2007 Schools Wikipedia Selection. Related subjects: Companies; Software

Microsoft Corporation
Type Public ( NASDAQ: MSFT)
Founded Albuquerque ( April 4, 1975)
Headquarters United States Redmond, Washington, USA
Key people Bill Gates, Co-founder and Executive Chairman
Paul Allen, Co-founder
Steve Ballmer, Chief Executive
Ray Ozzie, Chief Software Architect
Industry Computer hardware
Computer software
Research and development
Video games
Products Microsoft Windows
Microsoft Office
Xbox 360
(See complete listing.)
Revenue US$44.28 billion (2006)
Operating income US$16.47 billion (2006)
(36.3% operating margin)
Net income US$12.6 billion (2006)
(31.6% net margin)
Employees 71,553 (2006)

Microsoft Corporation, ( NASDAQ: MSFT, HKSE: 4338) is a multinational computer technology corporation with global annual revenue of US$44.28 billion and 71,553 employees in 102 countries as of July 2006. It develops, manufactures, licenses, and supports a wide range of software products for computing devices. Headquartered in Redmond, Washington, USA, its best selling products are the Microsoft Windows operating system and the Microsoft Office suite of productivity software, each of which has achieved near-ubiquity in the desktop computer market. Microsoft possesses footholds in other markets, with assets such as the MSNBC cable television network, the MSN Internet portal, and the Microsoft Encarta multimedia encyclopedia. The company also markets both computer hardware products such as the Microsoft mouse as well as home entertainment products such as the Xbox, Xbox 360 and MSN TV.

Microsoft's name, originally bi-capitalized as MicroSoft or with hyphenation as Micro-Soft, is a portmanteau of "microcomputer software" and is often abbreviated as MS. The company was founded in Albuquerque, New Mexico on April 4, 1975 by Bill Gates and Paul Allen to develop and sell BASIC interpreters for the Altair 8800. After the market saw a flood of IBM PC clones in the mid-1980s, Microsoft used its new position, which it gained in part due to a contract from IBM, to dominate the home computer operating system market with MS-DOS, which stood for Microsoft Disk Operating System. The company later released an initial public offering (IPO) in the stock market, which netted several of its employees millions of dollars due to the ensuing rise of the stock price. The price of the stock continued its rise steadily into the early 2000s. In Microsoft Windows, originally an add-on for MS-DOS, the company was selling what would become the most widely used operating system in the world; Microsoft continued to push into multiple markets, such as computer hardware and television. In addition, Microsoft has historically given customer support over Usenet newsgroups and the World Wide Web, and awards Microsoft MVP status to volunteers who are deemed helpful in assisting the company's customers.

With what is generally described as a developer-centric business culture, Microsoft has become widely known for some of its internal codes of conduct for its employees. One example is the principle "eat your own dog food", which describes the practice of using pre-release products inside the company to test them in an environment geared towards the real world. Microsoft has been convicted of monopolistic business practices — the U.S. Justice Department, among others, has sued Microsoft for antitrust violations and software bundling. The slogan " embrace, extend, and extinguish" is often used to describe Microsoft's strategy for entering product categories involving widely-used standards, extending those standards with proprietary capabilities, and then using those differences to disadvantage its competitors. In addition, Microsoft has been criticized for the insecurity of its software. However, Microsoft has won several awards, such as the "1993 Most Innovative Company Operating in the U.S." by Fortune magazine, as well as maintaining a place on the Fortune 500 list of companies as of 2006.


Product divisions

To be more precise in tracking performance of each unit and delegating responsibility, Microsoft reorganized into seven core business groups — each an independent financial entity — in April 2002. Later, on September 20, 2005, Microsoft announced a rationalization of its original seven business groups into the three core divisions that exist today: the Windows Client, MSN and Server and Tool groups were merged into the Microsoft Platform Products & Services Division; the Information Worker and Microsoft Business Solutions groups were merged into the Microsoft Business Division; and the Mobile and Embedded Devices and Home and Entertainment groups were merged into the Microsoft Entertainment and Devices Division.

Business culture

Photo of Microsoft's RedWest campus.
Photo of Microsoft's RedWest campus.

Microsoft has often been described as having a developer-centric business culture. A great deal of time and money is spent each year on recruiting young university-trained software developers and on keeping them in the company. For example, while many software companies often place an entry-level software developer in a cubicle desk within a large office space filled with other cubicles, Microsoft assigns a private or semiprivate closed office to every developer or pair of developers. In addition, key decision makers at every level are either developers or former developers. In a sense, the software developers at Microsoft are considered the "stars" of the company in the same way that the sales staff at IBM are considered the "stars" of their company.

Within Microsoft the expression "eating our own dog food" is used to describe the policy of using the latest Microsoft products inside the company in an effort to test them in "real-world" situations. Only prerelease and beta versions of products are considered dog food. This is usually shortened to just "dog food" and is used as noun, verb, and adjective. The company is also known for their hiring process, dubbed the " Microsoft interview", which is notorious for off-the-wall questions such as "Why is a manhole cover round?" and is a process often mimicked in other organizations, although these types of questions are rarer now than they were in the past. For fun, Microsoft also hosts the Microsoft Puzzle Hunt, an annual puzzle hunt (a live puzzle game where teams compete to solve a series of puzzles) held at the Redmond campus. It is a spin-off of the MIT Mystery Hunt.

As of 2006, Microsoft employees, not including Bill Gates, have given over $2.5billion dollars to non-profit organizations worldwide, making Microsoft the worldwide top company in per-employee donations.

User culture

Technical reference for developers and articles for various Microsoft magazines such as Microsoft Systems Journal (or MSJ) are available through the Microsoft Developer Network, often called MSDN. MSDN also offers subscriptions for companies and individuals, and the more expensive subscriptions usually offer access to pre-release beta versions of Microsoft software. In recent years, Microsoft launched a community site for developers and users, entitled Channel9, which provides many modern features such as a wiki and an Internet forum. Another community site that provides daily videocasts and other services,, launched on March 3, 2006.

Most free technical support available through Microsoft is provided through online Usenet newsgroups (in the early days it was also provided on CompuServe). There are several of these newsgroups for nearly every product Microsoft provides, and often they are monitored by Microsoft employees. People who are helpful on the newsgroups can be elected by other peers or Microsoft employees for Microsoft Most Valuable Professional (MVP) status, which entitles people to a sort of special social status, in addition to possibilities for awards and other benefits.

Corporate affairs

Corporate structure

The company is run by a Board of Directors consisting of ten people, made up of mostly company outsiders (as is customary for publicly traded companies). Current members of the board of directors of Microsoft are: Steve Ballmer, James Cash, Jr., Dina Dublon, Bill Gates, Raymond Gilmartin, Ann Korologos, David Marquardt, Charles Noski, Helmut Panke, and Jon Shirley. The ten board members are elected every year at the annual shareholders' meeting, and those who do not get a majority of votes must submit a resignation to the board, which will subsequently choose whether or not to accept the resignation. There are five committees within the board which oversee more specific matters. These committees include the Audit Committee, which handles accounting issues with the company including auditing and reporting; the Compensation Committee, which approves compensation for the CEO and other employees of the company; the Finance Committee, which handles financial matters such as proposing mergers and acquisitions; the Governance and Nominating Committee, which handles various corporate matters including nomination of the board; and the Antitrust Compliance Committee, which attempts to prevent company practices from violating antitrust laws.

There are several other aspects to the corporate structure of Microsoft. For worldwide matters there is the Executive Team, made up of sixteen company officers across the globe, which is charged with various duties including making sure employees understand Microsoft's culture of business. The sixteen officers of the Executive Team include the Chairman and Chief Software Architect, the CEO, the General Counsel and Secretary, the CFO, senior and group vice presidents from the business units, the CEO of the Europe, the Middle East and Africa regions; and the heads of Worldwide Sales, Marketing and Services; Human Resources; and Corporate Marketing. In addition to the Executive Team there is also the Corporate Staff Council, which handles all major staff functions of the company, including approving corporate policies. The Corporate Staff Council is made up of employees from the Law and Corporate Affairs, Finance, Human Resources, Corporate Marketing, and Advanced Strategy and Policy groups at Microsoft. Other Executive Officers include the Presidents and Vice Presidents of the various product divisions, leaders of the marketing section, and the CTO, among others.


When the company debuted its IPO in March 13, 1986, the stock price was US$21. By the close of the first trading day, the stock had closed at twenty-eight dollars, equivalent to 9.7 cents when adjusted for the company's first nine splits. The initial close and ensuing rise in subsequent years made several Microsoft employees millions. The stock price peaked in 1999 at around US$119 (US$60.928 adjusting for splits). While the company has had nine stock splits, the first of which was in September 18, 1987, the company did not start offering a dividend until January 16, 2003. The dividend for the 2003 fiscal year was eight cents per share, followed by a dividend of sixteen cents per share the subsequent year. The company switched from yearly to quarterly dividends in 2005, for eight cents a share per quarter with a special one-time payout of three dollars per share for the second quarter of the fiscal year.

Around 2003 the stock price began a slow descent. Despite the company's ninth split on February 2, 2003 and subsequent increases in dividend payouts, the price of Microsoft's stock continues to stagnate as of June 2006.


In 2005, Microsoft received a 100% rating in the Corporate Equality Index from the Human Rights Campaign relating to its policies concerning LGBT ( lesbian, gay, bisexual and transsexual) employees. Partly through the work of the Gay and Lesbian Employees at Microsoft (GLEAM) group, Microsoft added gender expression to its antidiscrimination policies in April 2005, and the Human Rights Campaign upgraded Microsoft's Corporate Equality Index from its 86% rating in 2004 to its current 100% rating, putting it among the most progressive companies in the world, according to the Human Rights Campaign.

In April 2005, Microsoft received wide criticism for withdrawing support from Washington state's H.B. 1515 bill that would have extended the state's current antidiscrimination laws to people with alternate sexual orientations, although some claim they never withdrew support and instead simply were neutral on the bill. However, under harsh criticism from both outside and inside the company's walls, Microsoft decided to support the bill again in May 2005.

During his visit to Waterloo in October 2005, Microsoft co-founder Bill Gates stated, "Most years, we hire more students out of Waterloo than any university in the world, typically 50 or even more."

Microsoft hires many foreign workers as well as domestic ones, and is an outspoken opponent of the cap on H1B visas, which allow companies in the United States to employ certain foreign workers. Bill Gates claims the cap on H1B visas make it difficult to hire employees for the company, stating "I'd certainly get rid of the H1B cap."

Working Mother magazine named Microsoft one of the 100 Best Companies for Working Mothers in 2004 and 2005.

Logos and slogans

In 1987, Microsoft adopted its current logo, the so-called " Pacman Logo" designed by Scott Baker. According to the March 1987 Computer Reseller News Magazine, "The new logo, in Helvetica italic typeface, has a slash between the o and to emphasize the "soft" part of the name and convey motion and speed." Dave Norris, a Microsoft employee, ran an internal joke campaign to save the old logo, which was green, in all uppercase, and featured a fanciful letter O, nicknamed the blibbet, but it was discarded.

Microsoft's logo depicted here, with the "Your potential. Our passion." tagline below the main corporate name, is based on the slogan Microsoft had as of 2006. In 2002, the company started using the logo in the United States and eventually started a TV campaign with the slogan, changed from the previous tagline of "Where do you want to go today?." Like some of Microsoft's other actions, the slogan met its fair share of criticism. For example, in his ThirdWay Advertising Blog, David Vinjamuri states that while "This is gorgeous, touching advertising of the type that wins awards," he ends by noting that the slogan "Only reminds us what we don't like about the brand. Can it."



Since the 1980s, Microsoft has been the focus of much controversy in the computer industry. Most criticism has been for its business tactics, which some perceive as unfair and anticompetitive. Often, these tactics have been described with the motto " embrace, extend and extinguish". Microsoft initially embraces and extends a competing standard or product, only to later extinguish it through such actions as writing their own incompatible version of the software or standard. These and other tactics have led to various companies and governments filing lawsuits against Microsoft. Microsoft has been called a "velvet sweatshop" in reference to allegations of the company working its employees to the point where it might be bad for their health. The first instance of "velvet sweatshop" in reference to Microsoft originated from a Seattle Times article in 1989, and later became used to describe the company by some of Microsoft's own employees.

Free software proponents point to the company's joining of the Trusted Computing Platform Alliance (TCPA) as a cause of concern. A group of companies that seek to implement an initiative called Trusted Computing (which sets out to increase security and privacy in a user's computer), the TCPA is decried by critics as a means to allow software developers to enforce any sort of restriction they wish over their software.

Large media corporations, together with computer companies such as Microsoft and Intel, are planning to make your computer obey them instead of you

Richard Stallman, founder of the Free Software Foundation

Advocates of free software also take issue with Microsoft's promotion of Digital Rights Management (DRM), and the company's total cost of ownership (TCO) comparisons with its "Get the facts" campaign. Digital Rights Management is a technology that gives digital content and software providers the ability to put restrictions on how their products are used on their customers' machines; these restrictions are seen by the technology's detractors as an infringement on fair use and other rights. DRM restricts even legal uses, for example, re-mixing or playing in a slideshow. Microsoft is not the only platform provider who supports DRM, however. For example, Apple Computer has been under fire from the French Government for " FairPlay," a DRM system used to control usage of content downloaded from its iTunes Music Store service. The "Get the facts" campaign argues that Windows Server has a lower TCO than Linux and lists a variety of studies in order to prove its case. Proponents of Linux unveiled their own study arguing that, contrary to one of Microsoft's claims, Linux has lower management costs than Windows Server. Another study by the Yankee Group claims that Windows Server cost less than Linux for those with legacy systems and more for those without.


Older versions of Microsoft products were often characterized as being unstable — versions of Windows based on MS-DOS, and later the Windows 95 kernel from the mid 1990s to early 2000s, were widely panned for their instability, displaying the " Blue Screen of Death", when Windows abruptly terminates an application — usually due to malfunctioning drivers or hardware. In Windows NT/2000/XP Professional, the blue screen is also known as the Windows Stop Message. While less frequent, Windows 2000 and XP are still susceptible to Blue Screens of Death. Computer users not familiar with the division of responsibilities among applications, the operating system, and third-party device drivers sometimes blame Microsoft for problems that are created by third-party software, particularly poorly written and unsigned drivers. Microsoft has consequently announced that it will disallow unsigned drivers in the 64-bit editions of Windows Vista.

The user interface of Microsoft products is occasionally criticized for its inconsistency and complexity, requiring interactive wizards to function as an extra layer between the user and the interface.

It's almost like Microsoft is designing for geeks and Apple is designing for real people

Joe Wilcox, Jupiter Research Senior Analyst

Numerous Microsoft products, most notably Internet Explorer, are seen as being insecure to malicious attacks such as computer viruses. Rob Pegoraro, writing for the Washington Post, says that due to Windows leaving five Internet ports open for various running services, malefactors have an easier time compromising the system. A study conducted by Forrester Research refutes these claims, stating that it found that after a year of studying Windows and several Linux distributions, Windows had the fewest vulnerabilities and that "Microsoft was the only vendor to have corrected 100% of the publicly known flaws during the study's time period." In an article for SecurityFocus, Scott Granneman said that as of 2004- 06-17 there were 153 accumulated security holes since 2001- 04-18 and that Internet Explorer "is a buggy, insecure, dangerous piece of software." Mike Nash, a Microsoft Corporate Vice President, responded to Internet Explorer security concerns in a 2005 interview by stating that the version of Internet Explorer shipped with Windows XP Service Pack 2 gives it security on the same level as its competition. The next planned version of Internet Explorer, 7, is scheduled to feature a security overhaul with anti-phishing and malware prevention technology. In a recent review, PC Magazine's Neil Rubenking commented that the phishing technologies in Internet Explorer 7 Beta 3 were superior to equivalents from McAfee and Symantec. is one of the most popular destinations on the internet. It receives more than 100 million hits per day from across the globe. According to, is currently ranked 16th amongst all websites for Traffic Rank.

Microsoft's New Site in Testing as of November 2006


In fiction

  • in William Gibson's 1984 novel Neuromancer, a microsoft is a small wedgelike piece of software that a human can access via insertion in an implant in their nervous system.

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