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Microsoft Annual Earnings Recap

By now you'll have heard that Microsoft is a $60 billion company, on the strength of 18 percent year-over-year growth. Operating income hit $22.5 billion a year, meaning Microsoft is approaching $2 billion a month in profit. Not a bad way to go out for semi-retiring chairman Bill Gates. Go here for our news story on the financial results.

The earnings documentation that Microsoft released last week was short on direct references to the channel, although COO Kevin Turner did give a nod to "strong execution by our partners" among four generic components of success in his canned quote for the press release.

There were a few items of interest in reading through the fine print. For one, the usually conservative company's projections for revenues next year are in the $67 billion to $68 billion range.

For another, there are a lot of references to increased costs -- nearly a billion dollars in all. According to company documents, those costs reflect "increased data center and equipment costs, online content expenses, and increased costs associated with the growth in our consulting services, partially offset by decreased Xbox 360 costs."

And nearly every business unit reports costs from increased headcount. The company is up to 91,259 employees as of June 30, an increase of 12,694 people in a year or 16 percent. Bill Gates' scrappy little company that used teams of smart, focused programmers to beat giant IBM is no more. Not that it's been around for awhile, but it hit home in this earnings release.

Posted by Scott Bekker on July 22, 2008


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