Software
Windows Sales Way Down, Microsoft Loses Money (Versus Last Year)
Posted by Matt Buchanan at 8:33 AM on April 25, 2008
Here are the meaty bits in the cold platter of numbers that is Microsoft's quarterly earnings report. Windows sales are way down (the client division, which makes Windows, saw sales drop by 24 percent vs. last year). Office is doing alright, but they're losing their arse on online services. The entertainment division (Zune and Xbox) is balling, with revenue up 68 percent, making Xbox and Zune profitable for almost a year now. But bottom line, Microsoft's income was down 11 percent from last year. [Microsoft, WSJ via Vwag]

Comments (AU Comments · US Comments)
There are currently no AU comments for this post.
asuteke
Posted 9:39 AM 25/4/08
Makes sense. No one I know particularly cares for Vista. I personally prefer XP over Vista (But Mac OS over XP). Holds the same for businesses. Who would want to upgrade to a OS which requires you to upgrade all of your machines as well?
asuteke
diabolusunknown
Posted 9:37 AM 25/4/08
This is the worst article ive ever read. Read any other finance site, and they wont give that much negativity to these results like Giz has. They beat the street. Considering the economic crisis the US is in, thats now a good thing. No one was expecting them to do as well as they did last quarter, given they had success with their XBOX division, Office (massive success), and Vista in 2007.
Really pathetic, Giz.
diabolusunknown
92BuickLeSabre
Posted 9:35 AM 25/4/08
Do you know what's really awesome?
When a short post about a company's earnings turns into a back and forth between two random people who may or may not know something. It's even better when their traded insults are neither humorous nor creative.
And when people's mom's are brought into it, but there are no pictures, so I get to imagine whether or not these moms are really worth the trouble. (Is it impressive to have been with that Mom? Maybe. Maybe not. I mean, if it's my Mom...not so much. I wouldn't go near that. Then again, she is my Mom. But even if she weren't. I mean, she's pretty old to be honest.)
And the grammar battles! Cause really what are coolest than a Grammar Battle! But it's not the only way they show me how smart they are. These peers of mine. They use Abbv's! and jargon! They know things. I feel so smart just being around them!
Oh, and then when they get all serious about it? Like it's a Dance Off (You've been Served!!!) or a Rap Battle (8 Mile Biatches!) or a Cheer Off! ("Well, your trophies are bullshit, and you're a sadass liar.")
And everybody starts picking sides! And the flames fly! And no one remembers why they were even there! And then Mel Gibson stands at the top of a mountain and screams something vaguely inspiring and appropriate and there's a huge battle! And Rob Schneider yells out from the crowd "You can do it!!!!"
And then someone gets Pwned or Owned or P0vv(side-Z)#D.
Then there is a slow clap.
It's really awesome.
92BuickLeSabre
LagunaSol
Posted 9:33 AM 25/4/08
The Xbox is profitable, despite the fact Microsoft is having to replace some users' consoles 2, 3, 4 times?
Unlikely.
LagunaSol
marm0lade
Posted 9:32 AM 25/4/08
@justinpe:
He probably keeps coming back just for the sheer joy of making you look foolish. Which is quite easy.
Ridiculing someone for reading and commenting on a story is a pretty weak way to try and discredit there comment.
He never said he "doesn't give a shit", and commenting on the flaws of the article seems like a pretty good reason to comment.
Educating users on the article's flaws and defending his position is not trolling. Sorry. But ridiculing someone for commenting in the first place and ignoring his points IS trolling.
marm0lade
DW
Posted 9:24 AM 25/4/08
Windows division down; XBox and Zune division up?
What kind of bass ackwards world are we living in?!
DW
Sleeper_Service
Posted 9:22 AM 25/4/08
@justinpe:
No, I was just making you look like the fuckmuppet you are.
And are you claiming that I am your mother's pussy (I mean I know I've been there but that's not the same thing) as that's how your sentence reads?
Sleeper_Service
AJ_Syrinx
Posted 9:16 AM 25/4/08
@justinpe: p0wned by Sleeper_Service, dude!
AJ_Syrinx
justinpe
Posted 9:13 AM 25/4/08
Hmmm.... Back again. Re-reading the article that you detest so much? And posting again none-the-less. I am not surprised that you own stock in APPL and MSFT; however, why in the hell would you troll around on an article that you already said was stupid? I understand quarterly results may interest you, but why would you want to get this info from stupid Giz writers, as you call them? Troll.
Oh yeah, you're momma's pussy!
justinpe
Sleeper_Service
Posted 9:08 AM 25/4/08
@justinpe:
I'm an MSFT and APPL stockholder. Things like quarterly results kind of interest me.
Would you like to make any more stupid statements or are you done for today?
Sleeper_Service
FreemanGman
Posted 9:07 AM 25/4/08
It's really easy for Apple to make money considering there are so many Apple fanboys out there who are willing to give away cash every time some small revision of an Apple product comes out.
FreemanGman
Marty_MacFly
Posted 9:05 AM 25/4/08
"... making Xbox and Zune profitable for almost a year now. "
The Xbox, maybe.
I notice there's still no Zune figures. What's it been, a year now since we've heard anything on that?
Marty_MacFly
justinpe
Posted 9:02 AM 25/4/08
@Sleeper_Service:
Yet you read the articles and take the time to post on them..... Hmmm. Sounds like you are quite the loser with nothing better to do than read articles you don't give a shit about or completely disagree with.
justinpe
bobdobbs
Posted 9:00 AM 25/4/08
IBTD (in before the delete)
bobdobbs
Sleeper_Service
Posted 8:59 AM 25/4/08
See this is what bugs me about some - not all - of the Giz writers. The endless need to bash MS and praise Apple regardless of the actual facts involved.
It probably all stems from their college days when Apple were the cool rebels fighting against MS's evil empire. Unfortunately, they don't seem to have realised that time moves on and the rebels one once venerated are now a brutal and totalitarian regime themselves.
But then once you've been conditioned to a daily hate it's hard to break the habit.
Sleeper_Service
ashokcsn
Posted 8:52 AM 25/4/08
a poorly written skewed article by someone who does not know what deferred sales are. Please read about these things before writing such articles
ashokcsn
Sleeper_Service
Posted 8:45 AM 25/4/08
matt, I take it you don't understand the earnings differentials? You know the ones connected with the deferred sales of Vista reported in last year's equivalent quarter?
Because otherwise you wouldn't have posted such a fundamentally stupid topic.
Come back when you understand economics and don't just feel like having a pop at MS, k?
Sleeper_Service
Babysealclubber
Posted 8:45 AM 25/4/08
Oh yeah, and the1.42 billion dollar fine from the EU is a substantial part of that drop in income.
Babysealclubber
Babysealclubber
Posted 8:40 AM 25/4/08
I wouldn't describe a 4 billion dollar profit as "losing one's ass," but yeah, Microsoft is in a bad way.
Why such limited coverage?
Babysealclubber
shamoononon
Posted 10:01 AM 25/4/08
Hey!! My stocks are up, go me!!
shamoononon
quikboy
Posted 9:49 AM 25/4/08
It's not just MS. The recession in the US economy is probably affecting all American companies.
I hope we'll bounce back soon.
quikboy
Mandatory_Field
Posted 9:49 AM 25/4/08
@92BuickLeSabre: Wow. That was sheer poetry....
Mandatory_Field
Topcat
Posted 9:45 AM 25/4/08
OMG! Microsoft is failing! Vista is selling fewer copies the longer it is on the market! It is going the way....every other software release does! Exclamation point!
Did anyone seriously expect Microsoft's profits to increase the year following one with a major OS release?
Topcat
Evangelion
Posted 10:19 AM 25/4/08
@bobdobbs: In before the lock. ;)
Evangelion
fuzzycuffs
Posted 10:14 AM 25/4/08
@diabolusunknown: I wish I could moderate comments because I'd get you a +
fuzzycuffs
schmere
Posted 10:52 AM 25/4/08
@92BuickLeSabre: That's some good shit.
schmere
92BuickLeSabre
Posted 10:49 AM 25/4/08
@frigg: I'm sorry frigg, are you referring to two specific people? I was just talking generally. Nonetheless, I've found that marriage makes people no less random.
92BuickLeSabre
frigg
Posted 10:46 AM 25/4/08
@92BuickLeSabre: "Do you know what's really awesome? When a short post about a company's earnings turns into a back and forth between two random people "
How do you know they're two random people? For all we know they're married.
frigg
One2ManyCords
Posted 10:34 AM 25/4/08
@92BuickLeSabre:
Dammit I shed a tear.... you sir are why they out stars...
Touche'
One2ManyCords
frigg
Posted 11:21 AM 25/4/08
@92BuickLeSabre: Point well taken. I was just speculating that the absurdity you pointed out about the evolution of an online catfight between two seemingly random people might in reality be a highly-scripted exercise between an elderly couple, married for 60 years, at the direction of their therapist, for all we know. But as you said, that would be no less random.
frigg
resource
Posted 11:49 AM 25/4/08
Apologize for this foolish post.
It's wrong and a shock tactic. I don't even like MS but they did not lose money.
resource
danielsmi
Posted 11:48 AM 25/4/08
Umm isn't it obvious that sales are down cause this is the quater that Vista was first released to the public last year! Isn't it obvious that sales will be down cause of the initial rush of early adopters.
For fairness now you must make a post about iPhone sales being down this year on June 29 as compared to June 29th of 2007 cause they sold a butt load when the first came out and now the sales aren't as high that means everyone must be defecting to windows mobile!
I'm sorry but whoever posted this is an idiot!
danielsmi
strider_mt2k
Posted 11:43 AM 25/4/08
@92BuickLeSabre:
You
Rock
strider_mt2k
MINI Driver
Posted 12:24 PM 25/4/08
@Sleeper_Service:
I think you've made enough stupid comments for everyone...
Your attitude, lack of respect, and gutter mindset is a perfect example for people of how not to behave online.
MINI Driver
drewheyman
Posted 1:18 PM 25/4/08
Microsoft's net profit for the three months ended March 31 fell to $4.39 billion, or 47 cents per share, from $4.93 billion, or 50 cents per share, in the same period last year, the company reported.
Revenue edged up to $14.45 billion from $14.4 billion in the year-ago quarter.
-------------------------------
....From Yahoo Finanace..
Those are pretty sad numbers and in the corporate world, if you ain't growing, you are dieing. MS has always sandbagged defferred sales (to the point it's been discussed in front of the SEC more than once), so that doesn't really fly. Expect something drastic in the coming months.
drewheyman
diabolusunknown
Posted 1:48 PM 25/4/08
@drewheyman: Times have changed my good friend. In 2007, consumer confidence was strong, because we were not bombarded yet with the housing crisis, and CEO's, banks, etc werent out in the open about supporting such horrible tactics.
This year is entirely different. Again, no one expected Microsoft (or any company for that matter) to do better than what they did last year.
Those are not sad numbers. They expected 44 cents a share, but got 47. They beat what was expected. Sad numbers my ass.
CNN: Software giant Microsoft Corp. announced its fiscal third-quarter earnings Thursday, posting a quarterly profit that beat expectations thanks to strong sales of server software and Xbox 360 game consoles.
diabolusunknown
olafson
Posted 3:11 PM 25/4/08
The numbers were "OK." But not awesome.
The problem is "the street" is a bunch of fucking short sighted lemmeings driven by computerized auto-trading with no long term vision.
A company has to perfrom in the most insane manner to get anywhere in the market. MSFT continues to print money like they have their own press, even after serving as the EUs personal ATM, and they still get buttraped.
There's no way MSFT will grow like a fucking startup when it's as big as it is. But the tards on "the street" can't seem to grok that.
Now, compound that with the fact that SteveB does or says something really stupid every time the stock seems to be moving in the right direction and well, MSFT shareholders are fucked.
olafson
LagunaSol
Posted 3:31 PM 25/4/08
@olafson:
You don't appear to understand that investing means betting on *growth*. Yes, MS will continue to rake it in on overpriced, mediocre software with huge profit margins. But at 95% of that particular market, where's the growth potential? Nowhere.
And their attempts to expand by riding Apple's comet trail with a me-too product (Zune) or breaking into Google's market with a me-too product (Windows Live Search) or any number of other lame attempts to bulldoze their way into new territory with lame me-too products are going nowhere.
So keep sinking your money into MSFT. I'm sure they'll "innovate" something new eventually. Bwa ha ha ha!
The days of MSFT being a growth stock are long behind us.
LagunaSol
Topcat
Posted 5:13 PM 25/4/08
@drewheyman: Seriously, can you not interpret the data? Microsoft released Vista in the first quarter of 2007. The first quarter of 2008 is obviously going garner much slimmer profits in comparison. Does that mean Microsoft's "dying"? Not at all.
@LagunaSol: Microsoft's got tons of growth potential. They (still) have the de-facto standard for office productivity software, and for good reason.
Zune is more than a "me-too" product, with innovative features that even Apple hasn't put into their subsequent players. Zune's growth into other markets (Canada this spring) is definitely indicative that the business is doing well.
Microsoft Surface is rolling out to quite a lot of admiration as well. I've played with one at an AT&T store and it's pretty damn incredible. Serious potential for a lot of money there.
The 360 continues to sell well in North America, and has pioneered the paid online gaming service which has an astounding attach rate with the console, not to mention popularizing digital distribution and creating support for small developers.
I might not have a big ole MSFT rose in my snatch, but it's not difficult to see that the company is still innovating. They've got problems, too, of course.
Topcat
Darkest Daze
Posted 5:23 PM 25/4/08
I've got to say, I installed Ubuntu 8.04 today, and if I could play all of my games on it, I would dump Vista in a heartbeat. This is the first time I can take Linux serious AND like the user interface more than Windows.
MS is going to have to put some serious effort into Windows over the next couple years to keep user interest between OSX and Linux nipping at their marketshare.
Darkest Daze
The Full English Please!!
Posted 8:12 PM 25/4/08
Why dont you report the figures, like you did with the apple report.
Apple made £0.6 billian prof
Windows made £2 billion
Nintendo £1.25 billion
in my eyes apple is still a fairly small company but the american technology loads mouths love affire with the company makes it seem soo big.
REPORT THE FIGURS LIKE YOU DID FOR THE APPLE REPORT AND STOP PUTTING A DEPRESSING LOOK ON EVERY WINDOWS BLOG ON THIS WEBSITE, NOT EVERY READER IS AN APPLE FUNBOY EVEN IF THEY DO OWN A MAC
The Full English Please!!
octopussy
Posted 11:35 PM 25/4/08
and btw, there's nothing M$ can do to stop its trajectory down. It is in free-fall right now. John C. Dvorak wrote an article called M$ is dead in the waters that explains it nicely.
octopussy
octopussy
Posted 11:31 PM 25/4/08
who told you M$ paid the EU fine? The big problem in europe is that they do not know what to do with M$, as they never follow the rules and never pay the fines. They throw a bunch of lawyers to appeal and keep the case rolling... I would solve that fast: simple, block sells of M$ products in europe for a month to see if they can handle the pressure from the dealers. Simple and clean.
octopussy
N@tedog
Posted 11:24 PM 25/4/08
This article is so shortsighted. I think Giz needs to rethink their mission statement. Or at least adhere to it.
N@tedog
Secret Agent Man
Posted 12:09 AM 26/4/08
@92BuickLeSabre:
92 BLS, I have to tell you... you are among the few commenters here that is a voice of reason. I've said it before, but when Gawker had a strict commenter policy, the comments were (mostly) witty or informative.
There has been a slow decline into childish bickering, and the comments have stopped being enjoyable to read.
The fact is, this is not a investment site. As an investment professional, I utilize the Bloomberg terminal at my desk for investment information and news, not the gadget blog that I enjoy reading. In the past, I have made polite suggestions to editors, but insulting them is neither appropriate or useful.
as savvy as Sleeper_Service undoutedly thinks that he is, if he were any level of professional, he would not get worked up over something as insignificant as a blog posting. The sad fact is, he's probably a 19 year-old (nothing wrong with that) who likes to puff up his chest after watching "Fast Money" on CNBC and walk around talking about what a great investor he is.
Matt, you did fine, if I started coming here for investing news, I'd have no right to complain about accuracy.
Secret Agent Man
drewheyman
Posted 11:55 PM 25/4/08
@Topcat: Microsoft has grown at about 25% a year for the past 15ish years, with only one or 2 down quarters. $14.40b - $14.45b is gonna take quite a bit of growth in the next 9 months of the year to match that. Up years, down years, it's never mattered before.
drewheyman
Scrubadub
Posted 7:20 AM 26/4/08
I love lamp.
Scrubadub
Sleeper_Service
Posted 8:31 AM 26/4/08
@92BuickLeSabre:
It's a fair cop. I'll come quietly.
Sleeper_Service
Sleeper_Service
Posted 9:13 AM 26/4/08
@Secret Agent Man:
No, I'm a 39 year old MI Manager for a large financial organisation and I do have a reasonable investment portfolio. I also live in the UK so don't watch Fast Money.
As such you've made a series of false assumptions there which kind of says more about you than it does me.
Anyway....
The point is that Matt's article is:
a) Wrong
b) Couched in the gloating anti-MS way that has become so typical and so wearisome of late.
Gizmodo is generally good, I just wish some of the writers would exercise a little more neutrality at times.
Sleeper_Service
Brian Lam
Posted 8:57 AM 26/4/08
Any ban requests in this thread? I've been upgraded to a Ban Bastard Sword.
Brian Lam
matt buchanan
Posted 9:58 AM 26/4/08
@Sleeper_Service: And for the record, the only Apple product I own is a 2nd-gen nano. I have three computers with Vista and two with XP sitting in my apartment right now.
matt buchanan
matt buchanan
Posted 9:56 AM 26/4/08
@Sleeper_Service: I'm not seeing the gloating—I didn't knock Zune, or Windows, or even Microsoft. Their profit for this quarter vs. last quarter, income down 11 percent, fact. The Windows sales assessment? The Wall Street Journal goes so far as to say "Vista Drags on Microsoft." Online services lost $280 million. There weren't any real assessments in the post, it was a spew of numbers.
matt buchanan
Sleeper_Service
Posted 6:37 PM 26/4/08
@matt buchanan:
Matt it's profit that fell 11%, not income - income was up from $14 billion to $14.5 billion. Profit for the same quarter last year was inflated because of deferred Vista sales.
Now don't get me wrong: MS are kind of struggling because of weak direction at the moment - Ballmer isn't giving the guys at Redmond a clear enough steer as to where they should be going and, frankly, I just don't think he's the man for the job.
That said, MS had an OK quarter - not great and certainly not as good as Apple's - although from an investor's point of view looking at revenue against market capitalisation Apple are a nightmare because they'll either go through the roof or it'll all come crashing down.
As for the accusations of Apple bias, OK, sorry. I guess your article was just the tipping point for what appeared - to me at least - to be a constant stream of vindictive sniping at MS and excessive veneration of Apple.
Anyway, that's still no excuse for me being rude about it so apologies to anyone I offended.
Sleeper_Service
GadgetPlay
Posted 1:46 AM 27/4/08
@Brian Lam: No, but I am in the market for a slightly used Ban Hammer.
GadgetPlay