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Jul 27, 2007

Microsoft expects more growth outside U.S.

PARIS: Largely lost in the quarterly flurry over Microsoft's financial results is just how reliant the company is on business outside of the United States - 57 percent of its more than $50 billion in total sales over the past 12 months, for instance.

Jean-Philippe Courtois, the Frenchman who runs the software company's corporate machine outside of North America, said Thursday that he expected that figure to keep rising for the foreseeable future, partly because of the heady 25 percent-or-more growth rates coming from about 40 countries in Europe and Asia.

Microsoft has sold 60 million copies of Vista, its operating system software, Courtois said, adding that he was "very pleased" with the adoption rate outside the United States.

Last week, the company reported 15 percent growth for its latest financial year, which ended on June 30.

But Courtois, speaking from Paris before Microsoft's annual meeting with financial analysts in Redmond, Washington, said Central and Eastern Europe and Southeast Asia were climbing far faster.
Courtois identified a handful of other positive trends for Microsoft globally. For the first time in memory, Microsoft's growth rate for computer server software is beating the rate for open-source software, at least for the first quarter, according to private tallies. And the Xbox, the Microsoft game console, is taking market share from Nintendo and Sony in "many countries," he said, though he would not name them.

Courtois pointed out also that some of Microsoft's online services, like Live Mail and MSN Messenger, were market leaders in many places outside of the United States. But everywhere, Microsoft is under pressure from the world's leading Internet advertising company, Google, which is in the process of spending $3.1 billion to acquire DoubleClick, an online ad company.

Online rivals to Google, as well as consumer advocates in the United States and Europe, have complained that the Google acquisition would hurt competition. In Washington, the Federal Trade Commission will rule on the issue, while in Brussels, the European Commission will take up the purchase.

Courtois said Microsoft did not have a direct role in the commission's inquiry in Europe, but he noted that there "is some concern in the media industry" about the concentration of advertising clout in a single company. "The commission and others looking into it have some numbers to check out," he said.

Microsoft's own appeal of its record European antitrust case will be issued Sept. 17. Whatever the fate of the fine - €497.2 million, or $682 million - and others imposed by the European Commission since the 2004 decision, the bottom line is unlikely to be affected; the company has put an amount equal to the penalties aside in an escrow account, pending the appeal.

Courtois also said Microsoft's non-North American growth was "balanced" between large-volume business customers and small and midsize enterprises.

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