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Microsoft Sales Decline for First Time Ever

It's been a tough year for the economy, and Microsoft wasn't immune to the effects of the recession.

Microsoft yesterday reported its first ever annual sales drop in company history. For the fiscal year ended June 30, 2009 Microsoft reported revenue of $58.44 billion, a 3 percent decline from the prior year. Operating income, net income and diluted earnings per share for the year were $20.36 billion, $14.57 billion and $1.62, which represented declines of 9 percent, 18 percent and 13 percent respectively.

"Our business continued to be negatively impacted by weakness in the global PC and server markets," said Chris Liddell, chief financial officer at Microsoft.

In response to the changing economic climate, Microsoft has turned to layoffs for thousands of employees, which has helped the company soften the blows to the bottom line.

"In light of that environment, it was an excellent achievement to deliver over $750 million of operational savings compared to the prior year quarter," Liddell added.

The first-ever decline in sales in Microsoft history isn't surprising given that the just past third quarter saw the first-ever decline in profits.

“While economic conditions presented challenges this year, we maintained our focus on delivering customer satisfaction and providing solutions to our customers to save money,” said Kevin Turner, chief operating officer at Microsoft. “I am very excited by the wave of product and services innovations being delivered in this next fiscal year.”

The release of Windows 7 could start a wave of sales for Microsoft as both consumers and businesses figure it's time to upgrade, especially after skipping Windows Vista.

Microsoft, however, isn't so quick to pronounce Windows 7 as the savior of the industry just yet. Microsoft senior vice president Bill Veghte said last month that the new OS might not be able to turn things around single-handedly.

Marcus Yam
Marcus Yam served as Tom's Hardware News Director during 2008-2014. He entered tech media in the late 90s and fondly remembers the days when an overclocked Celeron 300A and Voodoo2 SLI comprised a gaming rig with the ultimate street cred.
  • Upendra09
    Took Tom's a while, i heard that at 12 noon Eastern time
    Reply
  • cekasone
    the picture of steve ballmer is priceless. if anyone plays WoW, he looks like he's doing a /fear emote. haha
    Reply
  • I think 7 will boost Windows sales by much the first year!
    There are many myself included waiting to get 7. I have bought vista myself, but don't use it (kind of a waste of my money).
    My laptop will always go XP, but perhaps a future desktop for gaming might go 7!
    As long as it's not Vista,I'm happy to buy.

    Does MS do some exchange? (like exchange your Vista disks for a Win7 disk (and pay a couple of bucks)).. That'd be cool!
    Then they would see how many actually want the switch!
    Reply
  • maurath55
    ProDigit80I think 7 will boost Windows sales by much the first year!There are many myself included waiting to get 7. I have bought vista myself, but don't use it (kind of a waste of my money).My laptop will always go XP, but perhaps a future desktop for gaming might go 7!As long as it's not Vista,I'm happy to buy.Does MS do some exchange? (like exchange your Vista disks for a Win7 disk (and pay a couple of bucks)).. That'd be cool!Then they would see how many actually want the switch!
    7 is based on vista, its so close to the same vista drivers work just fine. i cant stand people who are so ignorant to this fact
    Reply
  • fulle
    Oh, come on, Maurath... you're the one I'm more annoyed with.

    First of all, you quoted a complete moron, so that even after we neg his post into oblivion, if people don't think what you said was stupid enough (which it was pretty stupid) I'm stuck looking at it still. Thanks for that.

    Second, your point is bullshit. Windows XP was based on the Windows NT kernel. Many pieces of the GUI were very similar as well, and lot so the drivers built for NT worked on XP. But, XP wasn't really just an evolution from XP. Windows Me was also based on Windows NT and was supposed to be the successor to 98...

    History repeated itself. Microsoft tried to make a consumer OS from a kernel they hadn't tried that on before... made something that was incredibly unpopular, but learned from the mistakes and came out with a solid product a few years later.

    While Vista is definitely no where close to as bad as Windows Me, I still think its stupid to say that since 7 and Vista share much of the same code base that they aren't quite different products. I can't stand people who are so ignorant to this fact.
    Reply
  • fulle
    replace the line: "But, XP wasn't really just an evolution from XP" with "XP wasn't really just an evolution from NT or Windows 2000".

    Also, on second thought, I suppose its not that annoying that you flamed ProDigit with a weak argument... since, at least you flamed him. Broken english comments with "me no like vista but me like 7" make me want to slap someone.
    Reply
  • Honis
    I wouldn't be surprised if sales fell partially due to such a successful Beta and RC of 7! People on XP got there hands on and probably said, I'll wait for this!
    Reply
  • doomtomb
    Revenue dropped to a measly $58.44 billion. I'm not worried.
    Reply
  • p05esto
    I have no problems with Vista 64. I've got it tuned just the way I like it, no UAC or Aero...runs like a champ for me, I don't think it's crashed since being installed. I as well think the Vista bashers are kinda clueless.

    Frankly it's the little things in Windows 7 I don't like. The Vista task bar 3D looks sharper, I like the Classic start menu better and other details. Vista is just fine for me.

    It's all just been media hype surrounding Vista (for the most part obviously)
    Reply
  • 7amood
    picture related... XD for real...
    Reply