Microsoft's Profits Drop 32%, Its First Sales Decline in 23 YearsS

Microsoft announced today that its quarterly revenue and earnings per share dropped in the quarter ending March 31st. It's the first time in Microsoft's history that their sales have actually fallen. Correction:

The hard data, announced during Microsoft's quarterly earnings presentation: Sales fell about 6%, net income fell 32%, and the company was forced to make its first large-scale layoffs ever, letting 1,400 people go in January and estimating 3,600 more will be lost by mid-2010.

Explanations for the drop are mostly, but not exclusively, related to the global economic pit of despair in which we're all floundering. PC sales are down around 7% to 9%, yes, but the rise in popularity of netbooks also hurts the big MS: Though the vast majority of netbooks come with Windows, it's almost always Windows XP, which is far cheaper and thus generates less income.

The public perception of Windows Vista as a disaster explosion hasn't helped matters, and with Windows 7 not likely to see release until at least late 2009, things might get worse before they get better. Microsoft predicts another loss in the current quarter, but let's make this clear: Microsoft is not in serious trouble. This is news because it's the first time in nearly a quarter-century of public trading that the tech giant has been unable to turn a profit increase their revenue. Maybe the new Zune will turn things around! Right? Correction: When this was first posted, I mistakenly classified this as net loss rather than merely a decline in profits. Thanks to the readers for pointing out the mistake, and my sincere apologies for the error. [CNN]