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Earnings: Microsoft Posts First Ever Drop in Revenue; Online Ad Revenue Falls 16 Percent

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Hit hard by the recession, Microsoft (NSDQ: MSFT) reported the first year-over-year revenue drop in its history Thursday — and posted revenue short of analysts’ expectations.

The company posted net income of $2.98 billion (33 cents per share), down 32 percent from the $4.4 billion (47 cents per share) recorded during the same period a year ago. However, that included a 6 cents per share one-time charge due to severance payments and investment impairments. Revenue for the company

7 Responses to “Earnings: Microsoft Posts First Ever Drop in Revenue; Online Ad Revenue Falls 16 Percent”

  1. Why is Mac software part of Entertainment and Devices? A backhanded cheap shot at Apple, not only because Macs are mostly used by consumers (as opposed to corporate customers), but because Microsoft considers the Mac an entertainment platform, not a serious computer for people with serious work to do.

  2. victoria howard

    Er.. how on earth did analysts expect advertising revenues to pick-up…? Even though digital is taking more share of ad spend, this is still within a declining market and if you look at which part of digital is taking the lion's share, it is Search! Even the mighty Google has not been cruising. Digitial will come out of this stronger than ever, of that there is no doubt, the crisis is merely accelerating digitial media $$… it's a pity that these analysts don't look further than the tip of their nose…. of course wall st doesn't care about the med term future… silly of me.

  3. Tom Ross

    Deviously, they never mentioned the success of Mac Office 2008 last year when their Entertainment & Devices divsion had a great quarter or two. They just let everybody assume that it was the Xbox 360 that had generated the profits.

    So why is Mac software part of Entertainment&Devices;? Purportedly because Macs are mostly used by consumers, not corporate customers. In truth so it can prop up the numbers of Microsoft's lossy Xbox and Zune businesses, and, as we can see now, apparently also to act as a cheap-shot scapegoat.

  4. Joseph Tartakoff

    Two quick points:

    Microsoft software sales for Macs were down in part because Office 2008 was released a year ago

    And yes, Microsoft software for Macs is part of the entertainment and devices unit at Microsoft. I'm not quite sure why either.

    — Joe,

  5. Why would Microsoft's 'Mac' software be listed under entertainment and devices?

    The only 'devices' with Mac support are cross-platform mice/keyboards, and they list no games.

    And I can't believe 'Expression Media' cost MS much to develop…