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A First As A Public Company, Microsoft Reports Quarterly Loss

Microsoft CEO Steve Ballmer comments on the Windows 8 operating system before unveiling Surface, a tablet computer to compete with Apple's iPad.
Damian Dovarganes

Microsoft made a $6.2 billion accounting adjustment this quarter that threw it into negative territory for the first time as a public company, the AP reports.

Microsoft took the charge mostly based on the acquisition of aQuantive, an online advertising company Microsoft acquired in 2007.

As MSNBC reports, the "charge was an acknowledgement that the company's struggling online services division — which lost about half a billion dollars in the previous quarter — is a significant financial drag on the company." Microsoft, remember, is the owner of the search engine Bing.

The New York Times reports the loss shouldn't be blamed entirely on that transaction:

"Windows sales looked worse than they really were in part because Microsoft had to change how it recognized that revenue because of an offer it has extended to people who buy PCs running Windows 7. Under that offer, computer users can pay $14.99 to upgrade to the new version of Windows 8 when it comes out in October.

"If Microsoft did not have to defer a portion of its Windows sales, which amounted to $540 million during the last quarter, its Windows revenue would have risen 1 percent, a still dismal performance that underscores the challenges in the traditional computer business right now."

Engadget, however, takes a different look at the earnings report. Microsoft, they report, also posted a record revenue of $18.06 billion.

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Eyder Peralta is NPR's East Africa correspondent based in Nairobi, Kenya.
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