updated 04:40 pm EDT, Thu April 22, 2010
Microsoft posts record winter quarter
Microsoft this afternoon reported its best-ever winter quarter owing in large part to Windows 7. Revenue from its core OS jumped 28 percent year-over-year and helped Microsoft get an all-time high $14.5 billion of revenue. It also touted much improved growth in revenue from Bing search ads, Xbox Live and web-based services.
The growth was a mild six percent year-over-year but would have been eight percent if not for having to set aside $305 million for an Office 2010 upgrade program, which promises a free copy of the productivity suite for those who buy Office 2007 in advance. The 2010 edition ships May 12th and should see the deferred revenue counted in July.
Net profit was also high at $4.01 billion, or 35 percent better than winter a year earlier.
Microsoft claimed the surge as a milestone as it should mean that over 10 percent of all PCs are already running the new OS. The shift would make Windows 7 the quickest-selling OS ever and would go a significant way towards erasing a bad history with Vista, which many companies and individuals had actively avoided over real or perceived incompatibility and performance problems.
In terms of the pure percentage of existing users, Mac OS X Snow Leopard currently has a larger share as its low price and the relatively quick-upgrading Mac user base have seen it replace Leopard and older platforms at a faster rate.
The company was nonetheless quiet on the handheld side of its business, most notably the phone OS and Zune divisions. The Zune HD isn't known to have significantly reversed course, and phone efforts are in a reboot mode as the company shifts attention from Windows Mobile to Windows Phone 7 and readies the launch of the Kin One and Two at Verizon next month.
Online services have also seen mixed results. While revenue was on the rise, cloud features at Microsoft actually lost more money and bled $713 million versus $411 million a year earlier.