Microsoft, we can help you cut $400M in spending

We've all been getting lots of practice cutting expenses lately, so perhaps we can lend Microsoft a hand.

In reporting its latest quarterly results, the company last week said it will lower spending by $400 million to $500 million over the next year to weather the downturn.

Chief Financial Officer Chris Liddell said the company already has decided to spend less on fancy new data centers, travel and vendor services.

Also getting trimmed is marketing. Jerry Seinfeld better run to the bank with the $10 million he received for doing those three wacky commercials with Bill Gates.

Liddell also should check the budget of whoever mailed the tech press some slabs of granite last month.

Seriously. Microsoft shipped us granite tiles bonded to a sheet of stainless steel, so we could see how well its new "blue laser" mice work on shiny surfaces. Next time, just send scraps from your campus remodeling project.

That's nickel-and-dime stuff, though. Liddell also said Microsoft is reassessing business plans and "pulling back business spending in lower-priority areas."

Families are having to say no when their kids want a new MP3 player. Is that what Liddell will say to the Zune team?

The latest models of Microsoft's digital music player are very nice, and the software's getting better.

But the MP3 player market is fading, judging from Apple's latest earnings report. It said iPod sales fell 1 percent last quarter, and that was before the financial crisis.

Meanwhile, the Zune still is fighting for a toehold. The growth now is in mobile devices that function as music players, phones and browsers. And to match the latest iPods, Zune needs costly upgrades: touch screens and a developer program.

My guess is there won't be another generation of Zune hardware after the holidays; Zune software and Web services will be folded into other Microsoft offerings.

This comes as Zune's parent organization, Microsoft's Entertainment and Devices Division, struggles to stay in the black while cutting Xbox prices, developing the next console and building a mobile-handset platform to compete with Apple and Google.

On the other hand, skittish investors can pull the plug too soon. Remember Sidewalk, the online city guide Microsoft sold in 1999? Imagine what it could have done for Live Search.

Maybe I'm reading too much into this, but it was ominous when Microsoft pulled the Zune team out of its stand-alone, customized offices near the Redmond Target last summer.

The team is now in a relatively bland, warehouselike building on the old Safeco campus.

Another question from the peanut gallery: What's up with Microsoft borrowing money, issuing bonds, when it has plenty of cash? Too-good-to-be-true loan offers should go straight to the shredder.

Microsoft also could take a cue from families saving money by vacationing close to home. Why not hold more big conferences in Seattle in 2009 and 2010?

Armies of employees are flown around the country for these huge developer and sales events. They rotate among big cities, but lately a bunch are in California, including two this fall in Los Angeles.

Another thought: Instead of echoing Windows Vista's spluttering debut with a fancy-pants launch in New York, how about launching Windows 7 in Redmond?

That would save a few bucks, and it worked pretty well for Windows 95.

Brier Dudley's column appears Mondays. Reach him at 206-515-5687 or bdudley@seattletimes.com.