Microsoft Online Services Division Sees Loss from Stronger Dollar, Weaker Online Ads

On a day when the stock market rose above 9,000 and everyone but the short sellers were in good spirits, Microsoft provided reason for pause. Their quarterly earnings were painful. Recently, Google and even Yahoo! earnings plus non-search and non-tech earnings seemed to show that perhaps the we’ve-seen-the-bottom pundits just might be right after all.

  • Quarterly revenues declined 17% to $13.10 billion.
  • Quarterly net income declined 29% to $3.05 billion
  • Diluted earnings per share declined 26% to $0.34

Digging into the Online Services division, quarterly revenue declined 13% to $731 million. Online ad revenue decreased 14% to $529 million, primarily reflecting a decrease in display advertising. However, currency issues contributed to $28 million of the loss.

The dollar has become stronger, which affects global sales. Microsoft says foreign currency exchange rates accounted for an overall $219 million or one percentage point decrease in revenue.

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