Overall, the results that Microsoft shared yesterday from their 3rd quarter efforts were good. Overall, revenues were up 6% to over $17 billion and net income was just over $5 billion. All in all, pretty darn good.
It appears that in order to fund the company’s efforts in the online world moving forward this performance will need to continue. You see, the online unit lost $479 million in the quarter. But hey, that sure beats the fact that last year’s Q3 results netted a $779 million loss so this quarter is really a good thing. Check out this slide from the Microsoft announcement.
I understand that you have to try to make things sound good even when they aren’t quite that way. But Microsoft consistently produces quarterly losses in their online efforts that are measured in large percentages of $1 billion. That can’t go on in perpetuity can it?
Let’s face it. Microsoft really wants to be in the online space but they are rarely mentioned in a positive light. In fact, they have to count on Google to seriously stub a toe to make true inroads as a search competitor. The degree to which Google needs to screw up in order for Bing to be a truly viable alternative search engine is quite high. It’s not impossible that something like that couldn’t happen but the reality is that it is pretty unlikely.
And my final question. If the Online Services Division reported $707 million in revenues for the quarter and STILL lost almost a half a billion dollars, where in the heck does all of that go? Anyone from Microsoft want to fill us in?