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Sat, Apr 25, 2009 - Page 10 News List

Microsoft revenue falters

FIRST TIME FOR EVERYTHING: The company’s quarterly revenue dropped for the first time in its history, but it is still one of the world’s richest and most profitable firms


Microsoft Corp said on Thursday its quarterly revenue fell from the previous year for the first time in its 23-year history as a public company, while its profit dived 32 percent.

The declines illustrated the toll the recession has taken on the world’s largest software maker, even though Microsoft remains one of the richest and most profitable companies. In January, Microsoft said it needed to resort to its first mass layoffs, cutting 5,000 jobs, and on Thursday it announced it would do away with merit pay increases for employees in the next fiscal year.

Microsoft said the current quarter would probably still be weak in the markets for PCs and computer servers. The company did not issue earnings guidance for the rest of the year, and it ­offered no hope for a rebound in the current quarter.

“I didn’t see any improvement at the end of the quarter that gives me encouragement that we’re at the bottom and coming out of it,” said Chris Liddell, Microsoft’s chief financial officer.

Redmond, Washington-based Microsoft said that in its fiscal third quarter, which ended on March 31, profit was US$2.98 billion, or US$0.33 per share. In the same quarter of last year, Microsoft earned US$4.39 billion, or US$0.47 per share.

Microsoft’s profit included a US$290 million charge for severance from some of the layoffs announced in January. The software maker also wrote down US$420 million related to investments that lost value.

Revenue in the last quarter slipped 6 percent to US$13.6 ­billion, missing analysts’ expectations for US$14.1 billion.

“I think it was a good quarter in a tough environment,” said Taunya Sell, an analyst for Ragen MacKenzie, a division of Wells Fargo, adding Microsoft did “the two things you can do in a tough environment — try to keep costs down and make sure customers still want to buy your products.”


Meanwhile, Yahoo Inc said on Thursday it plans to close GeoCities, a Web site publishing and hosting service it bought in May 1999 at the height of the dot-com boom for around US$3 billion in stock.

The service will be shut down later this year. Visitors to the site now see a message that says new GeoCities accounts will not be available and gives them the option to sign up for Yahoo’s Web hosting service for US$5.98 a month.

It is not clear when Yahoo made the move, but a spokesman said in an e-mailed statement that the decision was recent.

GeoCities is not the only Yahoo service to get the ax — Yahoo Briefcase, Farechase, My Web, RSS ads, Yahoo Pets, Yahoo Live, Kickstart and Yahoo For Teachers all are being eliminated as well.

The search giant also recently outsourced Launchcast radio to CBS Corp.

“As part of Yahoo’s ongoing effort to build products and services that deliver the best possible experiences for consumers and results for advertisers, we are increasing investment in some areas while scaling back in others,” the statement said.

In a sign of its ongoing troubles, Yahoo said on Tuesday that it will lay off nearly 700 workers, the company’s third round of job cuts during the past 14 months.

The company earned US$118 million during the first three months of the year. That represents a 78 percent drop from net income of US$537 million in the year-ago period.

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