Kash Rangan (Merrill Lynch): Stepping up investments in the online services business seems the right thing to do. I would have expected that to be accompanied by an increase to the revenue guidance, yet when you look back over the last 12 months, excluding aQuantive, I still come up with much faster revenue growth in the online services business. Is the return on these investments going to take more than one year lag to show up in the financials, or is there some conservatism in how you are budgeting for the revenue productivity as a result of these investments?
Christopher P. Liddell: Online spending is likely to be more of a fiscal year 2010 impact on revenue. The answer is yes, and that is not only because of the nature of some of the investments that we are making. Things like marketing Cashback, that is going to take time in terms of seeing the real impact from that. The online advertising area is the part of the business in the short-term which we think is most challenging. From an economic environment point of view, we have done remarkably well in our commercial businesses and overall for PCs, getting through difficult and choppy economic waters. The online advertising area is difficult at the moment and that is across the board. We might see benefits, for example, in share but I am not sure that share is necessarily in best display in the search area. It translates in the first six months and across the year to significant revenue growth but you could expect to see us make progress in the areas that I talked about, which is the underlying dynamics, the driver of the percentage minutes, percentage share, et cetera. That is how we are going to have to measure ourselves over the next year.
Kash Rangan (Merrill Lynch): The 6% to 7% growth absent currency looks to be low on the 2% to 3%. What was the thought process that went into that guidance?
Christopher P. Liddell: In the 6% to 7% that is relatively light. To some extent, it is because of the high, strong quarter one that we had last year. We had a strong quarter one piracy performance in last year. It is also part of the strong fourth quarter performance from this year which was some channel inventory. If you like, it was a strong unit growth in quarter four fiscal year 2008. Some of that was because of a weak third quarter. Our third quarter call, we talked about some of the inventory issues there and that was one of the reasons why third quarter of last year was weak. It feels like a borrowing from third into fourth quarter, and also we think of some of our customers may have bought forward from first into fourth quarter as well, so that is one of the reasons. The other is we have got 10% to 12% PC unit growth expectation, which relative to the year of 12% to 14%, we are just seeing that quarter as being one of the low points. You combine all of those factors and we think that is going to be the lowest revenue growth quarter for client in the year.
Brent Thill (Citigroup): The overall buy-back for 2008 was more than cut in half from 2007. that is understandable considering the acquisition strategy, but as it relates to the overall plan, you only have $3 billion left on the current $36 billion plan. How aggressive at 25 and change will you be with the stock here?
Christopher P. Liddell: Going backwards and then going forwards, you are right, it was lower than the previous year. One of the reasons for that is we were getting down to a level of cash that we feel more comfortable with, so there was some accelerated buying in the previous year. The other impact was we see that the aQuantive acquisition, which was relatively expensive this year, and the last factor is when we announced the Yahoo! acquisition earlier this year, we went out of the market but from a sensitivity point of view, and at that stage we are envisaging having to use a large part of that cash for the acquisition. Subsequent to May when it was clear that the overall transaction was not going to happen, we went back into the market and we have been buying at levels that are more like historic levels. So those are the reasons why we have been less in the year. It was $5 billion for the quarter, so it was a reasonably strong buy-back quarter. At these prices, it is incredibly attractive from a buy-back perspective. I can not tell you, as I never do on a quarter by quarter basis exactly how much we will buy back. We only have about $3 billion worth of our buy-back left. That is good news in the sense that we gave ourselves until 2012 to complete it, so we can put it ahead of schedule. What we do here is we complete the current buy-back, and then we go back to the board for authorization of any subsequent buy-back, and that would be exactly the process that we do here and if and when we get authorization from the board to do further buy-backs, we would clearly announce the amount at that stage. But similarly would not announce exactly the shape of what we do. The value of the company relative to the last three years is as good as it has been.
Adam Holt (Morgan Stanley): Office 2007 has been a terrific product cycle, but MBD has been light relative to guidance for the last couple of quarters. Where are you in the Office 2007 cycle, and what gives you confidence that you will see a reacceleration of growth in MBD next year versus what you saw in the back half of this year?
Christopher P. Liddell: Overall, the MBD division did extremely well last year, so put that in context but you are right in the sense that Office was lighter than we might have thought, mainly to be honest in the consumer area, and that is around lower price SKUs in retail. We are seeing more of a buy from the volume that we are seeing. The volumes are good and business sales are good but the volumes in the retail side tend to be more in the lower priced SKUs, so that is having an impact overall. The overall volume and the overall adoption and reaction to Office 2007 has been good, so we feel good and we have put it inside our business group, which grew at 15% to 20% last year.
Adam Holt (Morgan Stanley): As you look at it next year, are you thinking about dynamics and share points being the key drivers, or do you expect office to reaccelerate?
Christopher P. Liddell: Those emerging products are going to make a big difference. We are guiding 14% to 15%. Office is unlikely to grow at 14% to 15%. It is likely to grow at more like high to single digits. The other parts of the business will grow well, and that is going to average it up to 14% to 15%. SharePoint, Office Communications, some of the online services that we are bringing in will start to have an impact. Overall, it is now our biggest division in terms of revenue, 14% to 15% looks good.
Robert Breza (RBC Capital Markets): Looking at the $500 million in expenses that you are talking about, how do you think about that trending through the year?
Christopher P. Liddell: It has different dynamics. In terms of the consumer marketing, that is going to be front loaded in the year, and one of the reasons for our first quarter being relatively light compared to the other quarters would be some of the marketing spend that we see in the first quarter. In terms of some of the online spending, that is going to be more progressive through the year.
Robert Breza (RBC Capital Markets): Depending on any outcome from an acquisition perspective, would you look to accelerate that investment or decelerate that investment?
Christopher P. Liddell: That is going to be opportunistic. We closed a lot in the fourth quarter, and one of the things that are impacting our results is the amount of non-cash amortization associated with acquisitions, and that was relatively substantial last year. It was over $300 million. We do not call that out, as some companies do, and take the benefit of adjusting our results to reflect that. We take that through the P&L and next year in terms of the guidance we have given you, we expect it to be more than $300 million.
Kirk Materne (Banc of America): You talked in the guidance on entertainment and devices about maintaining profitability. Given that there is no sort of new cycle of the hardware this year, is there any reason why profitability should not start to trend up as attach rates get better?
Christopher P. Liddell: That is one of the impacts as we dropped prices during the course of last year, so year-on-year we have difficult price comparisons. The other thing is there is more than just X-Box sitting in there. There is Windows Mobile, which has got a lot of opportunities, so there are other areas that we will be spending on. We are not in the comments of today giving any guidance on profitability. My comment was simply that it will sustainable profitability, but we are not saying whether that is going to be significantly up or down from where it was last year.
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