Breaking News: Microsoft faces first ever public loss of £313 million

Written on:July 20, 2012
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Microsoft

Software giant Microsoft faces first ever loss (Image Courtesy: James M Phelps)

For the first time ever since it joined the stock market in 1986, US computer giant Microsoft has posted a loss of £313 million in the fourth quarter as compared to profit of £3.75 billion last year, following a writedown of its online advertising business Aquantive by £3.94 billion.

Microsoft had acquired Aquantive for £4 billion in cash to compete with Google in the race to increase its revenues through search-related advertising. Aquantive could not stand up to Google and this resulted in Microsoft reducing the value of Aquantive.

The computer giant reported other areas remain unaffected despite the decline in popularity of its Windows operating system, which was clearly seen in its revenue for the three months to June which rose by 4% to £11.5 billion. Microsoft said excluding the adjustment for the asset write-down, and the reservation of some income related to the launch of its Windows 8 system, Microsoft profits beat those expected by investors.

The software company says the update of the Windows systems is the most important redesign in more than 10 years. Windows 8, which will launch in October, will feature a new look that will present applications in a mosaic of tiles. Windows 8 will also enable the operating system to work on tablet computers. The company is also planning to launch its own tablet the Surface.

Earlier this week, Microsoft previewed its next version of the Office system, which is expected to be released next year. The shares of the company rose by 1.6% after the results were announced.

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