Microsoft CEO Steve Ballmer gave a little more information to financial analysts than perhaps he planned. There are two versions of his slide presentation -- one with a slide he didn't present this morning. I downloaded the PowerPoint file, and then noticed it had disappeared from Microsoft's investor website. That was so Microsoft could remove the errant, and quite revealing, slide.
The slide is surprising counter-commentary to Ballmer's opening presentation. He spent much of the early portion of his talk explaining why Microsoft cut the search deal with Yahoo, and why the costs were minimal to both companies. He told financial analysts:
"Economics is where people get even more confused. What happened? What happened? Nothing got bought. Nothing got sold. People expected something to get bought. Nothing got sold yesterday, and nothing got bought yesterday. But, the partnership in and of itself creates economic value. And not just on the future promise, not just on the future promise of improved product, improved share, and improved revenue, it creates an immediate opportunity, essentially, for synergy."
But the slide explains: "We will lose money in first 2 years ($300m total), then start making decent return ($400m steady)."
The slide reveals some information "context -- not for disclosure" that can be seen below. Microsoft expects $600 million to $700 million transition costs, with as much as $200 million in fiscal 2010, which ends June 30. The non-disclosure column breaks down the costs by category.
I won't do analysis on the content today. While Microsoft probably wouldn't want the information released, it's not a disastrous disclosure. I suspect financial analysts will gain more from the disclosure than, say, competitor Google.
Caveat: The slide is working from assumptions that may or may not be true as Microsoft and Yahoo begin to merge search operations. Losses could be considerably less -- or even more.