Later this morning, I will scramble the private ATD jet to make my way down south to Anaheim for Microsoft’s annual Financial Analyst Meeting.

That’s right: A bunch of Wall Street types, asking not very challenging questions of top Microsoft execs in a ballroom perilously close to Disneyland.

Taking place this afternoon, starting at 1 pm PT, the confab will include appearances by its top execs, including CEO Steve Ballmer, CFO Peter Klein, COO Kevin Turner, Online Services President Qi Lu and Satya Nadella, who helms the Servers & Tools division of the software giant.

There will be lots to discuss at the confab, including: What is up with Microsoft’s search and advertising partnership now that Yahoo CEO Carol Bartz — who struck the deal — was ousted, and whether it is involved in a possible bid for the Silicon Valley Internet giant again; an update on the Windows Phone business; prospects for Windows 8, which the company just highlighted at its huge developers conference there; questions about its nascent tablet business; comments on Google’s recent moves, including its purchase of Motorola Mobility; and, of course, how Ballmer sees his own tenure at Microsoft, given its longtime lackluster stock performance (paging investor David Einhorn!).

In other words: Mr. Ballmer’s Wild Wall Street Ride!

Look for my live blog from the event later today.

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Microsoft had a solid fourth quarter, which is why the conference call with Wall Street analysts should be relatively short and sweet.

Or sweet, at least.

Microsoft reported beat expectations on profits that rose 30 percent, as well as on revenue. Of particular note were its Office, Entertainment and Devices and Servers and Tools units. Even the revenue at its perpetually money-sucking Online Services division was up 17 percent.

(You can see Microsoft’s charts and other data here, if you really want more.)

Here’s a liveblog of the call:

2:31 pm PT: Well, Microsoft investor relations dude-in-chief Bill Koefoed sounds unusually jaunty in his greeting.

And why not? The results are good for Microsoft, even a little giddy, with a lot of impressive numbers and solid launches of several products, from Xbox Kinect to Office 365 to Bing, the very pricey but pretty search service.

Next up is CFO Peter Klein, who also sounds like this particular call is a relief.

He talks about the results a bit, most of which are up.

“In summary, we are pleased,” says Klein about the quarter and the year. He also notes that he is “excited.”

It’s party time in Redmond!

2:38 pm: Peppy Bill is back, going through the numbers. Solid!

Klein then moves onto the future and he remains “excited.”

Now, it is onto Q&A from the analysts.

This is where I zone out a little and start to wonder if a doughnut is a wise choice for an afternoon tasty treat.

That would make me “excited.”

Lots of congrats, which only makes me hungrier. One analyst asks why it was so much stronger than expected.

Klein: The economy has improved, businesses are expanding, peeps love them some cloud.

There is a question about how the troubled Yahoo search partnership is going. Klein promises some improvement by the end of the year.

Still, bummer!

But it is quickly back to happy, with a question about the strength of Xbox and its subscribers.

“It’s fantastic,” says Klein.

Like I said, sweeeeeeet.

The Wall Street Journal reported earlier tonight that Microsoft–in what would be its most aggressive acquisition in the digital space–was zeroing in on buying Skype for $8.5 billion all in with an assumption of the Luxembourg-based company’s debt.

Sources told BoomTown tonight that the deal for the online telephony and video communications giant is actually done and will be announced early tomorrow morning.

The purchase–which has been spearheaded in closely held negotiations by Microsoft CEO Steve Ballmer, with an assist from Business Division CFO Amy Hood and top dealmaker Charles Songhurst–is a bold move for the software giant and its biggest acquisition in more than three decades.

The big price will give Microsoft–which has struggled in its online efforts and has lost billions of dollars for its work–a big brand name on the Web.

With Skype, which has been aggressively expanding, Microsoft will continue to lose money in its Internet efforts. Skype lost $7 million on revenue of $860 million. Operating profits, which Skype preferred to highlight, were $264 million.

And–let us not forget–Skype’s debt is $686 million. Silver lining: That’s slightly less than Microsoft’s Online Services division losses in its most recent quarter!

But, sources said, the concept is bigger than just money, including getting access to Skype’s 663 million registered users.

Skype, which had been headed bumpily toward an IPO until now, will apparently be integrated into Microsoft’s Windows Live and other online communications efforts in both the consumer and enterprise arenas, sources said.

Think Kinect connecting.

Skype has had a big-company owner before–eBay Inc. paid $2.6 billion in cash and stock for it in 2005, as a way for the auction site’s buyers and sellers to communicate.

A 70 percent stake in Skype was sold in 2009 to investors such as Silver Lake Partners, Andreessen Horowitz, and the Canada Pension Plan Investment Board. It then valued Skype at $2.75 billion.

So, obviously, the deal is a big win for them. In addition, at the time they made their investments, Skype was a huge legal mess with lawsuits flying.

Skype has since gotten cleaned up enough to attract Microsoft.

Other suitors have looked at Skype, including Google, although acquisition interest by Facebook was very much overblown, said several sources.

Interestingly, Microsoft’s new smartphone partner Nokia also held meetings with Skype’s CEO Tony Bates, a former Cisco exec who arrived at the company last fall.

Interest in Skype by Microsoft was first reported by GigaOm’s Om Malik on Sunday.

Tune in at 5 am PT for the official press release, apparently, and lots and lots and lots of analysis of whether Microsoft paid too much for Skype.

You’d think there would be a party in Redmond, Wash., today, as software giant Microsoft soundly beat Wall Street expectations in its third-quarter earnings released earlier today.

Microsoft said it had revenue of $16.43 billion for the quarter ended March 31, 2011, which was up 13 percent from a year ago. Net income was $5.23 billion, or 61 cents per share, a rise of 31 percent and 36 percent, respectively.

The surge was led by sales of Office, Kinect and Xbox and a stronger economy.

But there are shadows, too, as results were dragged down by weaker revenues for its flagship Windows unit.

The report comes as Microsoft’s stock continues to lag, declining 14 percent for the year.

Buzz kill!

BoomTown livedblogged the call for Wall Street analysts:

2:30 pm PT: Peter Klein, Microsoft’s CFO, who sounds super peppy, outlined the strong quarter, especially for its Office products.

He also mentioned some glitches, such as Microsoft’s still-struggling efforts to increase revenue per search (RPS) in its longtime search and online advertising partnership with Yahoo and the slower growth of the PC sector upon which the software giant’s Windows relies.

PC should stand for “possibly crappy,” but good-boy Klein did not say so.

Investor relations dude Bill Koefoed also read through the news, sounding at times like a sports announcer on a cable television network.

“Quuuuaaadrupled…,” he intoned about one part of Microsoft’s business.

This all went on for a while, since Microsoft has a lot of divisions. Servers & Tools. Online Services. Entertainment and Devices. Fashion & Cute Tops.

Okay, not that one, but a girl can dream.

It was all fun and games until Koefoed got to the Yahoo problem, which Yahoo CEO Carol Bartz had used as a cudgel in her earnings report recently.

Yes, it is a bummer. But soon it was back to the happy land of Xbox!

Klein said he was pleased with the results in a jaunty manner, which made me desperately wish Microsoft CEO Steve Ballmer led the call.

Because he’s always one obnoxious query away from a volcanic popping off.

Which is why I love those Yahoo calls and Bartz.

Buzz kill!

2:54 pm PT: That was fast–the call was quickly into questions.

The first is about COGS–cost of goods sold–and how it impacts gross margins.

Klein said the expenses were volume driven. I’d explain, but then I would fall asleep.

The next question was about stock buybacks.

That might get the stock up. Yeah, said Klein, they’ll keep doing that–not that it has helped much on the share price front.

More and more questions, about the PC market, the issues at Yahoo (let’s get that RPS up!), the Windows Phone 7 business.

I’ll be honest, I was a bit bored and started reading a riveting Business Insider interview with TechCrunch’s Michael Arrington on his myriad conflicts of interest related to his tech investing while also blogging as a news guy.

Whatever you think about him, that dude is good copy.

Wait, back to growth rates for Office!

It’s going great, said Klein (hey, maybe Arrington will invest!).

The call wraps up on news of an upcoming investor conference, being held near Disney World.

Oooh, party time!

BoomTown took the corporate All Things Digital jet–aka Virgin America, seat 10A–up to Redmond, Wash., today to attend Microsoft’s annual Financial Analyst Meeting, which also includes a passel of media drones like me.

I will be liveblogging the event all day, which is essentially a cavalcade of top execs from the software giant taking the stage and showing off their wares.

There should be a little bit of swanning, since Microsoft (MSFT) turned in very good financial results last week, posting a huge increase in earnings and revenue due to the uptick in PC sales and the intro of the Windows 7 operating system. Losses at its Online Services division remained high, so thank goodness for servers and tools!

Here we go:

8:15 am PT: I was late due to the completely confusing streets of suburban Redmond, all of which look exactly alike, as does every building on Microsoft’s sprawling campus. I am a streets of San Francisco girl, obvi.

In the Conference Center, though, things had not started well past the 8 am start time, as we await the entry of investor dude Bill Koefoed.

U2′s “Beautiful Day” was playing over the sound system, which it was not up here in the Pacific Northwest this morning–it was kind of cold and gloomy, a la “Twilight”–but hopefully will be for sparkly Microsoft execs. We’ll see!

Finally, Koefoed came out and started in on feedback, touting the newly renovated investor relations site, which he is “pretty proud of.” It is nice looking, as are most of Microsoft’s hand-out materials.

In fact, he sent me an excited note last week, because I posted Microsoft’s pretty fourth-quarter slides.

Dear Bill: You need much better things to get excited about! Like the new Magic Trackpad from Apple (AAPL)! Wait, I mean Windows Phone 7!

Koefoed moved quickly to point out last week’s strong results, which is no surprise. When you’ve got lemonade, make more lemonade!

Then he outlined the various Microsoft’s eight “core” businesses, such as Xbox, Bing, Microsoft Office, Windows Azure and, of course, Windows, that the company will be going over.

That’s a lot of core, isn’t it?

Some questions to be answered: Business PC refresh and share momentum? Impact of iPad/slates? Windows 7 phone? Expense control?

Beautiful or not, it was going to be a looooong day.

8:42 am: A jaunty Kevin Turner, Microsoft’s COO, bounded out. He tried to get the crowd more lively, but this was not to be unless there was a lot more coffee.

I had great hopes for a goofy quote this morning from Turner, who declared at the Microsoft Worldwide Partner Conference earlier this month about Apple’s antenna controversy: “It looks like the iPhone 4 might be their Vista, and I’m okay with that.”

I don’t know about you, but insulting a competitor by shooting off your own foot is a gift that keeps on giving to me.

In any case, Turner said Microsoft was now “leading with the cloud,” a move that the company had been resisting in the past. Now: All in!

He outlined all the various services for business customers. “We are the market leader in cloud services for business,” said Turner, noting Microsoft had been too quiet about the inevitable move of data and software services to big services in the digital sky.

(Actually, in its secret heart, Microsoft was hoping this whole Internet thing would go away and it would be back to a PC on every desktop, but that horse has left the barn, so it’s cloud time!)

Next up for Turner: The much deserved popularity of Windows 7. Of course, since Vista was Microsoft’s Antennagate–except much, much, much worse–it was not hard to be better.

Turner then moved on to bashing Google (GOOG) and other competitors. Turner put up some quotes from Jaguar employees, after the car company switched to Google for email and other services.

One said Google was like vinyl seats. Ziiiiing!

Next Turner victim: VMware (VMW)! He claimed its products were pricier and not cloudy enough.

As for Linux: Meh!

Oracle (ORCL): Customers don’t want to be locked into the land of Larry Ellison!

Cisco (CSCO): Just you wait, John Chambers!

9:19 am: Turner headed off and Chief Research and Strategy Officer Craig Mundie started in on his speech, titled “Reimagining Microsoft’s Future.”

That would be the client plus the cloud, natural user interface and something he called “working on your behalf.”

Mundie launched into his future-dude schtick, but he’s not exactly Alvin Toffler, so I started desperately mainlining the caffeine.

He talked about movable data centers, the “Internet of Things” and other cloud innovations, but there is no new idea here to blow your mind.

Is it too much to wish Mundie would talk about an invisibility cloak? Instead, it was the orchestration of data authority.

That will apparently be a new data marketplace product, codenamed Dallas, to shop for giant data sets and more.

Mundie than showed off some personalization-driven features in the Bing search service, which are also not new concepts.

For example, he showed a menu, embedded in a table, that might know what you like to eat at a particular restaurant you frequent.

This is what would be on my table and there is no need of a fancy computer table to know this: Donuts, donuts, donuts.

Speaking of which, FAM minions: Where the heck were my donuts?

Mundie then moved onto Kinect, once called Project Natal, the actually cool gesture interface for gaming that will be available for Xbox soon.

Finally, he finished up with a video clip of a medical triage assistant. Great, even less customer service from hospitals. The demo was flatly freaky.

The morning session wrapped up with a visit to the technology showcase to “expect the unexpected,” although I was not expecting that in any way, and then it was off to lunch.

Next up in the afternoon session: CEO Steve Ballmer at 1 pm PT.

As it turned out, Microsoft (MSFT) blew past even the sunniest Wall Street expectations in its fourth-quarter earnings.

Spurred by a robust PC upgrade cycle, net income rose to $4.5 billion, or 51 cents a share, from $3 billion, and revenue to $16.04 billion from $13.1 billion. Analysts had been expecting earnings of 46 cents a share on $15.2 billion in revenue.

(Even losses from the Online Services Division were lower than the previous quarter, dropping from $731 million to $696 million–although this quarter’s losses were more than the same quarter a year ago, which were $585 million.)

BoomTown was on a plane jetting to Aspen for the Fortune Brainstorm Tech conference, so I missed liveblogging the management call this afternoon (sorry, Frank!). Here are the software giant’s slides of the financial results to peruse at your leisure:

Microsoft Q4-FY10 Slides

Wall Street had high hopes for Microsoft’s latest financials, and the company did not disappoint. Fueled by a strong PC upgrade cycle, it turned in a record fourth quarter with sharp gains in both profit and sales.

Net income rose to $4.5 billion, or 51 cents a share, from $3 billion, and revenue to $16.04 billion from $13.1 billion. Analysts had been expecting earnings of 46 cents a share on $15.2 billion in revenue.

“We saw strong sales execution across all of our businesses,” Microsoft (MSFT) COO Kevin Turner said in a statement.

And indeed it did. Windows revenue rose to $4.5 billion from $3.2 billion in the same period last year. Profit for the company’s Windows division rose to $3 billion from $1.9 billion.

At Microsoft’s Business division, which includes its Office suite of software, revenue rose to $5.3 billion from $4.6 billion, and profits to $3.3 billion from $2.7 billion.

And the company’s Online Services division saw its revenue rise to $565 million from $501 million, though its loss grew as well–from $585 million to $696 million.

Below, the earnings release:

Microsoft Q4

BoomTown always likes to play the quarterly game of guessing exactly how eye-popping the loss in the Online Services division of Microsoft will be.

In the third quarter, for example, it was $713,000,000–yes, all those zeros!

But that will be just a rounding error to Microsoft (MSFT) in the fourth quarter if the software giant can meet Wall Street expectations of strong gains in profits and revenue, due to improving computer demand.

Analysts expect Microsoft to earn 46 cents a share for the three months ended in June, with $15.2 billion in revenue. In the same quarter a year ago, the company posted profits of 36 cents a share on $13.1 billion in revenue.

What a difference a year makes, especially with PCs selling well and Microsoft offering the popular new operating system Windows 7.

Intel (INTC), a Microsoft partner, already showed a lot of leg with strong results last week.

But despite the upturn, Microsoft still is unlikely to show such strength in its online businesses, as well as others such as online games and mobile phones. That’s because the company has had to make massive investments to compete with rivals such as Google (GOOG).

Microsoft, of course, is hoping that its online search and advertising partnership with Yahoo (YHOO), which is expected to launch by year’s end, will move the market share–and, thus, profit–needle.

If that happens, there is only one thing to do: Par-tay in Redmond!

Oh dear, here it comes round again, like a bout of the flu–the indefatigable narrative about how Microsoft is headed downhill at an alarming speed, how CEO Steve Ballmer is about to get the boot and how it is all really, really true since the echo chamber of tech keeps repeating it.

Over the past two weeks, for example, I have gotten numerous “tips” that all these things are about to happen. Except when I go to check them out by doing some actual reporting, they turn out to be more chatter than reality, more barstool musing than concrete, and without much in the way of those pesky facts.

Today, we get yet another from the Olympic champion of traffic-goosing headlines on blogs, Henry Blodget of Silicon Alley Insider, in what is quite a humdinger of a title: “The Odds Are Increasing That Microsoft’s Business Will Collapse.”

Holy Guacamole! Really?

You mean the Microsoft that still–despite all the Google Apps machinations–has a hammerlock on the enterprise software market? The company with a badillion dollars in cash in the bank? The one that can lose more than $700 million in its Online Services division and not blink an eye?

Actually, the headline is the most exciting part of the whole article that follows, which hedges mightily as it also dredges up old news about Microsoft’s business challenges.

The short version: The Internet is everything that’s not good for Microsoft; Apple (AAPL) is rocking the mobile market; Google (GOOG) is disrupting all over the place; and, natch, the oncoming cloud-computing incursion is worse than the Smoke Monster from “Lost” for Microsoft’s cash-generating Windows and Office businesses.

All true in a very broad-brush way. But, of course, Blodget pulls a complete on-one-hand-on-the-other at the end, although he cannot resist a final over-the-top statement:

Right now, the investors are concluding that Microsoft will gradually become the equivalent of a technology utility–a boring but necessary provider of the software that runs the world’s business community. A smaller, more optimistic crowd is still arguing that, one day, Microsoft will be able to turn its fortunes around, and fight its way back into an industry leadership position.

What almost no one is talking about is a third possibility, one that becomes more likely by the day: The possibility that, a couple of years down the road, Microsoft’s business may just completely collapse.

Here’s the simple and less flashy situation:

Microsoft, as all tech companies do, needs to change, and a lot faster than it has so far; the company has been trying mightily to do so in search and recently, in mobile, where it is woefully far behind; its leadership under Ballmer, who took over from co-founder Bill Gates, has been meh enough to keep its stock moribund.

But, by no means recently–even if there is a better CEO for Microsoft out there than Ballmer–have I found the company execs ignorant about the tougher issues or unwilling to consider changes needed.

In fact, in its high-flying days, Microsoft did have a tin ear to criticism. No longer, and I would call its execs appropriately concerned about fixing its issues, although their efforts do suffer from the company’s massive size and inertia in making the right moves.

Thus, they certainly might not be successful at innovating, although these are the very kinds of problems Apple CEO Steve Jobs solved when he returned to a rotten company in what, in its current glory days, seems eons ago.

And Microsoft has been getting the same questions that are beginning to be asked about Google.

But can you imagine anyone not mocking a likely headline-to-come about the search giant: “Search: If That’s All There Is, My Friend, Then Let’s Keep Surfing (to Oblivion!)”?

That’s why–at this point–I can see no need for panic to set in about Microsoft. Next year, perhaps. Five years, with no change and not listening to the obvious, definitely.

As for today, even though we are all terminal, the sky looks like it will remain intact at Microsoft for a little bit longer.

According to sources close to the situation, AOL has hired Alex Gounares (pictured here) as its CTO.

Gounares’s departure was announced internally at Microsoft (MSFT) today, where he is corporate VP of Advertising Research and Development and CTO for the software giant’s Online Services division.

According to his bio at Microsoft, Gounares had previously been “corporate vice president for Corporate Strategy, where he was responsible for helping set the overall strategic direction for the company. Before that, Gounares spent three years as the technology assistant to Microsoft Chairman Bill Gates, and he also was responsible for helping formulate and drive the technical strategy for the company.”

Sources said he will be moving back east to take on the job at AOL (AOL). He will replace Ted Cahall, who left AOL in late January.

Yes, there could be some kind of deal between Microsoft (MSFT) and some publishers. And yes, that might involve some kind of payment. But the company is signaling, loud and clear, that it’s not going to pay the huge sums necessary to fund a real Google (GOOG) boycott.

That’s what All Things Digital reported last week. And that’s what the Associated Press echoed in a subsequent story this week. And that’s what Microsoft said today, more or less. Except this time it was on the record.

Here’s Satya Nadella, who heads up R&D for Microsoft’s Online Services Division–i.e., Bing–at a San Francisco press conference, per Kara Swisher’s account:

Then comes a question about premium, or “non-Google,” content. Nadella avoids the question, and instead focuses on “scaffolding” the data.

“We’re not as focused on getting exclusive content,” he says flatly. Uh-oh, publishers! As I reported, Microsoft is not forking over the dough.

…Nadella gets another question about paying to de-index Google.

“There is no real intent here that is focused on getting a whole bunch of content that is de-indexed from Google,” he said.

Nadella went on to say that Microsoft is happy to feature different kinds of content, as a way of differentiating itself from Google. Like the work it already does with the Mayo Clinic on health searches: Plug in “swine flu” and you’ll see information from the clinic prominently featured, via a licensing deal.

But that’s a far cry from handing over a sack of cash in exchange for abandoning Google altogether.

Obligatory “to be sure” graf: Say Microsoft was interested in handing over sacks of cash to publishers like News Corp. (NWS), which owns The Wall Street Journal (as well as this site). You wouldn’t hear Redmond bellowing that out loud, anyway.

That’s certainly what the News Corp. folks hope. Or alternately, they’re hoping that all this talk of a Microsoft-publisher alliance spooks Google. But, as the tough guys like to say, hope is not a plan.

Between November 2008 and March 2009, Redmond hired away five Yahoo veterans. First, Sean Suchter, VP of search technology at Yahoo, left to become general manager of Microsoft’s Silicon Valley Search Technology Center. Then Yahoo search scientist Qi Lu followed him after being tapped as president of Microsoft’s Online Services Group. Soon after that, Larry Heck, former VP of search & advertising sciences at Yahoo Labs, accepted a job in the R&D department of the software giant’s online services division. Jan Pedersen, who once served as a chief scientist and VP of Yahoo’s Search and Advertising Technology Group and Dayne Sampson, Yahoo’s VP of operations for search and advertising, followed.

Now comes word that three more Yahoo execs have taken jobs at Microsoft (MSFT). Knut Risvik, Yongdong Wang and Kevin Timmons, all Yahoo veterans, are now headed to Microsoft.

Risvik, once a chief architect at Yahoo (YHOO), will work on Microsoft’s search platform and infrastructure. Timmons, formerly a Yahoo VP of operations, has been charged with running the company’s data center expansion. What Yongdong Wang, once a VP of international search, will do remains to be seen. He is, however, reporting to Harry Shum, Microsoft’s corporate vice president for search product development, so presumably he’ll be doing something similar.

A nice little trifecta for Microsoft and one that surely inspired Yahoo CEO Carol Bartz to drop a frustrated F-bomb or three. As I said back in March: If Yahoo employee defections to Microsoft continue apace, there may come a day when Redmond will no longer need to buy the struggling company’s search business. It will already have acquired it.

The FCC’s 67-page order (PDF) all but calls Comcast a liar, accusing it of using “verbal gymnastics” to justify its network-management practices, and “unpersuasive” ones, to boot. As expected, the FCC gives Comcast 30 days to explain those practices in detail and how the company plans to change them by year’s end.

And just how does Comcast plan to do that? By slowing Internet service for heavy users for 10 to 20 minutes, regardless of the programs they use, with a new system called “Fair Share.”

So instead of throttling applications, Comcast (CMCSA) will throttle subscribers.

“If, in fact, a person is generating enough packets that they’re the ones creating that situation, we will manage that consumer for the overall good of all of our consumers,” Mitch Bowling, Comcast’s senior vice president and general manager of online services, told Bloomberg. User-throttling would last for “roughly between, probably, 10 and 20 minutes,” Bowling said. After that, the heavy user’s speeds would return to normal–until the next transgression. Said Bowling, “If they continue that, we would have to manage them again.”

Ten years later, he penned another memo–titled simply “Internet Software Services“–in which he warned of a “services wave of applications and experiences available instantly over the internet” that would reshape the traditional software business. “This coming ‘services wave’ will be very disruptive,” Gates wrote.

And lucrative for those who were quick enough catch it. Salesforce.com (CRM), for example. Google (GOOG) and Amazon (AMZN), as well. Not Microsoft, though. Fearful of undercutting its fantastically lucrative packaged-software business, the company has been slow to enter the “software-as-a-service,” or cloud computing, market. Methodical, but still slow.

Now, with Google’s business-level hosted applications (Google Apps) gaining traction, Microsoft is moving a bit more quickly. The company dropped the 5,000 worker minimum on its Microsoft Online Services offering today, expanding the availability of Exchange Online, SharePoint Online, and Office Communications Server Online to businesses of all sizes. Especially, the smaller ones for whom Google Apps had previously been the only option …