Ina Fried

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Slower Windows Sales Dent Microsoft Earnings

Microsoft saw its total quarterly earnings dip from a year earlier, as revenue was dented by a decline in Windows sales.

The software maker said it earned $6.62 billion, or 78 cents per share, on revenue of $20.89 billion for the three months ended Dec. 31. That compares to earnings of $6.63 billion, or 77 cents per share, on revenue of $19.95 billion.

The unit that includes the software maker’s flagship Windows business had revenue of $4.74 billion, a 6 percent drop from a year ago. The business division, which includes Office, posted revenue of $6.28 billion, up 3 percent from a year ago.

Microsoft’s online services division, which includes the Bing search engine, saw a narrower quarterly loss as revenue rose from a year earlier. The unit still lost $458 million, but that was less than a $559 million loss a year ago as revenue increased to $784 million from $713 million.

“We delivered solid financial results, even as we prepare for a launch year that will accelerate many of our key products and services,” CEO Steve Ballmer said in a statement. “Coming out of the Consumer Electronics Show, we’re seeing very positive reviews for our new phones and PCs, and a strong response to our new Metro style design that will unify consumer experiences across our phones, PCs, tablets, and television in 2012.”

The company’s only guidance in its press release was that it plans to trim operating expenses for the fiscal year ending in June to $28.5 billion, down from a prior forecast of $28.9 billion.

The company ended the quarter with $51.7 billion in cash and short-term investments, down $1 billion from June of last year.

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work