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Microsoft pushes back Office 2007 release

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CIOL Bureau
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By Daisuke Wakabayashi






SEATTLE  - Microsoft Corp. said on Thursday it will delay the release of
its Office 2007 business productivity software to improve product performance in

the latest setback for the world's largest software maker.






Microsoft said it will now aim for a launch of Office 2007 to business customers
by the end of 2006 rather than an earlier target of October. Microsoft also said

it would delay the general availability of the Office upgrade to early 2007 from

its previous January target.






The delay of the 2007 Microsoft Office package, which includes the Word
processor, Excel spreadsheet and PowerPoint presentation software, marks the

latest slip-up at Microsoft, which has been plagued by a series of

postponements.






Microsoft had already pushed back the consumer launch of Office in March to
coincide with the delayed debut of its Windows Vista operating system. It

postponed the release of its much-anticipated upgrade to Windows until after the

crucial holiday shopping season to improve the system's quality.






Office and Windows are Microsoft's two mainstay products, accounting for more
than half of the company's total revenue.






The company also said it plans to assess the impact of the Office 2007 delay on
its Windows Vista launch, which had been targeted to move at the same time as

Office 2007.






In a note to clients, Citigroup analyst Brent Thill said he expects Microsoft to
soon announce that the new Windows system will be delayed as well, in line with

the Office 2007 postponement.






"The risk is that these persistent delays could indicate quality issues that may
dissuade enterprises and consumers from becoming early adopters," Thill wrote.






Microsoft said it decided to push back Office because it wanted to implement
feedback from the company's latest test, or "beta" release.






"Based on internal testing and beta 2 feedback around product performance, we
are revising our development schedule," said a Microsoft spokeswoman.






Jupiter Research analyst Joe Wilcox downplayed the latest delay for Office since
most businesses were probably not planning to deploy the software before the end

of the year, but he said this could deal another blow to the company's image.






"It may not instill much confidence with some customers," said Wilcox.
"Microsoft seems unable to meet its dates."






Separately, Microsoft said it streamlined its U.S. sales force as part of a
broad reshuffle to be more efficient and responsive. The company laid off 5

percent, or 214, of its U.S. sales staff.






The company plans to add 66 new jobs to its sales team, resulting in a net
reduction of 148 workers. Microsoft said the job cuts are unrelated to the delay

of Office 2007.






Shares of Microsoft rose 31 cents, or 1.3 percent, to close at $23.47 on Nasdaq
on Thursday. The stock fell slightly after news of the delay broke, but clawed

back before the close of trade.






(Additional reporting by Michael Kahn in San Francisco)
































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