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Microsoft Posts Loss For First Time in 23 Years

microsoft by you.For the first time since it became a publicly traded company 23 years ago, Microsoft has announced a drop in sales from the previous year. Profits fell 32% from the third quarter in 2008 to $2.98 billion in the quarter ending March, 31st this year. Microsoft’s revenue, the money coming in as opposed to the profit on that money, is also down 6% to $13.65 billion.

The revenue losses appear to be across the board, hitting client sales (down 15% from last year), Business Division revenue (down 4.3%) and online services (down 14.5%). The entertainment division, including the Xbox 360 and Zune, saw a 2% decline in revenue and racked up a loss of $31 million compared to a $106 million profit in the same quarter last year.

So now the good news:

Xbox 360 console sales are up 30% over the same quarter last year. Microsoft sold 1.7 million machines from January, 1st to March 31st. Over the course of the fiscal year Microsoft is reporting global unit sales of 10 million (July 1st, 2008 to March 31st, 2009). The biggest problem Microsoft has faced in the past year is the lack of adoption for Windows Vista. Push-back from hardware vendors caused Microsoft to keep Windows XP much longer than they would have liked, and there wasn’t the drive for users to upgrade the way they did back when Windows 95 came out, and again when XP first came out.

In addition to the financial news today, Microsoft also made a significant Windows 7 announcement: a new form of compatibility mode which will allow XP applications to run under a Windows 7 desktop seamlessly to the user. This, combined with the pretty positive reactions to Windows 7 from technical sites like Ars Technica bodes well for Microsoft in the coming year.

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