07 April 2009

Even Microsoft Needs a Little Stimulus Love

The Microsoft Corporation is, by nearly any measure, the poster child for an efficient and effective business model. Whether or not you like the company or its products, it's tough to argue with the numbers. While the US economy grew just over 1% in 2008 (although it lost over 6% in Q4 alone), and many companies saw net losses last year, Microsoft still posted moderate gains. In 2008, Microsoft posted $60 bn in revenue, an operating income of $22 bn, and a net income of $17 bn. At the end of last year, Microsoft also reported $72 bn in total assets, and $36 bn in total equity. Granted, their earnings may have not been what they have in the past, but the company still netted a significant amount of money last year.

So it's no wonder that some residents of Redmond, WA are very upset about a plan for Microsoft to use $11 million of stimulus money to build a bridge that will connect 2 campuses at Microsoft's headquarters.

Here's the thing. Microsoft is spending $17.5 million of its own money to build the public access bridge, and studies have estimated that Microsoft would account for around 42% of the bridge's traffic. (For those of you mathematically challenged, they're paying about 49% of the bill). So that kind of seems fair, right? Opponents are arguing that while Microsoft's contribution is certainly significant, the public money that will be diverted could be better spent elsewhere.

I understand both sides of this debate. But here's the thing. The porkulus bill that was passed was one big pet project/earmark cesspool, so if you're going to get upset at anyone, be upset at your legislators and senators for voting for the thing (without reading it, I might add). Microsoft is simply doing what it does best; making decisions that are in the best interest of Microsoft and it's employees and investors. In fact, if you're a Microsoft investor, you should be grateful that the company has the common sense to take advantage of savings opportunities when presented to them (including laying off 5000 employees). Maybe the auto industry wouldn't be such a mess if they had the cajones to make tough decisions (curse you, UAW). At least this pet project is being partially funded (almost 50%) with private money and will benefit the community, and is only a drop in the $11 Trillion (that's Trillion with a capital T) bucket. Unlike a certain senator's maglev project.

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