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Microsoft profits rise despite stalled Windows sales

Server and entertainment divisions take up the slack
Fri Jul 19 2013, 12:09

SOFTWARE DEVELOPER Microsoft reported a 10 percent increase in revenues despite Windows sales remaining largely stagnant.

Microsoft's much maligned Windows 8 operating system did not help the firm in its fiscal fourth quarter. The firm reported revenues of $19.8bn, a 10 percent rise from the same period in 2012, and a $4.9bn profit, overturning a $492m loss in the previous year.

Microsoft's increasing revenues did not come from its flagship Windows division, which saw sales remain essentially flat from the same period last year. Rather the firm saw growth in its server and entertainment divisions, which helped it shrug off what many industry watchers believe was a lacklustre Windows 8 launch.

Microsoft CEO Steve Ballmer also said the firm has taken a $900m hit on its Surface RT tablets, something that is visible through the deep discounting as the firm tries to clear stock. However Ballmer is likely to be less worried about the impact of the firm's loss on Surface RT tablets than the multi-billion dollar hit Microsoft took with its purchase of Aquantive in 2007.

Ballmer tried to move on from Windows 8 by mentioning Windows 8.1, which will bring back desktop features such as the Start button and being able to boot directly to the desktop. He said, ""We are working hard to deliver compelling new devices and high value experiences from Microsoft and our partners in the coming months, including new Windows 8.1 tablets and PCs."

However Microsoft's first attempt to sell tablets seems to have lost a lot of cash and one has to wonder how much more money it is willing to lose on tablets before it throws in the towel. µ


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