Microsoft Has Great Quarter on Halo 3 and Vista sales

The one really positive thing is that computer sales were up 15% in September so it will help a slew of different companies. I also like how MSFT expanded their revenue number so well.

The world's largest software maker said net profit in its fiscal first
quarter totaled $4.29 billion, or 45 cents per diluted share, versus a profit of
$3.48 billion, or 35 cents per diluted share, a year earlier.

Revenue rose 27 percent to $13.76 billion in the three months ended
September 30.

They also took a bite out of Facebook to the tune of $240 million for a 1.6% stake of the company. This really makes News Corp.'s MySpace purchase for $580 million for 100% of that company look like big time bargain.


I still don't think that Facebook is worth the $15 billion that Microsoft is valuing it at. I mean the company is not even doing $200 million in annual revenue. I would rather see MSFT spend that money going after a company like Electronic Arts and merging them with their game division. All of that IP and distribution might would put Microsoft in as an untouchable leader in both making the game system as well as the software that goes on it.


I guess all of the eyeballs (who don't seem to spend much money) on Facebook is what is driving the deal. My fear is that facebook seems like a 2nd tier social network compared to MySpace and they are valueing it 25 times higher. I guess the advertising opportunity is quite large if people keep using Facebook. However if there is any dropoff as the target demographic gets older or start to go to other social networks then this may be money wasted.