Blog Post

Earnings: Slower Rev Growth @ MSFT; MSN Revs Dip 2 Percent

Suddenly, everything looks cloudy from those windows: Q4 earnings at Microsoft grew by only 9 per cent in the latest quarter, slower than the 11 per cent that had been expected, as glitches in the global launch of new Xbox 360 video games console held back revenues.

The company also said that its search division had not performed as well as it had forecast. Sales in MSN slipped 2 per cent to $593 million, partly reflecting a shift from ISP to selling advertising. Also, the switch away from Yahoo on contextual ad side to its own new AdCenter was hampering gwoth, since the Microsoft technology was not yet “monetizing” the company’s search engine traffic, the company said. The profits for MSN plunged 55% to $58 million.

In the mobile division, revenues were up to $101 million, from $72 million in the year-ago quarter, and profits were $20 million, up from a loss of $12 million in the year-ago quarter.

The home and entertainment division, which includes the Xbox, lost $293 million in the quarter, against a profit of $55 million in the year-ago quarter.