The 22nd consecutive quarter that Microsoft has reported an overall loss in the Online Services Division (Microsoft’s Online Business For The Year: Over $2.5 Billion …Lost [July 24, 2011]):
Revenues are increasing, but the losses are increasing faster. They’re spending well over two dollars for every dollar they earn.
And then there is the biggest number of all. For the year, the Online Services Division lost $2.557 billion.
Yes, Microsoft can afford these losses thanks to their other wildly profitable businesses. But at what point do they start to reconsider their online strategy?
For their part, Microsoft mainly blames the loses on the Yahoo deal:
Don’t overlook another crazy stat: Microsoft was able to decrease general and administrative expenses by 60 percent for the year, and still lost more than ever.
Next quarter will be interesting to watch. Microsoft paid $8.5 billion in May to buy Skype — another online business with a history of losing money. It’s Microsoft’s largest acquisition ever. And the deal closed in late June, so this next quarter we should start to see how it affects the division.
The Washington Post