Is Microsoft's (NASDAQ: MSFT) Windows Vista computer operating system really that bad? According to PC World, the five-year, $5 billion operating system from the world's largest software company was the tech industry's "worst disappointment of 2007." Ouch.

Although a statement like that will surely get readers fired up on both sides, users of the Vista operating system have to ask: is it really that bad? Although many of the changes in the Vista operating system are "under the hood" and not really all that recognizable to the average PC user, the brunt of criticism about Windows Vista is the 5 years and nearly $5 billion spent on the operating system. And so the question is asked: is this the best Microsoft could do?

Sure, the requirements of a PC to run Windows Vista at optimum speeds are quite a bit higher than from the older Windows XP, but that means Windows Vista on recent PCs will perform much slower than on brand-new machines. Is that a fault? Depends on your point of view. How about the non-compatibility of older software with the newer Vista operating system? Is that a disappointment? Perhaps, perhaps not. How about the costs for Windows Vista outside of having it installed on a newer PC? $199 and up -- is that too high of a cost for what is being perceived by many customers and reviewers as a "minor upgrade?" What's your take?

[Via Engadget]

[Disclosure: I own MSFT shares as of 12-18-07]

Microsoft Corp. (NASDAQ: MSFT) today reported outstanding third quarter results that handily beat Wall Street expectations.

Net income was $4.29 billion, or 45 cents a share, compared with $3.48 billion, or 35 cents, a year earlier, Sales surged 27 percent to $13.8 billion. Analysts had expected profit of 39 cents and sales of $12.57 billion, according to Thomson Financial. Shares soared over 9% in after-market trading.

Of course, the world's largest software maker, which until now was in Wall Street's dog house, couldn't have been more pleased. "This fiscal year is off to an outstanding start with the fastest revenue growth of any first quarter since 1999," said CFO Chris Liddell, in the earnings release. "Operating income growth of over 30% also reflects our ability to translate revenue into profits while making strategic investments for the future."

So does this mean that Wall Street is now going to get off Microsoft CEO Steve Ballmer's back about the billions the company is spending to catch up to Google Inc. (NASDAQ: GOOG)? Not very likely. One quarter does not make a trend even with its recent deal with Facebook.

But there is plenty for investors to like in the quarter. Vista sales seemed strong and the company hasn't been aggressively cutting xBox prices which has helped profitability, RCM Capital Management's Walter Price told Bloomberg News.

There is one perplexing side to the strong tech results this earnings side. If consumers are so worried about the future, how come they are willing to buy things like the Xbox, Vista and Apple Inc.'s (NASDAQ: AAPL) iPhone. Aren't they worried about housing, energy costs and life in general? Maybe they are so focused on their tech toys that they don't care about the rest of the world. Who knows.

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Shares of Apple, Inc. (NASDAQ: AAPL) were down as much as $2 during normal and after-hours trading yesterday after the company announced the delay of Leopard, its new Mac operating system. The company explained that Leopard will now be out in October, in time to capture the all-important Christmas sales for the Mac.

The reason given for the delay is Apple's focus on delivering the iPhone in time for a June release. The company took several software engineers off the Leopard project to help finish the software necessary for the iPhone. The iPhone will be the most sophisticated hand-held device on the market and therefore, software intensive. Apple basically made the choice of which product, Mac OS or iPhone, is more important for a "timely release". Obviously, iPhone is the winner.

The financial implications for Apple on the Leopard delay are negligible. According to Goldman Sachs analyst David C. Bailey, the sales of Leopard being delayed could cost Apple about $75-100 million in the September 30th quarter. Those revenues should be recaptured in the December 31st quarter as long as Apple ships Leopard in early October. Overall revenue expectations for the quarter ending September 30th are about $6 billion, so the delay should not affect the earnings for that quarter.

The gossip on the Street will be at a minimum as Microsoft Corp. (NASDAQ: MSFT) had a delay "in the years" for Vista as opposed to Apple's "delay in months" for the Leopard. Nonetheless, some will attempt to make this appear as bad news.

Apple shares did begin to bounce back in late trading as the revenue impact is quite minimal.

Georges Yared is the CIO of Yared Investment Research

On the technology curve the leading edge is dedicated to the 'early adopters' who buy the latest gadget no matter what the cost is. These people are pretty useful because they act as an early 'heads up' group. They filter through upcoming technology and give us a hint as to what is a useful device or not. The early PDA users suffered through awkward hand-writing technology, and early computer users pushed through text-based prompts for the rest of us. A look at which companies are adopting them though, and the risk therein, can be useful for investing purposes.

Smart Money recently published a list of five gadgets not to buy and gave its reasons for consumers to avoid it. Of the five, Sony Corporation (ADR) (NYSE:SNE) and Microsoft Corporation (NASDAQ:MSFT) got dinged pretty hard by the article due to products of their own and their close relationship to others.

Microsoft joined the rest of the BloggingStocks universe today, closing down significantly. For MSFT, losing 57 cents took the stock down 2.4%, to $23.15, and it was despite an opening bell spike.

None of the market seemed to be much affected by individual company news today, although there was a lot of buzz today about Mr. Softie, with a number of MSFT watchers eager to see what Steve Ballmer will say tomorrow morning in his uncharacteristic chat with investors. And later this afternoon, news of pricing for Microsoft Vista ($450 is the word on the 'net) had lots of bloggers biting, wondering whether it was worth your while to pay more for your operating system than your computer (despite the bells and whistles everyone's raving over). Ryan Block at Engadget muses, "when you consider the fact that the single-license full install retail MSRP of XP Pro is still $300 US, it's not too drastically unrealistic. Don't get us wrong, we're not exactly endorsing snapping up operating systems that cost more than the machines they run on but, you know, it is Ultimate freaking Vista, dude."

The reports on Office Ulimate MSRP: $679. That's some expensive PowerPoint slides. Maybe I should sign up for pay-as-you-go. Dude. And that brings up an excellent question: if the geeks are willing to pay, will corporations follow suit?