Thursday, October 18, 2012

Shrinking Profits Thursday

Shrinking profits Thursday for $GOOG and $MSFT, while Newsweek going digital only.

Google Inc. GOOG -8.01% prematurely released its quarterly earnings midday Thursday, reporting that profit declined 20% as total costs jumped and advertising prices continued to slide.

"Falling advertising prices" has been a theme this past year for internet websites, as suddenly somebody realized that nobody reads or clicks on those ads.

Microsoft Corp's quarterly profit fell a greater-than-expected 22 percent, as sales of computers running its Windows operating system dipped and some revenue was deferred ahead of upcoming releases of its core Windows and Office products.

The sharp decline surprised investors, who had underestimated the effect of weak personal computer sales, sending Microsoft's shares down more than 2 percent in after-hours trading.

Is this a surprise, either? We've seen bad PC numbers from $INTC, $DELL, and $HPQ, why not the company that provides the operating system? (And who wants to buy an expensive Surface tablet when you can get an iPad?)

“We are announcing this morning an important development at Newsweek and The Daily Beast. Newsweek will transition to an all-digital format in early 2013. As part of this transition, the last print edition in the United States will be our Dec. 31 issue,” Ms. Brown said in a message co-written with Baba Shetty, the recently hired chief executive.

I went looking at the old Newsweek covers circulating around the web. Wow, that's some history right there!


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