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Windows 7 sales give Microsoft a boost

Microsoft saw its profit jump by 35 per cent this quarter thanks largely to the fact it managed to produce a Windows product that wasn't a complete dog.

January to March represents the Vole's third fiscal quarter, during which the outfit posted $4.01 billion, in profit - or 45 cents per share. Market watchers are a bit confuzzled as many expected Microsft to emulate Intel which quadrupled earnings over the same quarter.

In a conference call, Microsoft CFO Peter Klein reckoned the hardware business was bouncing back more quickly than software. "If you think about what's happened over the last year," he said, "the first thing that got hit and decreased earliest and fastest was hardware, and that's what's coming back first."

A year ago Microsoft posted profit on $2.98 billion, or 33 cents per share. This year revenue was up six percent to $14.5 billion, a billion up over the same quarter a year ago.

Sales of of Windows to consumers were up by 35 per cent the firm said, while the business end was up by 15 per cent.

Microsoft lost $713 million online in its efforts to catch up with Google. It paid Yahoo $78 million during the quarter in an attempt to bolster the anti-Google alliance.

Revenue from business software, including Office, was down six per cent to $4.2 billion, while the firm's entertainment division, which includes the Xbox business and the Windows mobile OS, snuck up two per cent to $1.7 billion.