Microsoft Lost $2.5 Billion Online in Last 12 Months; Google Earned that in Just Three Months

Business Insider, which keeps track of such things,and prepared the above chart,  noted that while slightly down from the previous quarter, Microsoft lost $543 million in the quarter just ended, and over $2.5 billion online in the last twelve months. With division sales of $691 million and losses of $543 million, that’s about $.79 in losses for each $1 in online sales.

A great business.

$2.5 billion in losses is staggering.

“A billion here, a billion there, and pretty soon you’re talking real money,” the late Senator Everett Dirksen famously said on the Johnny Carson Show.

Microsoft is also caryying $6.37 of Goodwill on its Online division’s balance sheet, which may yet need to be written down.

That loss is about equal to what Google made in the quarter just ended on quarterly sales of $6.37 billion, up 29% from the year before. See here for details.

As the world moves to cloud computing, the Wall Street Journal has defined Cloud Computing as:  “selling processing power, data storage and software hosting services over the Internet.”

As Microsoft continues to bleed, the competition is getting steeper and stronger. Verizon just agreed to buy Terradata for  $1.4 billion. Amazon has now entered the bulk email business, and has added AWS Elastic Beanstalk, which it calls “an even easier way for developers to quickly deploy and manage applications in the AWS cloud.” Elastic Beanstalk automatically handles the deployment details of capacity provisioning, load balancing, auto-scaling, and application health monitoring. Amazon says, “The first release of Elastic Beanstalk is built for Java developers using the familiar Apache Tomcat software stack which ensures easy portability for your application. There is no additional charge for Elastic Beanstalk – you only pay for the AWS resources needed to store and run your applications.” While Amazon does not break out segment earnings,  AWS is believed to be profitable and to account for more than most of the $953 million in 2010 sales that Amazon calls “Other,” and which grew 50% from  $653 million in 2009, suggesting that AWS will exceed $1 billion in 2011.

We would be remiss if we did not note that Google announced a passing of the CEO baton to Larry Page.

Clint Boulton opined in e-Week that the change ” raises questions about the future of the company effectively marketing Google Apps for businesses. Google’s slip here would make Microsoft, with its enterprise clout, the prohibitive favorite for cloud collaboration software.” While noting that Dave Girouard and his team have, “quite impressively, tacked on 1 million business customers a year since the product’s inception as a business platform in February 2007,”  he then opines that he predicts that Larry Page will cede the business market to Microsoft as he doesn’t think Page cares about business and so Boulton sings the praises of Microsoft 365,  which he finds “polished.”

The GoogleGazer thinks that is exceedingly unlikely to happen, and views the notion of ceding Google’s business markets to Microsoft and its social markets to Facebook as nothing more than sour grapes and wishful thinking on the part of the dying but still breathing coterie of Microsoft Forever cheerleaders.


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  1. […] Microsoft Lost $2.5 Billion Online in Last 12 Months; Google Earned that in Just Three Months […]

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