Microsoft loses billions of dollars on its online division, and no one seems to care

(written by lawrence krubner, however indented passages are often quotes). You can contact lawrence at: lawrence@krubner.com

The lack of discipline that has crept into Microsoft is nicely summarized here:

It’s an unbelievable chart. I’ve had to stop writing several times just to look at it again.

I’m certainly not arrogant enough to claim I know how to fix an entire division. But I can look at this and ask some basic questions:

Who in senior leadership has earned promotions or raises during this time? I’m not saying this is impossible, but it does deserve some serious explaining.

What fundamental assumptions are at work here that someone is still protecting?

How would things be different if this division were operating as it’s own company? Clearly whatever leverage and resources it’s getting from the rest of Microsoft hasn’t been of use to the bottom line. If it were it’s own company one of two things would have happened by now: 1) It’d be out of business or 2) It’d be doing things very differently.

What are the counter examples in this division that are profitable? And are their other groups rallying around their success and trying to learn/leverage/borrow from them?

In the last 50 years how many corporations have run entire divisions with this level of operating loss over four years or more? And what was the outcome?

Source