Microsoft Profits Down First Time in 23 Years

Microsoft yesterday reported the company’s quarterly (Q3FY09) earnings, marking the first dip in sales the Redmond company has experienced in 23 years.

According to a press release, Microsoft’s net income fell 32 percent to $2.98 billion, or 33 cents per share, in its third quarter ended March 31. Quarterly revenue stood at $13.56 billion, a 6 percent drop compared to revenues in Q3FY08.

Microsoft has said weakness in the global PC market negatively impacted its results. Experts are also putting a lot of the blame on the growing netbook market. With the economy the way it is, a significant amount of people are turning to budget laptops or netbooks for their basic computing needs. While Microsoft recently boasted that 96 percent of new netbooks run Windows, it’s not exactly the money maker it could be for the company.

A recent report suggested that Microsoft makes in or around $15 on every Windows XP netbook sold. While this still amounts to a tidy profit when you consider XP is an operating system the company is “putting to bed,” it’s no where near what the company would make if everyone went out and bought laptops that came bundled with Vista.

The launch of Windows 7 should give the company a jump start in that respect, however, we wouldn’t bank on potential netbook owners being thrilled at the idea of Windows 7 Starter. Microsoft says this version is optimized for netbooks but with the ability to run just three applications at a time, we don’t think people will appreciate Microsoft restricting the number of things they can do at once.