Microsoft has reported a staggering $492 million loss in the three months leading to June, the first quarter that the computing giant has seen profits dive in its entire history.
The figure is in stark contrast to its $5.9 billion profit recorded just a year ago. The fall has been partly attributed to the fact that Microsoft wrote down the value of its online advertising business Aquantive by $6.2bn.
Google profits up
While the firm may be left reeling from the first loss since it joined the market in 1986, Google will be celebrating an 11% increase profits, with a 39% increase in revenue over the quarter compared to last year. This brings net income on sales to a reported $2.79 billion.
Google’s success is said to have been boosted by the recent acquisition of the Motorola smartphone business. Despite the knock to Microsoft’s confidence, the firm did report a 4% increase in revenue to $18.06 billion.
New Microsoft products
With the launch of Windows 8, the latest version of Microsoft Office and the Surface tablet on the horizon, the company should be able to reverse its fortunes. Yet some analysts remain cautious that new versions of Office will make the grade.
Guy Creese, a Gartner analyst stated:
“For a long time, with each new version, Microsoft has focused on giving Office a gazillion new features, which helps with completeness but not usability,”
Creese also argues that Microsoft must recognise the growing movement towards “bring your own device”, where software can be accessed from mobile users’ device of choice.
“If Microsoft pooh-poohs that reality and says it’ll only put Office on Windows 8 tablets, that means they just don’t get it,”
Industry analyst Michael Osterman, from Osterman Research, also argues that an Office version for the iPad needs to be ready sooner rather than later, as the tablet is already the device of choice for many.
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