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Angry shareholders say Microsoft squanders billions on pointless R&D projects

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Eóin:
Expenditure on R&D is about the only way to ensure longevity. It would surprise me greatly if long-term investors were truely complaining. If you want to try and gain a quick profit invest in high risk and not the guy who holds the monopoly. He isn't going to risk it over some investors short term gamble.

zridling:
Good points. Shareholders want one thing after putting in money: their money back and doubled! Spend any time listening to the business channels and those people have no clue about tech. They see only one side: how much money did you make for me today?

Dormouse:
Expenditure on R&D is about the only way to ensure longevity. -Eóin (February 11, 2009, 07:10 PM)
--- End quote ---

To the extent that this is true, investors are still left with the problem of deciding whether the R&D is going into a bottomless pit that will never produce anything worthwhile or whether it will pay off in the end. History shows a lot of big and very profitable (at the time) companies developing vanity R&D progs that seemed to add to their prestige within the community but never developed business gains in the end - and those companies eventually shrinking as their cash streams dried up. Investors are very aware of this and alarm bells ring if they see a company of this sort with high R&D - their problem is that they very rarely have the info or expertise to know if the R&D being done is really targetted at the medium/long-term interests of the business.

In practice, one of MS's most common strategies has been to buy in new companies and technologies rather than develop its own, and most of its profits have come from establishing and exploiting monopolies. And a fair bit of the development in its own products has come from copying ideas from competitors.

cranioscopical:
They see only one side: how much money did you make for me today?
-zridling (February 15, 2009, 04:09 AM)
--- End quote ---
I take exception to the 'only'.
As for the rest, damn right, we're shareholders not philanthropists!
If there is a concern, shareholders must speak out.
It's then up to management to make its case for investment.
Profit today, or profit tomorrow (even short-term loss)... make a good case and shareholders listen.

40hz:
They see only one side: how much money did you make for me today?
-zridling (February 15, 2009, 04:09 AM)
--- End quote ---

As for the rest, damn right, we're shareholders not philanthropists!

-cranioscopical (February 15, 2009, 11:32 AM)
--- End quote ---

Sounds more like you're a speculator rather than investor with a comment like that.

It's very dangerous to make the old 19th-century capitalist argument that a business's activities must be divorced from any consideration of social responsibility beyond what furthers it's own profitability.

That path always leads to war. :(

(BTW: I'm a shareholder, but I have no problem with philanthropic endeavors on the part of the companies I invest in. I view it as a reflection on character and integrity of its management.) ;)

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