Microsoft Reveals Income Fall, Sounds Warning About Yahoo

28 April 2008

REDMOND, Washington: Microsoft's net income fell by 11% in the last quarter, with its online division making a loss of $228 million (€146m; £115m).

It lends credo to cfo Chris Liddell's claim that "speed is of the essence" in its efforts to purchase Yahoo, a process which he admits has, thus far, "been anything but speedy".

The company's client division saw revenue drop 24% year on year to $4.03 billion, with operating income down 26% to $3.1bn. The business division also saw a decline of 2% in revenue to $4.75bn and an 8% fall in operating income to $3.13bn.

Revenue in the software titan's online service arm rose 40% to $843m, partly due to its purchase of aQuantive. However, the $228m overall loss was still an increase on the $171 million reverse recorded during the same period last year.

Speaking about Microsoft's $42bn bid for the ailing Yahoo, Liddell said his company was prepared to put its "offer to . . .  shareholders" or "withdraw our offer" – and that it was committed to improving its online advertising offering "with or without Yahoo".

With regard to the possible consequences of the US economic downturn on Microsoft, he added: "It will impact us overall, but it hasn't been significant in the last three quarters."

Data sourced from; additional content by WARC staff