Microsoft makes $4,000,000,000 in quarterly net profit

The Washington Post puts it succinctly:

At least the Xbox division (which includes the Zune and other entertainment products and devices) is no longer losing money, reporting $165 million in operating income on revenues of $1.7 billion. The online division cannot claim the same. Revenues were up 12 percent to $566 million, but It lost $713 million in operating income. That is about $300 million more than it was losing last year. That is okay, though, the $3 billion in operating income for the Windows division is up by $788 million from last year

MSFT sales down 6%, profits down 32%, year-on-year

David Goldman, at CNN Money, puts it this way:

The company has had a difficult time combating slumping demand for its Windows operating system, as the economic slowdown has dragged PC sales down 7% to 9%, according to Microsoft’s estimates. The recession has also prompted many consumers to opt for cheaper, scaled-down “netbooks” that perform only basic tasks like e-mail and accessing the Internet. They typically run open-source operating systems like Linux, rather than Windows.

Sorry, but that isn’t true. Most netbooks run Windows XP. Preston Gralla (hi, Pres!), writing on  his ComputerWorld blog says, “A study by the analyst firm NPD Group has found that more than 90% of netbooks sold in November, December, and January shipped with Windows on them. Just as important is that only in December did netbook sales truly take off.”

Preston’s observation certainly matches what I’ve seen – although I’ve been very impressed by Linux on my Asus Eee 1000H.

“The trouble for Microsoft is that its cash cow is shifting,” said Carl Howe, analyst with Yankee Group. “PC sales are troubled, and they’re getting hurt by the move to cheaper notebooks.”

It’s gonna be interesting to see how Windows 7 turns all this around. Er, if Windows 7 turns all of this around. Maybe I’ve swallowed the Kool-Aid, but based on three months of continuous thumping on Windows 7, I’m convinced that it’s the best operating system to come out of Microsoft. Period.