Microsoft Corp. Posts Fourth-Quarter Profit
Microsoft Corp. has posted $17.4 billion fourth-quarter revenues and $6.2 billion profits that ended in June. This performance, which beats analyst expectations, was driven by strong sales of its Xbox console and Office software.
Microsoft follows IBM, Google and Apple in posting good results as spending on technology seems to be holding up well in some uncertain economies in Europe and the U.S.
However, there is a focus on Microsoft Windows, the company’s flagship product, as there was a decline of one percent to the revenue from the unit that markets the Windows operating system. This fall has been the second consecutive quarter trend that the company executives anticipated to continue due to the weakness of sales for PCs.
Microsoft has been worried about the consumers’ shifting demands for tablets because majority of tables run on the operating system of Apple or the Android software of Google. The business model of Microsoft for licensing software that is installed on individual computers is also being threatened by the push to market applications as services that are hosted on the web. There has been traction on cloud computing as rivals Salesforce.com and Google Inc. launch more programs that can be utilized by any machine with a high-speed Internet connection.
Kim Caughey Forrest, Fort Pitt Capital senior analyst, mentioned that it is not good to know that the there is no reported growth for the Windows Live and Windows division despite knowing that there was a 1% increase in the number of PCs shipped in this quarter as Intel revealed.
Wall Street should be given a better feel by the quarterly results on whether the large investments of Microsoft may have good outcomes. Although the search engine of Bing has attracted more traffic in the past years, this is not enough to beat Google’s presence in the Internet. Indeed, this dominance has been the main reason for the online division of Microsoft to continuously lose money.
In an effort to better compete with Google, Microsoft took over the search engine of Yahoo. However, the collaboration hasn’t gained better online advertising revenues as much as investors were told by executives. This failure prompted the two companies to delay the expansion of their alliance to other parts of the world. Peter Klein, Microsoft’s chief financial executive, said Yahoo and Microsoft are working together to find a solution to this problem.
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