Microsoft Reports Loss After a Write-Down
By NICK WINGFIELD
SEATTLE — An accounting charge related to Microsoft’s ill-fated acquisition of an online advertising business led to a loss for the software giant’s last quarter, its first in more than two decades as a public company.
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* Times Topic: Microsoft Corporation
But while that loss can be played down as an anomaly for a company that has been a reliable moneymaker for decades, weak sales in Microsoft’s Windows business cannot. Microsoft said on Thursday that its revenue from Windows fell 13 percent in the fiscal fourth quarter, which ended June 30.
Windows sales looked worse than they really were in part because Microsoft had to change how it recognized that revenue because of an offer it has extended to people who buy PCs running Windows 7. Under that offer, users can pay $14.99 to upgrade to Windows 8 when it comes out in October.
If Microsoft had not had to defer a portion of its Windows sales — $540 million in this case — its Windows revenue would have declined 1 percent, still a dismal performance that underscores the challenges in the traditional computer business right now.
Sales in the PC market have stagnated as consumers have diverted their technology spending to more exciting technologies, including smartphones and tablet computers like the iPad. Microsoft and other companies in the PC industry are hoping to reignite growth in the business with the release of Windows 8, an operating system that has been revamped to work better on touch-screen devices.
The blockbuster success of the iPad has forced other significant changes at Microsoft, most notably the company’s decision to design and sell its own tablet computer, called Surface. Technology executives and analysts say they believe Microsoft chose to make Surface, the first computer of Microsoft’s own creation, after its partners