Microsoft posts first-ever loss

 

Will Windows 8 offset softening PC sales?

A massive write-down in the value of its aQuantive advertising network and slowing sales of PCs running Windows has contributed to Microsoft reporting its first-ever loss in its 26-year history on the stock exchange.

Microsoft lost $US492 million during the June quarter, as opposed to a profit of $5.87 billion a year ago.

Much of the loss is down to the $US6.2 billion write down of aQuantive, bought as a way to compete against Google. The product failed to become profitable for Microsoft.

Despite the loss, revenues increased for the software giant in the June quarter by four percent to $US18.06 billion.

Microsoft's Server and Tools business registered 13 percent growth in the June quarter, and its business division seven percent, on the back of increasing Office 2010 sales.

Revenues for the Windows and Windows Live divisions dropped by 13 percent in the fourth quarter, however.

Chief executive Steve Ballmer said new versions of Microsoft's Windows operating system, Windows Phone platform and the Office productivity suite would drive company's business forward this year. Windows 8 goes on sale October 26 this year in the United States.

PC sales have softened this year, due in part to consumers waiting for Windows 8 and systems running the new operating system to be released, according to analyst firm IDC. 

The important US PC market shrank by 4.4 percent in the second quarter of this year, which IDC said was a result in part from Windows 8, as well as consumers delaying purchases due to market saturation.

Weak economies in the US and Europe also contributed to a global PC market slowdown. The analyst firm said it did not expect the situation to improve for the next quarter, and has a conservative outlook for the following one.

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