$145 Mil Microsoft’s data center support costs for Yahoo deal

Seattletimes blogger Brier Dudley has a post on a slip at Microsoft disclosing the Yahoo deal.

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July 30, 2009 at 10:03 AM

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Microsoft slip? Return on Yahoo deal, costs revealed in confidential slide

Posted by Brier Dudley

A particularly interesting slide was released at Microsoft's analyst meeting. It included "context" about the Yahoo deal and was marked "not for disclosure."

In other words, the slide had the secret internal analysis of what the Yahoo deal means to Microsoft, including details that weren't revealed in yesterday's announcement or today's presentation to analysts.

It was included in the slide deck briefly available for download from Microsoft's investor site but wasn't shown during Steve Ballmer's speech.

Among the details:

"Net: We will lose money the first two years ($300m total) then start making a decent return ($400m steady state)."

Microsoft also expects total transition costs of the deal to be $600 million to $700 million ("up to $200m could hit us in 2010"), according to the slide.


For the data center audience if you zoom in on this slide you can see how much the data center costs are to support the Yahoo search deal. The third line is the GFS COGS/Support of $145m.



What is GFS?

Global Foundation Services (GFS) is the engine that powers Microsoft’s Software Plus Services strategy. We focus on smart growth, high efficiency, and delivering a trusted experience to customers and partners worldwide.

The GFS leadership team is committed to delivering the strategy and the foundational platform for the company’s Software Plus Services infrastructure worldwide that supports our Online and Live services such as MSN and Windows Live, communications and collaboration services, and over 200 additional enterprise services and Web portals. Helping to mindfully shape the next era of computing, the senior leaders in GFS hold over 80 US technology patents and have a combined total over 130 years of industry experience in building and managing infrastructure technology networks, security, product development, and global operations. Their backgrounds include expertise in industrial, electrical and mechanical engineering, power and cooling architecture and design, research and development, and business operations and administration.