Microsoft's Online Division Revs Soar 14%

by , Apr 28, 2011, 5:37 PM
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Ballmer

Beating Wall Street's forecasts, Microsoft reported strong quarterly sales and profits on Thursday. Year-over-year, the software giant saw revenue rise 13% in the third quarter to $16.43 billion.

Revenue from Microsoft's online services division grew 14% year-over-year, which the company attributed primarily to increases in search revenue. Bing's U.S. search share increased to 13.9% this quarter.

"We delivered strong financial results despite a mixed PC environment, which demonstrates the strength and breadth of our businesses," Peter Klein, CFO at Microsoft, said Thursday. "Consumers are purchasing Office 2010, Xbox and Kinect at tremendous rates, and businesses of all sizes are purchasing Microsoft platforms and applications."

The Entertainment & Devices division grew 60% year-over-year -- fueled by Kinect for Xbox 360, the fastest-selling consumer electronics device in history, continued strong Xbox 360 console sales and growth of Xbox Live.

Overall, operating income, net income and diluted earnings per share for the quarter were $5.71 billion, $5.23 billion, and $0.61 per share, which represented increases of 10%, 31% and 36%, respectively, when compared with the prior-year period.

Diluted earnings per share included a $0.05 tax benefit primarily related to an agreement with the U.S. Internal Revenue Service to settle a portion of their audit of tax years 2004 to 2006.

Microsoft Business Division revenue grew 21% year-over-year. Since its release last spring, Office 2010 has become the fastest-selling version of Office in history, according to the company, while the integrated innovation with SharePoint, Exchange, Lync and Dynamics CRM is driving significant growth for the division.

Server & Tools revenue grew 11% year-over-year -- the fourth consecutive quarter of double-digit growth, according to Microsoft.

Meanwhile, while Microsoft heralds Windows 7 as the fastest-selling operating system in history, revenue for the segment was down 4% in the third quarter. Looking ahead, Microsoft reaffirmed operating expense guidance of $26.9 billion to $27.3 billion for the full year ending June 30, 2011.

1 comment on "Microsoft's Online Division Revs Soar 14%".

  1. Chris Nielsen from Domain Incubation
    commented on: May 2, 2011 at 8:56 p.m.

    Not a surprise to those that do search advertising on Bing(I now realize that the name is not a tribute to Bing Crosby but one way of sounding like a cash register). The higher numbers from the Yahoo aquision (don't say anything to Yahoo, they don't know yet...) are great, but I feel sorry for any advertiser opted-in to their content network. We were for the first month or two but when we saw what a ROI black hole that was we turn it off on all accounts which stopped the bleeding. I can't wait until the husk of Yahoo is cast off by the emerging MSN. Then we may have a really good search marketing provider as an option to the other one that is less and less worthy of the affection we used to show it.

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