Blog Post

Microsoft: Consumers Are Spending Again; Businesses — Not Yet

Despite the company’s strong quarterly results, Microsoft (NSDQ: MSFT) executives are still expressing caution about the state of the economy. CFO Peter Klein said during the company’s surprisingly short earnings call Thursday that while consumer demand was once again “healthy,” enterprise spending had not come back yet. So when will that change? Nothing reassuring at all here, with executives saying the “timing is uncertain” and that the company “doesn’t have visibility.”

Unsurprisingly, though, Microsoft executives did talk a lot about the Windows 7 operating system. For instance, executives said that the company had sold 60 million Windows 7 licenses over the last two quarters — an all-time record for Windows. As for the company’s online business, Klein said the online ad market was improving (During the quarter, search ad revenue was up, while display ad sales were down). Asked when Bing’s market share gains would translate into overall sales growth in the company’s online business, Klein said it was a “long term process” that would pay off only once the Yahoo (NSDQ: YHOO) search deal gets approved and Microsoft can get the scale that should result; Microsoft still expects to get regulatory approval for the deal early this year.

Klein was also asked about a recent reorganization in the company’s entertainment and devices division, which saw the departure of long-time Microsoft executive Enrique Rodriguez, who had overseen the company