No Wonder Microsoft Wants Yahoo: MSFT's Losing Online

Microsoft (MSFT) capped its fiscal year with $60.4 billion in revenue and net income of $17.7 billion, but the fourth quarter left a sour taste for some. And Microsoft’s online business lost more money in the fourth quarter than it did a year ago.

The company reported fourth quarter earnings of 46 cents a share on revenue of $15.84 billion (statement). Wall Street was looking for earnings of 47 cents a share.

Shares were down roughly 4 percent after hours.

As for the outlook, Microsoft projected first quarter revenue between $14.7 billion to $14.9 billion with earnings between 47 cents a share and 48 cents a share. Wall Street was expecting 49 cents a share.

For fiscal 2009, Microsoft projected revenue of $67.3 billion to $68.1 billion and earnings of $2.12 a share to $2.18. Wall Street was expecting earnings of $2.16 a share.

As is the norm,  Windows and Office carried the day for the client and business division respectively. However, Microsoft’s online services business lost more money than a year ago.

Is it any wonder why Microsoft is so hot for Yahoo? Something has to save this online unit.

Here’s a look at Microsoft’s results by unit:

Comments

[User 227895]

Why does Microsoft insist on being something they are not! They are a software company and should have acquired SAP(or any number of software companies) years ago. Their forays into game boxes, tablets, MP3 players, etc simply show their lack of strong management, a completely out of focus business strategy and a out of control R&D budget. If they acquire Yahoo, Microsoft and their Board will have on their resume "worst acquisition in the history of the technology industry!" They will(and already have) earned reputation of squandering the greatest wealth in the history of a U.S. company. A couple of MBA students from business school could have done a better job on business strategy than Gates and Ballmer! Sooooo sad

[jackooo]

Worst technology merger was Time Warner and America online by far.