Windows Takes a Hit

The good ship Microsoft didn't make it unscathed out of troubled waters. The company's fourth-quarter financial results showed 29 percent hit on its Windows side, with Windows revenue dropping nearly a billion dollars quarter to quarter.

And there was trouble all around. Every Microsoft division showed a loss for the quarter -- a new low. Microsoft's biggest moneymaker, Windows, was its biggest loss leader. The only other division close was the Entertainment and Devices Division, down 25 percent quarter to quarter.

Every company besides Goldman Sachs is feeling the pinch these days, but Microsoft is known as one of those steady-sailing large-cap stocks. The keel may pitch, but the ship doesn't take on any water...usually. It seems that Microsoft has a bigger problem in that new OSes may not be the catalyst for sales of new PCs and servers. Microsoft still hasn't announced pricing for Windows 7 on netbooks, which sell well but also cut into its profit margins. Netbooks are still running XP, and a lot of business users are also running XP -- quite happily, it seems.

Are we just seeing the waning days of Vista reflected in Microsoft's financial report? Will Windows 7 turn the ship around when launches in October? Where did Microsoft go wrong? Let Doug know at dbarney@redmondmag.com.

Posted by Kurt Mackie on July 27, 2009 at 11:53 AM