government. There are very few banks in the world that can withstand a bank run, except maybe the Bailey Building & Loan. Even George Bailey understands the seriousness of a bank run.

Look at all these people waiting to withdraw their money.





Here's what I find impressive. They are just calmly sitting there waiting for the bank to open. No riots. No protests. No fires. I think Americans might be some of the most orderly customers in the world. lol



They have a good reason to remain calm. The Federal Deposit Insurance Corporation (FDIC) guarantees your money up to $100,000. Anything over that amount is not covered. However, the FDIC decided to give Indymac customers 50% of their money over $100,000. For example if I had $150,000 in my bank account. I would receive $100,000 plus $25,000 (50% of the amount over). Korea has their own version of the FDIC called the Korea Deposit Insurance Corporation (or KDIC). The Korean government guarantees up to 50,000,000 won (about $50,000). In Britain, they have the Financial Services Compensation Scheme (or FSCS) that guarantees up to 35,000 pounds (around $70,000 U.S.)

What's the lesson here? If you have a lot of money, put the money in several banks. Or better yet, invest it. I think this is a great opportunity to buy big bank stocks. When these smaller regional banks fail, where will the customers put their money? Under their pillow? I doubt it. I think most of them will choose a larger more stable bank. Jim Jubak agrees:

My thesis that this conservatively managed bank (USB) will be able to grab market share thanks to troubles at other banks remains intact. Total average loans grew by 12% from the second quarter of 2007. Total average deposits climbed 14% for the quarter. The increase in provisions for bad loans needs to be put in perspective too. Yes, the net charge offs for bad loans climbed this quarter from the first quarter, but we're still talking about an increase to .98% from .76%. Resident home mortgage charge offs remained below 1% at .91% and the charge offs on home equity and second mortgages climbed to just 1.13%. In the conference call the company said it would conserve capital by reducing its expenditures on buying back shares in order to 1) protect the current dividend of $1.70 a share (The yield on July 16 was 7.49%), and 2) have enough cash to make opportunistic acquisitions in a battered financial industry. I like that thinking. As of July 18, I'm keeping my target price at $44 a share by December 2008. (Full disclosure: I own shares of US Bancorp in my personal portfolio.)

Wall-E

Last weekend I saw Wall-E. If you haven't seen this movie, I highly recommend it. It's by the geniuses at Pixar (now a part of Disney). In terms of story, creativity, and production, this film was a joy. Aside from the humor, this movie has a lot of messages. Most of them are critical of our modern society. For example, instead of President of the United States, the position is referred to as the CEO of the United States. In addition, the future is a world where people do nothing except sit in a chair. Everything is brought to them. As a consequence, everyone is overweight. There is also a computer character taken from Stanley Kubrick's 2001. It looks and acts like "HAL."

Finally, before the film begins there is a hilarious creative short.

Here it is in its entirety:

The rabbit is so cute. =)

Barbecue

Summertime means barbecue time in the U.S.

Last weekend, we had a barbecue. My older brother cooked everything. =) I was at the gym.

First, he smoked some ribs and baked some corn bread.

Then, he baked some rosemary potatoes.

He grilled some veggies.

Here's the whole dinner.

At least I went to the market and bought some beer. =)

It was a hearty meal. I have to exercise more...

Oxtail Soup

Okay. I've been home for a little over a week and I've cooked one of my favorite dishes - oxtail soup. Who doesn't need some tail? =)

First, I cooked the oxtails in a large pot for over 4 hours. The really annoying part is skimming. There's a lot of strange crap that floats to the surface.

4 hours later, I added ginger, bay leaves, tomatoes, carrots, onions, salt, and pepper in that order. I cooked until the carrots were close to tender.

Finally, I added potatoes and some V-8 vegetable juice.

Here's the finished product:

Yum. I ate 2 bowls for dinner. =) (Yes. I'm a pig.)