Mircrosoft Falls on Windows, Surface Sales

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July 19 (Bloomberg) -- Bloomberg’s Cory Johnson reports on Microsoft’s soft sales in Windows 8 and Surface tablet, and the impact on their earnings. He speaks on Bloomberg Television’s “Market Makers.” (Source: Bloomberg)

Cory johnson have been falling microsoft four years.

Why did the surface slop so much?

I think you just call me old.

No, no.

Interesting times for microsoft.

Because of the big change to mobile computing.

The big story from this quarter is the slowdown in sales of pc's and how badly that hurt them.

And indeed, windows 8's role in that.

Whether pc sales are bad because windows eight was not well received, the fact of the matter is that sales of windows 8 and the machines are really weak.

That slowdown, mind you, up $4.4 billion in revenue in recent weeks is not nothing, but it is a lot less than it has been.

That is the problem for this company.

Their flagship product, windows, the new release is not catching on.

A lot of other things went ok for microsoft during the quarter, but that was the thing that jumped out.

Most people have never used one of about that is why microsoft is taking a $100 million -- have never used one.

That is why microsoft is taking a $100 million writedown.

What is the problem with the surface?

Have you used one?

Yes, i used one at a time that i needed a new tablets because in a moment of celebration when the san francisco giants won the pennant, i threw my ipad into the air and it smashed into the sidewalk.

There are things that are nice about it, but it is a lot like a laptop.

It is heavier, thicker, a different kind of machine.

To the write-down, i think it is being misunderstood by wall street.

Microsoft was selling the surface, the cheaper one you're looking at right there, for about $500. they lowered the price substantially this week to about $350, depending on the model.

Their inventories probably priced closer to the $500 range.

They're still sitting on tons of inventory, and it will not say how much is directly surface related, and they took a 900 of write-down -- $900 million writedown.

When they chopped the retail value, they had to take that big inventory write-down.

They could have one when $5 billion in inventory still sitting in microsoft or somewhere in the -- they could still have $1.5 billion in inventory still sitting in microsoft or somewhere in the supply chain, but they're not telling.

Here they lowered the price substantially and that may change the game for the servers.

We just came off of a huge announcement . steve ballmer is restructuring the company and a bet big on windows 8. what happened with that?

Microsoft iterations of software, the first one out of the gate is not usually good.

Bachus seems to be the way they do it.

There also -- that just seems to be the way they do it.

There also seems to be a change in schedule of releasing.

The macintosh operating system in just the last year has nearly doubled in terms of share up to 3%. but before we get too excited about the direction of things instead of the size of things, there are more people using windows 8 that are using maxx in its entirety.

-- than are using macintoshes in its entirety.

While we have you here, questions about google as well.

A lot of questions about whether this trend toward mobile technology that we are all experiencing is helping google as much as it potentially should be as the market leader.

What are you kidding?

I'm always wary to connect the dots of various companies.

There is the trend of the problem of the shift to mobile advertising not being high revenue for most companies, including google, then for desktops or laptops.

That being said, there has been a change in the last six months where computer programs will instantly send.

When you load a web page, there is an option going on behind the scenes -- there is an auction going on behind-the-scenes to decide which advertisement will display.

And there are adjustments in that.

The that may be what is going on with google.

This text has been automatically generated. It may not be 100% accurate.

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