Microsoft posts first ever loss, no cause for panic

email article email article print article print article tip @techmeme

It was bound to happen. Microsoft has posted a quarterly loss for the first time in its history. A US$6.2-billion writedown isn’t exactly great for profit-taking.

The Redmond-based tech giant reported a US$192-million loss this quarter. While that might be a “far cry” from the US$5.9-billion it reported during the same period last year, it’s worth looking at it with a little perspective.

It’s a little weird to be saying so with such big numbers, but US$192-million is a relatively small loss to suffer after that massive writedown. The fact that Microsoft can take that hit and keep going, not just as a business, but as one of tech’s giants, shows just how dominant it’s been over the last 26 years. It can still be dominant.

If it wants to do that, keeping up with what people want is no longer enough. It also has to innovate and make products that, somehow, beat the likes of Apple and Google when it comes to “coolness” and usability.

That said, it still has an incredibly solid financial base from which to do that. It reported US$18-billion in operating revenue in this quarter, up a billion from the same period last year, representing four percent annual growth.

“We delivered record fourth quarter and annual revenue, and we’re fast approaching the most exciting launch season in Microsoft history,” said Microsoft boss Steve Ballmer.

Imagine what that growth might have been if Windows sales weren’t suffering because of flatlining PC market. The Windows & Windows Live Division revenue declined 13% for the fourth quarter and three percent for the full year. Imagine what they’ll be if the final Surface released to the public is as good as it looks.

In that regard, the company will take hope from the fact that its Entertainment and Devices Division revenue grew 20% for the fourth quarter and eight percent for the full year primarily reflecting the addition of Skype.

The fact that Xbox, even with the current model fast approaching the end of its lifespan, has now been the top-selling console in the U.S. for 18 consecutive months tells us something. Microsoft isn’t just capable of building devices, it’s capable of building successful devices.

Hell even Bing’s growing. Microsoft claims organic US search market share was 15.6% for the month of June 2012, up 120 points from the prior year period. It’s still not a massive threat to Google search, but the company must be doing something right with it.

If the company really wants to make sure that Apple has no space to breathe in any of the spaces it plays in then it has to make sure every one of its products is as slick, lean and valuable to the company.

It can do that, but only its ruthless with those parts that aren’t. Sometimes that ruthlessness might smart, but they won’t hurt forever. Not when the profits roll back in at any rate.

email article email article print article print article

Related articles

Topics for this article

[ advertising enquiries ]

Share
  • BURN MEDIA TV

    WATCH THE LATEST EPISODE NOW
    Latest Episode
    Unboxing the Acer Chromebook C720P

MORE HEADLINES

news

VIEW MORE

interviews

VIEW MORE

future trends

VIEW MORE

entrepreneurship

VIEW MORE

social media

VIEW MORE

facebook

VIEW MORE

twitter

VIEW MORE

google

VIEW MORE

advertising & marketing

VIEW MORE

online media

VIEW MORE

design

VIEW MORE

mobile

VIEW MORE

More in Microsoft, News

Nokia results confirm that it is in big trouble

Read More »