Microsoft: Online Services Stinking

Microsoft's online services division, which includes Bing, lost $728 million in the second quarter -- and $2.6 billion in the past 12 months, according to Microsoft earnings released late Thursday. "Microsoft still hasn't turned a profit in that unit," notes Overall, Microsoft still managed to grow its overall sales by 8% over the past three months to $17.4 billion -- despite a sales slump in its Windows division. (Windows revenue fell 1%, marking the second straight quarter of declines.)

The software giant also continued to sign on long-term contracts with business customers in its Office and server units, building up $17.1 billion in promised, but yet-to-be-earned revenue. The company also in May put in a bid to buy Skype, which it hopes to leverage tocompete with Cisco's WebEx online meeting client. Also last month, Microsoft launched its Office 365 service in an attempt to build up its Office base and challenge Google Apps.

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