Microsoft Reports Strong Earnings for Q4

Episode 1406 (1:40:04)

This week a lot of companies announced their quarterly profits and losses, and Microsoft had a very good quarter. Net income in 3 months of 6.5 billion. For the first time ever, Microsoft made more money with Microsoft Office subscriptions than off the shelf copies. This has become a common practice for software now.

Office 365, the subscription version, costs between $8 and $35 per month depending on the plan that you have, and you automatically get updates for no additional cost. Adobe has this same model with the Creative Cloud for $10 a month, and the software in Creative Cloud used to cost $1,000 or more.

Microsoft used to be a software company, and they are now more of a cloud company with some software and hardware on the side. Microsoft made $23 billion in revenue. They took a $1.8 billion write-off on their Windows Phone division, which reduced their tax rate. They made so much money, that losing $1.8 billion wasn't an issue. Consumer products were up 13%, commercial products up 5%, and LinkedIn had a revenue of $1.1 billion. Revenue in intelligent cloud was $7.4 billion. Revenue of personal computing which includes Windows and their hardware was down 2%. That was mostly because of the phone. Gaming revenue, which is Xbox, was up 3%. Search advertising revenue was up 10%.