Microsoft reports first public loss after charge for aQuantive writedown
Microsoft reported its first ever quarterly loss as a public company as the software giant made accounting changes relating to a troubled online services business.
The loss was triggered by a previously announced $6.19bn charge for writing down the value of aQuantive, an advertising business Microsoft bought in 2007 in an attempt to catch up with Google's ad business.
The company posted a loss of $192m after the charge, its first since going public in 1986.
Shares rose in after hours trading, however, as the company announced record quarterly revenue of $18.06bn for the quarter ending June 30.
For the company's fiscal year Microsoft's revenues were a record $73.72bn.
"We delivered record fourth quarter and annual revenue, and we're fast approaching the most exciting launch season in Microsoft history," said Steve Ballmer, chief executive officer of Microsoft.
"Over the coming year, we'll release the next versions of Windows, Office, Windows Server, Windows Phone, and many other products and services that will drive our business forward and provide unprecedented opportunity to our customers and partners."
Microsoft paid $6.3bn for aQuantive, the biggest deal in its history before last year's $8.5bn acquisition of Skype.
The buy came just a month after Google paid $3.1bn for the DoubleClick advertising business, a purchase that has proved one of the search firm's smartest moves.
Microsoft's news came as Google reported a stronger than expected second quarter as profit rose 11% and revenue increased by 39% from the same period a year earlier.
Google said it earned $2.79bn profit on revenue of $9.61bn. But Google too had its issues as the price paid for its internet search advertising continued to fall, down 16% from the same quarter a year ago.
The number of paid clicks, a measure of how frequently consumers click on Google's advertisements, rose 42% from a year earlier and were up 1% from the first quarter.
In part the price fall came because Google is showing more ads on mobile devices, where ads are less valuable to advertisers.
This was the first quarterly result since Google finalised its $12.5bn purchase of Motorola Mobility in May.
The new unit brought in $1.25bn in revenue – about 10% of Google's total.
"Google standalone had a strong quarter with 21% year-on-year revenue growth," said Larry Page, CEO of Google. "This quarter is also special because Motorola is now part of the Google family, and we're excited about the potential to build great devices for users."Resources: Microsoft reports first public loss after charge for aQuantive writedown
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