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TECHNOLOGY A23
Friday 23 October 2015
Microsoft’s new businesses shine, but PC software still sags
BRANDON BAILEY Thursday’s results were the
AP TECHNOLOGY WRITER
SAN FRANCISCO (AP) — Mi- first to reflect Microsoft’s
crosoft may still be suffering
from lagging sales of per- recent reshuffling of prod-
sonal computers, but the
tech giant has taken some uct lines into new reporting
cues from rivals like Apple
and Google — and it’s now segments. Windows rev-
seeing substantial growth
in more promising lines of enue is now lumped in the
business ranging from Inter-
net apps and advertising same category with online
to online games and cloud
computing. advertising, Xbox gaming
In the company’s latest
earnings report, issued and its remaining phone
Thursday, key segments of
Microsoft’s business contin- business.
ued to decline in the quar-
ter ended September. Li- The somewhat cosmetic
censing payments from PC-
makers were down 6 per- move “shows the shrinking
cent, a fifth straight quarter
of declines, after the July importance of Windows as
launch of Microsoft’s Win-
dows 10 operating system a stand-alone product,”
failed to spark an immedi-
ate revival in sales. said Bernstein Research an-
In addition, Microsoft’s de-
cision last summer to pare alyst Mark Moerdler.
back its struggling Nokia di-
vision meant the company Two other categories con-
made less money from sell-
ing mobile phones. But Mi- solidate Microsoft’s other
crosoft reported strong per-
formance in cloud com- major revenue sources.
puting, online advertising
and subscriptions to online One is business software,
services — areas CEO Sa-
tya Nadella considers key including the popular “Of-
to the company’s future.
All told, the company said fice” programs. The other
it had $20.4 billion in reve-
nue for the quarter ending combines data center soft-
Sept. 30, down 12 percent
from a year earlier. Net In this Oct. 6, 2015, file photo, Microsoft CEO Satya Nadella closes a presentation of new devices ware with cloud services, in
income rose 1.7 percent
to $4.6 billion. The results in New York. Microsoft reports quarterly financial results Thursday, Oct. 22, 2015. which companies use soft-
drove Microsoft shares up
more than 6 percent in late Associated Press ware housed on Microsoft’s
trading after the earnings
announcement. The stock sale. But Thursday’s report pay for ongoing subscrip- many are new PCs and servers.
closed earlier at $48.03, up showed Nadella’s increas- tions to its Xbox Live gam- how many are older ma- The latter is Microsoft’s fast-
1.76 percent for the day. ing emphasis on other seg- ing network and Office 365 chines whose owners took est growing segment, and
PC makers like Hewlett- ments that promise more “productivity” software. advantage of the free up- one where analysts say
Packard and Lenovo are potential for growth. Analysts say Nadella’s goal grade. Analysts say that Microsoft is outshining ri-
still hoping Windows 10 “I think he is realistic about is to build a broad ecosys- suggests a healthy interest vals like IBM and Hewlett
will boost PC sales this the role of Windows,” said tem of interrelated prod- in the new software, al- Packard. Yesterday, in
fall, when they’ll be offer- Gartner tech analyst David ucts, offering some for though International Data fact, HP announced it will
ing more new models for Smith. Instead of counting free — including Microsoft Corp. estimates overall PC shut down its public cloud-
heavily on Windows licens- apps for Apple and An- sales still dropped 11 per- computing service, a tacit
ing fees, Smith said, Nadel- droid devices — while mak- cent in the third quarter. admission of defeat.q
la “is much more focused ing money from others. By
on cloud computing and getting Windows 10 onto Yahoo to team up with Google
other services. That’s where more computers, he’s also in Internet search, advertising
the future of the company hoping to persuade inde-
will be.” pendent app-makers that
Rather than charge indi- there’s an audience for SAN FRANCISCO (AP) — Yahoo is leaning on Google’s
vidual PC owners to up- apps that work with Win- expertise in Internet search and advertising in its latest
grade their older versions dows on PCs, phones, tab- attempt to boost its revenue.
of Windows, for example, lets and gaming consoles. The proposed three-year partnership was announced
Microsoft has been offering That in turn could give con- Tuesday after Yahoo released its third-quarter results.
free upgrades to Windows sumers more reason to use The numbers represented the latest in a long succes-
10 — much the way Apple those devices. sion of disappointing performances for Yahoo, with
and Google provide free To some extent, that’s the company’s net revenue slipping 8 percent from
updates to their operating again similar to strategies the previous year.
systems for Macs, iPhones that have worked for Apple Yahoo Inc. tried to team up with Google in search
and Android devices. and Google, which offer a during 2008 as part of its defense against a takeover
Microsoft hopes to make variety of online services attempt by Microsoft. The Google alliance unraveled
up the revenue from oth- and mobile apps to keep after the U.S. Justice Department threatened to block
er sources, such as on- people using their prod- the partnership on the grounds that it would thwart
line advertising tied to its ucts. competition. The new deal still must be approved
Bing search engine and Windows 10 is now running by antitrust regulators. Yahoo will still rely on technol-
new Edge browser, which on 110 million devices, ac- ogy from Microsoft’s Bing search engine as part of a
comes with Windows 10. It’s cording to Microsoft, al- 6-year-old partnership.q
also prodding consumers to though it hasn’t said how
