Microsoft suffers first sales dip

Microsoft has said sales in the first three months of 2009 fell 6% from the previous year - its first quarterly drop in 23 years as a public company.

The world's largest software maker said profit dropped by 32% to $2.98bn (£2bn). Sales slipped to $13.65bn.


Microsoft makes most of its profit selling the Windows operating system and business software such as Office.

However demand has been hit by falling sales of personal computers as consumers and businesses trim spending.

"We expect the weakness to continue through at least the next quarter," said the firm's chief financial officer, Chris Liddell.

'On track'

Microsoft - which became a public company in 1986 - has been looking at ways of cutting costs.

In January, it said it would cut up to 5,000 jobs over the next 18 months, including 1,400 immediately.

Microsoft's fall in profit was more severe than analysts had been expecting.

"There's stuff to be happy with - they're controlling costs and getting that under control," said Kim Caughey, a senior analyst with Fort Pitt Capital.

"The bad thing is demand and consumer preference seems to have affected their top line."

Shares in Microsoft rose by 4% in after-hours trading - possibly reassured by comments from the firm that it was on track to release the next version of its operating system, Windows 7, during its 2010 financial year.

Reference:

http://news.bbc.co.uk/2/hi/business/8015623.stm

Microsoft pulls plug on campus bar

With the economy in the tank, Microsoft has decided not to let its workers follow.

The software maker has confirmed it has canceled plans to have a bar as part of an expansion of its Redmond campus.

The pub, which had been planned for more than a year, was to be part of a collection of restaurants and stores that were due to open next week as part of the company's new headquarters for its Entertainment and Devices unit. Spokesman Lou Gellos confirmed the company recently decided to pull the plug.

"We had to take another look at this," Gellos said. "We are sensitive to the business environment and that meant not having a pub."

In January, Microsoft made the company's first-ever companywide layoffs and has said it is cutting as many as 5,000 jobs amid the broad economic downturn. The company has also been cutting vendors, travel, and other expenses as it looks to trim costs.

The bar was planned for "The Commons," a central area in the center of the Entertainment and Devices campus. Although the bar won't open, the area will still feature a collection of popular Pacific Northwest eateries as well as various cell phone shops, a salon, and other outlets.
The Commons is surrounded by four buildings for the entertainment unit, one of which is already occupied and another that is due to be filled in the next week or so. By mid-July, Microsoft expects all four buildings to be occupied, Gellos said.

Word that Microsoft kicked the keg came earlier on Friday from a report on Seattle-area tech site TechFlash. The owner of the proposed pub told TechFlash he was stunned by the news, which came via a letter from Microsoft. The bar, which was due to open on Monday, already had been outfitted with its beer taps, and workers had been hired.