Warren Buffett says to be fearful when others are greedy, and greedy when others are fearful.

As Bill Gates is a staunch fan of Warren Buffett, I can only assume that he learned that lesson well and that he also taught it to Ballmer.

Joe Says;
"Microsoft has some insulation because of money already in the bank"
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This is true, and while I basically agree, consider this: Remember in the USA individual accounts are only insured up to 100k, and maybe now up to 250k, by the FDLC. While the gov is currently bailing out the banks, you already see some of them, like AIG insurance back at the troth again, begging for more money. In the end, some of these banks and insurance company may go under, without a lot more taxpayers money. And when they do, they may take a whole lot of Micro$oft money with them. So how MS has its money protected, is at least as important as how much money it has, if not more.

As far as the hiring freeze, we should be used to MS lying to us by now. To put in bluntly, honestly is not a strong point at Micro$oft.

Joe says:
"No company on the planet partners better than Microsoft—and that's one of the most important factors to the company's continued success"
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Yes just ask all the "partners" that bought into "plays for sure." Then there was SCO, most likely another "partner."

"No company on the planet partners better than Microsoft—and that's one of the most important factors to the company's continued success. Affiliates and other potential partners will be harder pressed as the economy slows. Microsoft should show them the money, how they could make more by partnering with Microsoft........, losses can be contained and partners snatched away from Google."
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Ha,ha,ha excellent joke.

First, for chips_b_malroy: Microsoft doesn't keep their billions of held back profits (profits not distributed as dividends) in normal bank accounts. Some is in Money market funds with insurance companies _like_ AIG, and the government will "bail out" those firms to keep such investments solid. Some is in stocks (which have tanked, unfortunate for MS along with other holders of stocks). But, IIRC, lots of it is in USA government notes-- Treasury Bills, and so on, which are "backed by the authority of the government". And whenever the government needs to go more broke to pay their obligations, they simply vote to raise the "debt limit" (as IT JUST DID, to pay for the bailout and another trillion dollars to waste on Iraq and blow on other things not paid for by taxes).

Now for my comment: Joe, I'm a bit surprised that you previously thought MS would come through this recession unscathed, because, when THEIR CUSTOMERS are hurting badly, the customers (business, individuals, and government entities) try to reduce their expenses-- just like Microsoft is doing. But unlike Microsoft, a lot of these customers are nearly broke already. Many States and Cities are looking at huge budget shortfalls, and many homeowners are underwater too.

As just one example, the District of Columbia (Washington DC) just chose to use online Google Apps as a replacement for Microsoft Office-- almost entirely because of the MONEY SAVINGS. And lots of entities which have been using Office are choosing to either (1) stay with the OLD version they already have, spending nothing; or (2) switching to a cheaper alternative-- OOo, or StarOffice, except on just a few PC's which have to keep MS Office "Calc" to assure that they're spreadsheets still work exactly as before.

I think that relatively few are doing Linux migrations, within the USA, but it seems like lots are starting migrations from MS-Office. And those that are KEEPING MS-Office are aggressively waving OOo as a negotiating flag, "We're losing money this year and absolutely can't afford the Enterprise License terms you're offering-- come back with a much lower price next week, or we're switching."

In spite of all their criminal behavior, Microsoft doesn't have total monopoly power outside of retail (where you NEVER see a Linux box at Best Buy, Circuit City, Office Depot, or any of the other "big box" electronic stores). And the big crack in the monopoly armor seems to be MS-Office, which (unlike Vista) isn't pre-loaded on all the non-Apple systems in the stores. When individiual people have to buy a Windoze PC and MS-Office separately, and both are really expensive, while they're feeling squeezed, they often do one of two things:

#1: They buy the PC without full-priced Office, then either download OOo ("good enough", they feel) or cheat Microsoft out of a Sale by installing someone else's copy of "Student/Teacher Edition ILLEGALLY. Or, even worse,

#2: I REALLY can't afford this new PC with the MS-Office I need, so I'm gonna stay with the slow and ugly old PC for another year or two. (No sale at all.)

MS business is hurting with individual home buyers, small business buyers, AND Enterprises. Losing the "lock-in" on Office Suites is financially catastrophic, it's nearly half of MS revenues. At the Enterprise level, Exchange is still nearly untouchable, but loss of pricing power and lock-in on MS-Office is just huge within a recession.
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OT, slightly: Yahoo is really almost as expensive as it was when their stock was $30: Other high-tech companies have also had their stock prices crushed, and MS cash can be used to buy THEM with the same advantages. The hard question, for MS buying Yahoo, is this:

With a policy of "Net Neutrality" appearing as a near certainty in the next USA administration, buying Yahoo and enjoying their current interlock with regulated monopoly ISP providers (in my part of the Country it's "my.att.yahoo.com") simply won't really happen. Does Yahoo ownership really provide much better lock-in than staying with the MSN they've already poured so much effort into?

I don't think it will. If/when Yahoo is re-made into a "proprietary Internet" ghetto of Silverlight garbage, the ISP customers will be TOTALLY free to set their home page somewhere else, with no "two-tier Internet" penalty for having done so.
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OT, Totally: Joe, previewing or posting this comment required me to turn off the cross-site scripting protection of NOSCRIPT. You guys *need* to clean up your code so that it's compatible with safe browsing. (If you want to store the code in a single place for all of zdnet, have it included from that common spot within the server, don't make the client go fishing around to "foreign" URLs for load your script content!)

OK, it works if I allow "ziffdavisinternet.com"

But casual noscript users might not know how to see the full domain name, AND allow it.

@rickst29:
you said: "Some is in Money market funds with insurance companies _like_ AIG, and the government will "bail out" those firms to keep such investments solid."
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AIG is back for a second helping from the bailout already. While I agree with your accessment mostly, I would say, that the recession is still just starting, and nobody really knows at this point how bad it will be. Also, the government at some point may not be able to bail out these firms, if things get really bad. Because the government is bailing out firms by borrowing money, mostly Chinese money. When the day comes, that the government has borrowed too much, what happens then?

Lets hope that never happen to us. MS would be the least of our worries then.

Tip 'o the day: It's called "Live Search" The "Windows" was dropped over a year ago #not withstanding the silly windows logo that they're still using#.

@chips_b_malroy:

I'd like to go almost totally OT from Microsoft, except to note that Microsoft (as a holder of vast amounts of T-Bills and T-Notes) is in the smae position as Dubai and Saudi Arabia and China with respect to the deficit-- the USA is mortgaged to *them*.

I 100% agree that this recession will get much worse before it gets better, and last longer than pundits say. (I feel that it's gonna be like 1973-1974, not a "quicker" blip like 1982, or 1987.)

China is is big holder of new "loans" which cover our deficits, and also tons of "old" loans covering the rest of the "national debt". But so is Microsoft-- and many rich USA citizens as well. Whenever the government "needs" to borrow more, as determined by President and Congress, it just votes to raise the debt limit-- and the Treasury issues more of those "loans" as T-Bills and T-notes. Not counted correctly, though, and on top of this staggering figure, is the money which the government "borrows" from Social Security. That doesn't result in formal pieces of paper to external entities, the government is merely borrowing from a big pile of "cash" which it has stacked up from SSI premiums.

But the problem is, that money is suppoesd to be paid back as reitrement and medicaire benefits. (And even if it wasn't all being "borrowed", there's really not enough of it to do the job.) If you count the obligation to pay out the "borrowed to allow for tax cuts" social security obligations, then even Bill Clinton's best year (which is recognized as a $500 billion surplus on the books) was actually underwater-- though nothing like today's behavior.

When the government "borrows too much", it's just like a regular person with crushing credit card bills: too much of your income (tax revenue) goes to just pay interest on the debt, and you can't afford to pay for things such as running Federal Courts, Paying for ANY National Defense, or doing bailouts, or doing any pork at all. So you turn around and borrow even more, and it snowballs.

But until voters actually CARE about humongous deficits, and stop voting for "tax cuts" without spending cuts, we'll keep borrowing more. And we voters have shown, over and over, that we'd rather vote for guys promising "tax cuts" than guys promising lower deficits.

In the worst case, we do as South American countries do, or Germany did in the Weimar Republic: we declare that all the old "dollars are now worth 1/100 of the "new dollars", and start over. Everyone who owns money or contracts for money, such as retirement benefits paid in dollars, or the government's "T-bills", utterly ruined by an action like this. But those who own gold bars, company shares, and real estate make out well: their share of the governments debt is wiped out, and they still own everything they did before. In Brazil and Argentina this has been done several times in the past without creating TOTAL destruction of the society. (Yeah, some retirees die of starvation, but they don't count.) OTOH, you do remember how the Weimar Republic's problems got "solved", right?

@rickst29 :
I would have to say that you are mostly correct in your appraisal of the current economic situation. Not sure how much MS has in T-bills, as most companies did, or at least did in the past, prefer funding money market accounts. Anyway, Microsoft's 40 or 50 billion nestegg, is a drop in the bucket of the USA debt.

Your example of the Weimar Republic's is a good one, but I think Russia might be an even better one. Yes, out politicians will continue to spend beyond our means. Neither party has any anwsers to stop spending. Ron Paul was the only candidate who addressed this issue, and I doubt he could have done anything about it without like minded people in congress, which there are not.

Quote; "remember how the Weimar Republic's problems got "solved", right?"
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They started with having to pay war debts with WW1. When they could not pay, they simply did the same thing Russia did as well. Just print more money. Which will lead to hyper-inflation, and nobody wanting your currency. This is where the USA is heading when at some point, they cannot borrow enough money, or have to start paying the baby boomers for all the money they have been stealing from them all these years. Thats the nice thing about owning your own printing presses, like the Federal Mint does.

At that point, your money will lose drastic value, and those T-bills, maybe lose most of their value.

PC sellers face bleak Christmas
www.theinquirer.net/gb/inquirer/news/2008/10/22/pc-sellers-face-black-christmas

"PC RETAILERS are having to cut prices and do deals over the next few months if they do not want to be stuck with shedloads of left-over inventory this Christmas, analysts have warned.
Computer sales didn't live up to expectations over the summer and analysts predict shoppers will cut spending even more drastically.".........

Open source will gain during recession
As proprietary software falls behind
theinquirer.net/gb/inquirer/news/2008/10/21/open-source-gain-during

Joe ... you are soooo full of sh#t ... you are now asking for more 'tips and or rumors'; there is a big chance you are retarded (rumor+) - seek help (tip).