This article was written on April 25, 2008 by CyberNet.
Microsoft’s fiscal 3rd quarter has just come to an end and their earnings have been reported. Overall, they saw their net-income decrease by about 11%. Part of the drop is due to the money they had to charge, $1.42 billion, to cover that whole fiasco they got into with the European union and their antitrust investigation. The other part of that drop in revenue, as the Wall Street Journal explains, is because of a “revenue influx in the year-earlier period associated with sales of the Windows Vista operating system.” Last year at this time, Vista had just arrived on scene and people were buying new computers with Vista installed, left and right.
During the conference call report from Microsoft, they also brought up the bid that they have made for Yahoo. We’ve already known that they had no plans to increase their offer of $44.6 billion, but Microsoft reiterated this once again. Chris Liddell who is Microsoft’s chief financial officer, l said that Yahoo is expecting an unrealistic amount of money. He was quoted as saying, “Yahoo continues to have unrealistic expectations of value. I’ve yet to see any evidence that our bid undervalues them (Yahoo).” Then he went on to say, “The best argument that I’ve heard for raising our bid – that we can afford to – is not one that I favor.” Microsoft may just have to walk away from Yahoo empty-handed.
Other news coming from the conference call:
- Vista Sales Update
- Entertainment division update
Regarding the Vista sales update, the last time we heard any number was in January and at that point, 100 million copies had been sold. Now they’re saying that a total of 140 million licenses of Vista have been sold which tells us that between January and now, 40 million licenses were sold. That’s not a bad number at all, and it doesn’t include volume licenses sold to corporations, but it does include those who are taking advantage of the “downgrade” to XP service that we’ve previously mentioned.
A big winner this quarter, once again comes from their entertainment division. This particular division saw an overall growth of 68% which means they’ve got the sales of Xbox 360 consoles and games to thank. Despite the fact that Microsoft saw their net-income decrease by about 11%, they still rank #44 on Fortune 500′s annual ranking of America’s largest corporations based upon revenue and profits.
In a nutshell, here’s what we can gather from their earnings report:
- Sales of Windows weren’t as strong as expected
- Sales of Office and other business apps were slightly down
- Sever and tools sales were up quite a bit
- Revenue from entertainment division was way up
- Outlook for their 4th quarter 2008 and fiscal year 2009 is optimistic
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Windows only 
Returning to Vista, in case you’re thinking about purchasing the OEM version of Vista, the picture below shows what you’ll get. It’s the same ole’ Vista minus the fancy packaging. Remember, typically when you purchase the OEM version, you must purchase hardware along side of it. This is because OEM is licensed for new computer purchases only.
