Microsoft records first loss for 26 years

20^th July 2012

Poorna Rodrigo

Poorna Rodrigo

20 July 2012

The software giant Microsoft has suffered its first quarterly loss in 26 years owing to a weak online ad business.

The loss was recorded after an accounting adjustment due to the revaluing of one of Microsoft’s assets. The loss of $492-million in the April to June quarter is the result of a $6.2billion (£3.9billion) charge to its online ad service, Aquantive, bought in 2007—a digital advertising firm aimed at helping the company to compete against rivals like Google.

However, the firm failed to meet management expectations of profits and Microsoft reported its first quarterly loss since its initial public flotation on the stock market in March 1986.

But despite the loss, profits in fact exceeded those expected by investors and shares increased by 1.6% after the results were announced. Chief Executive Steve Ballmer even made an optimistic statement in reference to the October launch of Windows 8 and its own tablet, the Surface, which is seen to be the most important product redesign in over 10 years.

“We’re fast approaching the most exciting launch season in Microsoft history,” Ballmer was quoted as saying.

Analysts say the launch will be the biggest shake-up at Microsoft in a decade and will turn the company’s fortunes up once again.

Poorna Rodrigo