TIME Earnings

Microsoft’s Revenue Jumps, But Profits Decline on Job Cuts and Nokia Costs

The Microsoft Corp. logo sits on display during the Microsoft Worldwide Partner Conference in Washington, D.C. on July 16, 2014.
The Microsoft Corp. logo sits on display during the Microsoft Worldwide Partner Conference in Washington, D.C. on July 16, 2014. Bloomberg—Getty Images

Shares of the tech giant rose 4% in after hours after reporting a 25% sales bump in the first quarter of its 2015 fiscal year

Microsoft posted a 25% sales bump in its most recent quarter, beating Wall Street predictions on the strength of improved personal-computer sales as well as added revenue from the mobile phone business that the company Microsoft acquired from Nokia for $7.5 billion earlier this year. Here are the key points from Thursday’s Microsoft earnings report.

What you need to know: Sales improved to $23.2 billion in the first quarter of its 2015 fiscal year, which was also Satya Nadella‘s second full quarter as CEO of the company. But at the same time, Microsoft’s profits dipped more than 13%, to $4.5 billion, or 55 cents per share. The drop in profits was attributed to a $1.1 billion charge the company took in connection with massive layoffs, first announced over the summer, along with some ongoing costs of integrating Nokia’s handset business.

Microsoft got $2.6 billion from phone hardware sales in the most recent quarter, thanks to its new handset business, while the company’s unit that handles corporate sales grew revenue by 10% overall to $12.3 billion. The latter figure includes a 2.7% bump for commercial licensing sales, which cover server programs and corporate Windows and Office products.

The big number: Nadella has been putting a lot of focus toward selling Microsoft’s cloud-based business services, and the company said Thursday that its commercial cloud revenue, including sales from Office 365 and Azure cloud platform, grew 128% in the first quarter. Overall, the company reported a 50% jump in sales for its “Commercial Other” line, which includes the cloud products, to $2.41 billion. This is a closely-watched part of Microsoft’s business, as investors want to be sure that the tech giant is nimble and modern enough to be a big player in the cloud services market. Microsoft’s shares jumped almost 4% in after-hours trading, so it seems like investors were pleased with the company’s efforts.

What you might have missed: Microsoft also reported a 74% first-quarter revenue increase, to roughly $2.5 billion, for its computing and gaming hardware segment, reflecting sales growth for the company’s Xbox gaming console as well as the market-wide rebound in PC sales. Microsoft revealed Thursday that it sold 2.4 million Xbox consoles during the first quarter, representing a 102% bump. However, the company did not specify whether those sales came from the new Xbox One, which launched in 28 new markets during the quarter, as opposed to older iterations of the gaming system.

This article originally appeared on Fortune.com

TIME Video Games

In the Sunset Overdrive Launch Trailer, It’s Mostly Blue Skies

A corporate soda outfit releases an energy drink that turns its imbibers into mutants, and that's where you come in.

So here’s what I want to ask whoever put the Sunset Overdrive launch trailer together: where’s the sunset?

First it’s nighttime, then it’s daytime, then you get a few seconds of post-sunset skyline while the protagonist gets all motivational-speaky. But the action takes place midday. Look at that cerulean blue sky! Look at all those fat cottony clouds! ELO would approve!

But the overdrive angle…that’s hard to miss. This is a game about the opposite of narrative gravitas. You’re the former employee of a soda-maker that’s released an energy drink that turns people into slavering super-powered mutant bad guys. Your job is to grind around a carnivalesque sandbox and do goofy, epic battle with (flying?) worms, robots, sac-covered troll-things and giant floating dolls.

Sunset Overdrive is one of Microsoft’s two holiday Xbox One-exclusive pillars, the other being that thing about a military cipher who fights tittering aliens still, in 2014, more behaviorally interesting than the ones the studio that created said military fellow more recently introduced.

Studio Insomniac Games has a respectable design track record with this sort of thing. The ups and downs of the later Resistance games aside, the Ratchet & Clank series is terrific. Sunset Overdrive looks like a punk version of the latter, a third-person gonzo playscape: Tony Hawk meets Tank Girl meets Sam Raimi. (Is it me, or does the protagonist look a little like teenage Bruce Campbell?) If you’re a game aficionado, Insomniac’s also name-dropped Crazy Taxi and Jet Set Radio as inspirations.

Microsoft claims the game “rewrites the rules of traditional shooters.” We’ll see, when the game arrives next Tuesday, October 28.

TIME Companies

Microsoft CEO Satya Nadella Says Company Pays Men and Women Equally

Microsoft Corp Chief Executive Officer Satya NadellaSpeaks At Company Event
Satya Nadella, chief executive officer of Microsoft Corp., speaks to students during the Microsoft Talent India conference in New Delhi, India, on Tuesday, Sept. 30, 2014. Graham Crouch—Bloomberg/Getty Images

Verifying the lack of a pay gap is difficult, however

Microsoft CEO Satya Nadella, who was criticized earlier this month for saying women should not ask for raises, said Monday that his company pays men and women equally.

“I checked that it is something that we are enforcing,” said Nadella, who has apologized for the earlier remarks, at a presentation in San Francisco, Reuters reports. “We are in fact in good shape. Men and women get paid equally at Microsoft.”

Nadella’s statement is difficult to verify, as Microsoft does not make its pay structure public. Nadella’s comments also seem to contradict data from the site Glassdoor, which reported — based on a very small sample of employees who voluntarily shared their salaries — that men seem to earn more than woman doing the same job. According to its figures, male senior software development engineers earn around $137,000 a year, while women with that title earn around $129,000 a year.

“We have made some progress,” Nadella said during the presentation. “We have a lot more to do.”

[Reuters]

MONEY stocks

3 Things to Know About IBM’s Sinking Stock

141020_INV_IBM
Niall Carson—PA Wire/Press Association Images

IBM's shares plunged 7% Monday after a disappointing earnings report. Can tech's ultimate survivor transform itself one more time?

International Business Machines INTERNATIONAL BUSINESS MACHINES CORP. IBM -0.0617% has long enjoyed a unique status on Wall Street — a tech growth powerhouse that investors also see as a reliable blue chip, with steady profit growth and a hefty dividend. But with the rise of new technologies like cloud computing, Big Blue has struggled to maintain that balancing act.

Now investor confidence has suffered a big blow.

On Monday the company announced the results of a pretty lousy quarter. IBM’s third-quarter operating profit was down by nearly one fifth, and the company failed to generate year-over-year revenue growth for the 10th consecutive quarter.

Big Blue also revealed plans to sell-off its struggling semiconductor business, a move that involves taking $4.7 pre-tax billion charge against IBM’s bottom line. Actually, it is paying another company to take this unit off its hand.

While CEO Virginia Rometty acknowledged she was “disappointed” with IBM’s recent performance, she’s also pledged to turn the company around, led in part by IBM’s own foray into the cloud.

Now, you don’t get to be a 103-year-old tech company without learning to adapt. That’s what IBM famously did in the ’90s, when the computer giant started to shift away from profitable PC hardware in favor of consulting and service contracts for businesses.

But Monday’s dismal earnings show just how hard repeating that trick could turn out to be.

Here’s what else you need to know about the stock:

1) You can’t really call IBM a growth company anymore since its sales aren’t rising.

When it comes to revenues, IBM ranks behind only Apple APPLE INC. AAPL 0.372% and Hewlett-Packard HEWLETT-PACKARD CO. HPQ -0.0286% among U.S. tech companies. On a quarterly basis, though, sales have actually shrunk for 10 periods in a row, including a 4% slide in the third quarter. The big culprit is cloud computing, in which businesses can access computing services remotely via the Internet.

Since the 1990s, IBM’s model has been premised on selling powerful, expensive computers to large businesses, then earning added profits on contracts to help firms run those machines. But the cloud lets companies rent, not buy, this computing power. “You only pay for what you use,” says Janney Montgomery Scott analyst Joseph Foresi. The result: IBM’s hardware revenues sank 15% last quarter.

2) IBM is racing to be a leader in cloud computing, but with mixed results.

The company has identified four alternative areas of growth. One is the cloud, the very technology eating into IBM’s hardware sales. Big Blue has spent more than $7 billion on cloud-related acquisitions. It’s also going after mobile, IT security, and big data, the analysis of information sets that are too large for traditional computers. An example of that is Watson. IBM’s artificial-intelligence project, which won Jeopardy! in 2011, is being marketed to businesses in finance and health care.

These initiatives have promise, but IBM’s size is a curse. For instance, the company’s cloud revenues jumped 69% to $4.4 billion last year, but with nearly $100 billion in overall sales, “it’s hard to move the needle,” says S&P Capital IQ analyst Scott Kessler.

3) The stock is now much cheaper than its tech peers, but it may deserve to be.

Investors willing to wait and see if these moves will transform IBM may take comfort in the fact that the stock looks cheap. What’s more, the shares yield 2.4%, vs. 2% for the broad market. This could make the company look like a good value.

But investors should tread carefully, says Ivan Feinseth, chief investment officer at Tigress Financial Partners. He notes IBM has spent $90 billion on stock buybacks in the past decade, which has kept the P/E low by increasing earnings per share. Yet none of that money was invested for growth, as evidenced by IBM’s sluggish annual growth rate. It is hard to imagine IBM outmuscling Amazon AMAZON.COM INC. AMZN -8.3403% , Cisco CISCO SYSTEMS INC. CSCO 0.9124% , Microsoft MICROSOFT CORP. MSFT 2.4656% , HP HEWLETT-PACKARD CO. HPQ -0.0286% , and Google GOOGLE INC. GOOG -0.7721% in the cloud — and there are better values in tech.

TIME career

Microsoft CEO Says He Was ‘Completely Wrong’ to Suggest Women Shouldn’t Ask for Raises

Satya Nadella had previously apologized for his remarks

Microsoft CEO Satya Nadella said in a new interview that he was “completely wrong” to suggest it’s “good karma” for women to wait for a raise instead of asking for one.

“It’s been a very humbling and learning experience for me,” Nadella told CNBC in his first interview since his initial comments drew outrage.

Nadella said anyone held back in their career by gender bias should push back against their managers, and that he had wrongly extrapolated the advice from his own experiences.

“I basically took my own approach to how I’ve approached my career and sprung it on half of humanity,” he said.

Nadella had previously apologized for his remarks in a letter to the company.

“I believe men and women should get equal pay for equal work,” he wrote. “If you think you deserve a raise, you should just ask.”

See the interview below.

[CNBC]

 

 

MONEY Tech

Why Apple is Not a Tech Company

hand pulling iPhone box off shelf
Maxim Shemetov—Reuters

Peter Thiel argues that buying Apple means betting against innovation.

As the founder of PayPal, and the one of the first external investors in Facebook, it’s hard to argue that Peter Thiel doesn’t understand innovation or technology companies. But in his new book, Zero to One, Thiel takes somewhat of a radical approach to these concepts, drawing a line in the sand that may irk many traditional tech firms, as well as their investors.

Despite being both the largest and most well-known firm in The Valley, Thiel’s personal opinion is that Apple APPLE INC. AAPL 0.372% isn’t much of an innovator these days: Just a few years ago, Apple’s stock was a bet on new technology — today, it’s a bet against it (at least according to Thiel).

In a recent phone interview, Thiel told me why he doesn’t consider firms like Apple, and most of the members of the Nasdaq 100, to be technology companies, and what that might mean for their investors.

An odd transformation

Thiel has somewhat of a problem with the concept of a “tech firm” — or at least, what people generally define one to be. In Thiel’s mind, true technology companies are firms leveraged to innovation — to new business models designed to shake up the status quo. Plenty of firms begin their life as a tech company, but those that find success often become something quite different.

“A whole bunch of the Nasdaq 100 stocks are bets against innovation … it’s a long list. [There's] a very short list of companies where you’re actually betting on innovation … Most of [the members of the Nasdaq 100] just throw off huge cash flows, and the risk is actually that there’s some innovation ….These companies are always described as ‘tech stocks’ because they were tech stocks … at some point in the past, but [today] they’re bets against technology.”

Although most still consider Apple, Oracle, and Microsoft to be technology firms, few hold the same opinion of General Motors. Yet according to Thiel, it’s all relative — simply a matter of timing and perspective.

“GM was a tech stock in the 1920s — it was still sort of a tech stock in the 1950s. [But] by the 1980s, you invested in GM as a bet against German and Japanese innovation. You said, ‘I’m long GM because Germany and Japan are never going to build cars that are that good.’ At some point, a lot of these tech stocks become weirdly changed to being bets against technology … [Of course] the companies can never say that, because their internal narrative and their external story is [based] so much around how they were historically innovative.”

Know what you’re buying

Admittedly, General Motor’s transformation from technology firm to incumbent took decades, but Thiel believes the shift is often far more straight-forward: Simply look for the founder to depart. With Apple, the change occurred just over three years ago, with the passing of Steve Jobs that thrust Tim Cook into the spotlight.

Thiel is a fan of Cook’s management skills (“I think Tim Cook has done a very good job in an impossible position to try to fill Steve Jobs’ shoes,” he told me) but believes the Apple story is fundamentally different with him at the helm: Once, people bought stock in Apple because it was creating revolutionary new products — today, it’s all about the cash flow.

“No one is investing in Apple because they think it will create new products. People are investing in Apple because it’s generating massive cash flows, and the bet is that the cash flows will go on [for] somewhat longer than people think … that the rest of the world will not innovate; will not succeed in closing the gap.”

While plenty of investors may disagree with Thiel (the new Apple Watch, for one, gives investors something to look forward to) it’s indisputable that Apple is generating billions of dollars of cash, largely on the back of one product: the iPhone. Apple generated $10.3 billion in cash flow alone last quarter — enough to acquire many members of the S&P 500 outright. The iPhone brings in more than half of Apple’s revenue, and likely the bulk of its profits.

Not a bad investment

But even if Apple’s best work is behind it, it doesn’t make it a bad investment. In fact, Thiel believes Apple could be an excellent stock — so long as the iPhone cash-cow continues to deliver.

“Apple [will keep] generating massive cash flows so long as nothing much changes — as long as it maintains a certain brand lead, a certain premium on the iPhone. [If so,] it will generate huge cash flows [for many years] … the risk is that other people will catch up.”

That risk could come from rival handsets. Competitors like Xiaomi and OnePlus have attracted a fair amount of attention recently for their quality handsets, which they sell at a fraction of what Apple charges for the iPhone. Or it could come from advanced wearables — watches and other gadgets designed to replace the traditional smartphone. It may come from a radical reinvention of the handset — something like Project Ara, that shakes the current smartphone business model to its core.

Of course, it may not come at all — or if it does come, not for many, many years. In which case, the cash flows should continue, and Apple should reward its shareholders.

“Maybe there’s not much innovation happening. Maybe people overestimate innovation … but I think it is very helpful to try to get the framing right and understand, ‘OK, I’m betting against technology here.'”

TIME Silicon Valley

In Silicon Valley, You Can Forget Aging Gracefully

HP CEO Meg Whitman Visits China
ChinaFotoPress—ChinaFotoPress via Getty Images

Getting old isn't easy, especially in tech

Nature abhors the old, Emerson said. In 2014, we can add: so do technology investors. Because in the tech sector, where innovation and growth are worshipped and rewarded with obscene valuations, the esteemed companies that helped establish Silicon Valley and shape the Internet are not being allowed to age gracefully.

HP is breaking into two, despite years of its CEO saying this wouldn’t happen. eBay’s spinning off PayPal, after its CEO insisted this made no sense. Both companies knuckled under shareholder pressure. Now Yahoo is facing pressure to cash out of Alibaba and merge with AOL. That follows Dell going private and IBM ditching its low-end servers. There are even investor rumblings that Microsoft would be better broken into pieces.

Spinoffs, breakups, LBOs and shotgun marriages aren’t uncommon among aging, troubled companies. But the wave of events hitting companies once considered blue-chip tech firms is unprecedented. Only a decade ago, most of these companies were at the top of their games. Even today, many are so profitable they annually pay out billions, if not tens of billions, to shareholders through dividends and buybacks. And while many of these companies have been undervalued by investors for years, they are now being treated as if they are entering a period of advanced decay.

In sectors like utilities or retail, slow growth is tolerated as long as a healthy profit margin is maintained. But in tech, profits aren’t enough without growth. And there is plenty of growth among the younger generation of tech giants like Google, Facebook, and LinkedIn. The gap between long-in-the-tooth tech giants and lithe, growing companies is getting wider by the year. While the latter are driven by innovation the former are pushed around by shareholder demands.

Tech investors have always been growth-oriented, but now it’s becoming an obsession. And why not? As the network effects long promised in the early years of the Internet finally kick in, growth at a successful startup can mushroom from seed round into large cap in a few years. Airbnb, Uber and WhatsApp were all founded about five years ago and today are valued at $10 billion, $18 billion and $22 billion, respectively.

Often, the new generation of successful startups push to stay out of public markets as long as possible to avoid the public scrutiny, quarterly earnings parades and exposure to shareholder activists that are plaguing the likes of HP, eBay and Yahoo. The world of secondary markets and venture investing have evolved to accommodate them, allowing institutional investors who can afford substantial stakes to become investors while the startups remain private.

Yet there’s a cautionary lesson here that startup founders should consider: The same forces that are accelerating tech growth curves are also accelerating the time to maturity. Grow big enough and companies will need to draw on public markets for financing. To meet quarterly targets, they need to maintain billion-dollar businesses even when they stop growing. That limits the ability to find new, financially risky areas of innovation. Soon enough, dividend and buyback programs are rolled out to placate antsy investors. That, as we are seeing this year, only placates them for so long.

No one is demanding a dividend from Google, or calling for Facebook to spin off Instagram. Both are delivering growth that often surpasses investor expectations and rewarded with rising stock prices. Others like Netflix and Amazon are getting a pass by investing profits into future growth. But as much as HP talks about, say, developing a mass-market 3D printer, investors only look with disappointment at the slow-growth business of PCs and IT services.

There are a few companies founded before the dot-com boom, notably Apple and Amazon, that have so far been able to buck the trend. But they may not be able to stay ahead of the curve for long. The campaign to pressure Apple for more dividends has halted because Tim Cook keeps promising new product categories like the Apple Watch. Amazon has lost nearly a quarter of its value in the last nine months amid concerns its spending is outpacing its promised growth.

For now, Apple and Amazon are anomalies among companies more than 20 years old that are promising more growth in coming years. That’s leaving their CEOs independent enough to pursue blue-sky innovations. But age catches up to all companies. And these days, companies in the tech sector are growing old faster than ever.

MONEY pay gap

3 Ways Women Can Make Sure They Get the Raises They Deserve

hand helping hand
DAJ—Getty Images/amana images

Career coach Caroline Ceniza-Levine weighs in on the controversial comments made by Microsoft CEO Satya Nadella last week. Her take: They underscore the need for women to find sponsors and sponsor others.

I imagine that the savvy, self-starting executive women of Microsoft felt particularly deflated by CEO Satya Nadella’s recent remarks (later withdrawn) that women shouldn’t negotiate for more money. Here they are most likely doing all the prescribed “right” things:

  1. Entering a high-growth industry, such as tech
  2. Working for a brand-name firm, like Microsoft
  3. Proactively working on their negotiating skills

…and then BAM! Here comes Nadella essentially saying that they should just wait for the system to even out the gender pay gap. If the CEO isn’t going to support your efforts, why even bother?

Actually this is precisely why you should bother with all of the proactive hard work. Your effort and skills belong to you, and you can take them somewhere else if you should hit a brick wall.

Sure, Satya Nadella’s unfortunate admission shows that a CEO of a major corporation may thwart your efforts just as a mid-level manager or even a narrow-minded friend (in the guise of well-meaning advice) might. You may not get the support you expect. But if you keep doing the prescribed “right” things below, you will collect some supporters to your cause along the way—including more open-minded, equitable executive sponsors.

Create an amazing body of work

It still starts with getting results, establishing your expertise, and contributing to the bottom line. Don’t let your own work product suffer because there is someone at the top of your company who doesn’t care—others do care and are watching for promotion-worthy candidates. You want your name to surface.

But you cannot simply let your accomplishments stand for themselves. You need to advocate for your them, to ensure they are recognized. See my previous post on preparing for your next review for step-by-step instructions on making sure you get your due.

Build a strategic and supportive network

So Nadella is out of step, and there are probably other CEO’s who share his view. But there will be men and women—at every level, in every industry, in every functional area—who are supportive.

I once had a banker at a big-name firm encourage me to “follow my heart” and take an unexpected career turn, even if it meant turning down his firm’s offer. He was so supportive and generous and gave me courage when I needed it most—and this was a BANKER! If I managed to find a mentor with a heart of gold in that industry, there will certainly be supportive senior people in any industry.

Find them. Enroll their support.

Be a strategic and supportive of others

Be the anti-Nadella. Don’t just throw your hands up at the amorphous system; proactively help others along and do your part to change the game.

Pick the smart but shy person in your group and plan to call on that person in the meeting; let the person know what you will ask so they have a chance to prepare. Think of that colleague from another department who always helps you and write a commendation to her (or his) manager, cc’ing the person you’re writing about. Return to your alma mater for a networking event or career talk.

As you build your amazing career and advocate for yourself, reach back and better the system for others.

 

Caroline Ceniza-Levine is co-founder of SixFigureStart®career coaching. She has worked with professionals from American Express, Condé Nast, Gilt, Goldman Sachs, Google, McKinsey, and other leading firms. She’s also a stand-up comic. This column appears weekly.

Read more from Caroline Ceniza-Levine:

MONEY Careers

Microsoft’s CEO Wasn’t the Only Male Exec to Say Something Clueless About Women This Week

Microsoft Satya Nadella gives a lecture about dream, struggle and creation at Tsinghua University on September 25, 2014 in Beijing, China.
Microsoft CEO Sayta Nadella isn't smiling after his comments about women in the workplace were universally panned. ChinaFotoPress via Getty Images

Yesterday, Microsoft's CEO said something really wrong about women. But he's just one of a number of tech executives to make similar gaffes in the last few days.

Updated—3:52 P.M.

This has not been a great week when it comes to equality in the workplace. On Thursday, Microsoft CEO Satya Nadella made waves when he advised women against asking for pay bumps. “It’s not really about asking for the raise,” he told a mostly female audience at the Grace Hopper Celebration of Women in Computing, “but knowing and having faith that the system will actually give you the right raises as you go along.”

By Thursday night, Nadella was in full damage-control mode, renouncing his previous statement in an email to Microsoft staff. “If you think you deserve a raise, you should just ask,” he wrote.

It’s good that Nadella acknowledged his mistake, but the gaffe shows how many in the business world still have difficulty understanding the prejudices faced by their female colleagues. And as our colleague Margaret Magnarelli points out, “he still doesn’t realize it’s not as simple as ‘just asking’ for us.”

What’s more, the Microsoft chief wasn’t the only boss even in the past few days to make clueless comments about how women should behave in the workplace. Earlier at the same conference, a group of male execs from Facebook, Google, GoDaddy, and Intuit participated in a panel purporting to offer tips on how both men and women could help stamp out tech’s bro-centric culture. A video of the event is available here, and Readwrite gave the blow-by-blow.

It did not go well. Here are a few of the most most off-base observations:

“It’s more expensive to hire women, because the population is smaller.” – Mike Schroepfer, CTO of Facebook

Actually, it’s not. While Schroepfer was trying to say that it’s more expensive to recruit women because they are underrepresented in computer science, it’s been widely reported that women make 78% of what men make. This is the so-called gender pay gap.

And yes, the gap persists even in the supposedly meritocratic tech world: According to a recent analysis of Census data, men with a graduate or professional degree working in Silicon Valley earn 73% more than women with the same degrees working in the same industry.

While some of the pay gap is explained by factors like experience level and industry choice, economists Francine Blau and Lawrence Kahn found that even when you control for those factors, 41% of the gap remains “unexplained.”

In fact, at a conference last month, Australian tech mogul Evan Thornley made the opposite point: that women are “Like Men, Only Cheaper.” That quote comes directly from his slideshow. “Call me opportunistic,” he elaborated, “I thought I could get better people with less competition because we were willing to understand the skills and capabilities that many of these women had.” Thornley later apologized.

“The only thing I would add is speak up … Speak up, be confident.” – Blake Irving, CEO of GoDaddy

This isn’t bad advice by itself — studies have shown that women who self-promote and negotiate harder do end up with with higher salaries — but like Nadella’s email to employees, it fails to acknowledge that women are often punished when they do speak up. “Assertive or competitive qualities are usually associated with men, and are thought to be essential for successful leaders. But for women, they can be a landmine,” said Daina Middleton, global CEO of Performics, in an interview with Fast Company.

Need evidence? Economist Linda Babcock ran a study where she videotaped men and women asking for raises using the exact same script. Viewers of the tape agreed that the man deserved the raise. But they did not like the woman who asked for the exact same thing, in the exact same way.

“People found that to be way too aggressive,” Babcock told NPR. “She was successful in getting the money, but people did not like her. They thought she was too demanding. And this can have real consequences for a woman’s career.”

Other data suggests that women entrepreneurs also get turned down more often than men do. One study found that investors are more likely to accept pitches from male entrepreneurial teams than from female teams — even if they’re making the exact same pitch. In another study, business school students read a prospectus for a mock company. In some versions, the CEO was listed as male; in others, the CEO was female. The students were four times more likely to recommend the company led by the male CEO.

“It will be twice as hard for you … but you can make a big difference in your company.” – Alan Eustace, senior vice president of search at Google

True, but unfortunately women are often absent from the kind of high level positions that would allow them to “make a big difference.” Only 4.8% of Fortune 500 CEOs are female — and those 24 women represent a record high.

Women already know it’s at least twice as hard for them to succeed. They just wish business leaders would do something about it.

To Eustace’s great credit, he acknowledged the panel’s issues on Twitter and made a great suggestion for future male allies.

 

MONEY pay gap

Why Microsoft CEO Satya Nadella STILL Has It Wrong on Raises for Women

Microsoft Chief Executive Officer Satya Nadella
Manish Swarup—AP

The exec has taken back his comments that we should count on karma to boost our salary, but that doesn't mean he gets what it means to be a female at work today.

Easy for a dude to say that women should have “faith that the system will actually give you the right raises as you go along.” Especially a dude who makes $7.6 million and sits at the top of one of America’s largest companies.

But Microsoft CEO Satya Nadella, who made that comment in answer to a question about how women should ask for a salary increase—in front of a room full of women at the Grace Hopper Celebration of Women in Computing on Thursday—at least seems to have realized the error of his statement.

On his blog last night, he acknowledged:

I answered that question completely wrong. Without a doubt I wholeheartedly support programs at Microsoft and in the industry that bring more women into technology and close the pay gap. I believe men and women should get equal pay for equal work. And when it comes to career advice on getting a raise when you think it’s deserved, Maria’s [Maria Klawe, computer scientist and moderator] advice was the right advice. If you think you deserve a raise, you should just ask.

Great that he owned the mistake. But what’s worse, the fact that he didn’t realize that women are paid 22 cents less on the dollar than our male peers—or the fact that he still doesn’t realize it’s not as simple as “just asking” for us?

Yes, We Pay a Penalty for Not Asking

Assuming you care remotely about women’s issues, you’ve seen the research showing that few women negotiate salaries. (By the by, it goes all the way up the ladder. Nadella’s fellow C-suiter GM’s Mary Barra noted at Fortune’s Most Powerful Women Summit that she had never in her career asked for a raise. The emcee then polled the audience on how many of them also had never asked, and “the majority of the conference’s high-powered female attendees raised their hands,” according to Fortune‘s Broadsheet.)

Our reticence has a compounding effect over our careers. By not asking right off the bat, Carnegie Mellon economics professor Linda Babcock has said, we leave lost earnings “anywhere between $1 million and $1.5 million” on the table.

But We Pay a Penalty for Asking, Too

Yet Babcock’s research found that we may be on to something with our sense of caution. Simply stating the case for why we deserve a raise doesn’t tend to get women to the same result as it does men. In fact, it can actually hamper our career progress.

For a study published in 2005, Babcock and Hannah Riley Bowles, a senior lecturer in public policy at Harvard’s Kennedy School, asked participants to watch videos of men and women asking for a raise. The guys and gals in the video used the exact same scripts.

The result? Participants liked the men and agreed to give them the bump in pay, but found the women too aggressive. While they gave her the raise, they did not like her. In particular, male study participants were less willing to want to work with the female negotiator.

We know that being well liked—a quality we women struggle with starting from the first grade-school birthday party we’re not invited to—is also key to getting ahead. So we’re caught between a high heel and a hard place.

Or, as Joan Williams, founding director of the Center for WorkLife Law, put it in The Huffington Post,

If women act too feminine and don’t ask, they end up with lower salaries. If they act too masculine and ask, then people don’t want to work with them. Women walk a tightrope between being too feminine and too masculine. Men don’t, which is one reason why office politics are trickier for women than for men.

So We Have to Give an Oscar-Winning Performance to Get What We Want

The research Babcock and Riley Bowles have done has found that women have to be more, well, “womanly” in their approach in order to get the raises and promotions that they deserve and come out the other side smelling like a rose.

You know—positive, solicitous, and putting others first. Less shark, more 1950s housewife.

Acknowledging herself that these findings are “depressing,” Babcock (along with Riley Bowles) concluded that being collaborative—trying to take the perspective of the company and hiring manager and using “we” statements instead of “I”—tends to be more effective than other approaches. They’ve also emphasized trying to be “authentic” by using language that feels comfortable.

That doesn’t feel the same as “just ask”—it requires us to act a part when what we simply want is for our managers to respect us as workers and people in a gender-neutral way.

We want to be able to walk in and say, “I brought in $2 million in business this year and am underpaid relative to my position,” and be better paid and just as well liked at the end of it.

You know, like a dude.

Related:
5 Ways Women Can Close the Pay Gap for Themselves
When She Makes More: How to Level the Financial Playing Field

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