Like many on HN, I'm not a fanatic MS guy (despite having a deep C# background) but I'm happy to see them do well this past quarter. They've only had a series of bad PR recently, epitomized by the CEO stepping down being the highlight story of the year.<p>But this doesn't talk about specifics. Consumer devices? I don't really understand which product is doing so well for them? I know it's anecdotal but I still have yet to hear someone recommend a microsoft product in the last 6-12 months. The only people that bought their phone were people that bought because of price point.<p>Can someone shed some light on what microsoft has been selling that everyone wants? I'm really curious now.
If you look at the segments report[1] you'll find that the real drivers of the increase was Devices and Consumer Hardware, which was mostly driven by the Xbox launch, and Commercial Licensing.<p>But the Gross Margin tells a different story. When you subtract the cost of making the Xbox consoles the D&C Hardware segment actually decreased from last year. The only real increase is Commercial Licensing, which is mainly Office and servers.<p>[1] <a href="http://www.microsoft.com/Investor/EarningsAndFinancials/Financials/fy14/q2/SegmentRevenues.aspx" rel="nofollow">http://www.microsoft.com/Investor/EarningsAndFinancials/Fina...</a>
Nice. I wish they would break this out a bit more:<p><pre><code> > Bing search share grew to 18.2% and search
> advertising revenue grew 34%.
</code></pre>
It echos what we're seeing in terms of more people using alternative search channels (which, on a per page view basis, increases revenue in those channels). But for me the interesting bit is that their revenue grew twice as fast as their market share. That could be because they have moved to a point where incremental share is entirely accretive to their revenue, or it can mean that they are getting more for their ads. That would help understand whether or not Google's CPC is going to go down a little or more than a little :-).
It seems Microsoft (<a href="http://finance.yahoo.com/q/ks?s=MSFT+Key+Statistics" rel="nofollow">http://finance.yahoo.com/q/ks?s=MSFT+Key+Statistics</a>) is doing financially better than Google (<a href="http://finance.yahoo.com/q/ks?s=GOOG+Key+Statistics" rel="nofollow">http://finance.yahoo.com/q/ks?s=GOOG+Key+Statistics</a>) in every aspect.
Microsoft also has a more diversified business so I wonder why Google still has a larger market cap.
Up 14% from $21.5B from a year earlier, which was also a record:<p><a href="http://www.microsoft.com/investor/EarningsAndFinancials/Earnings/PressReleaseAndWebcast/FY14/Q2/default.aspx" rel="nofollow">http://www.microsoft.com/investor/EarningsAndFinancials/Earn...</a><p>Key difference probably being Xbox launch.
Holiday season, Xbox One launch - it's much easier to make "revenue" off $500 hardware, than from $5 a month Office services. 4 million Xbox Ones is already an extra $2 billion in revenue, regardless of what the profit is.<p>I expect their revenue to continue to increase a little bit in the next quarters (YoY), as they keep focusing on selling hardware. I don't think their profits will improve too much, and might even see a decline within a few quarters, as it gets harder and harder to sell Windows 8 licenses, since most people don't like it too much, enterprise customers don't like it, and they've just announced a year and a half before release that Windows 9 is coming next year, which is pretty crazy on their part. Android and iOS will also keep affecting the sales of PCs, and therefore the sales of Windows licenses, too.
Like it or not, their services are pervasive in the enterprise. Office 365 is the future for so many Fortune 500 companies and Sharepoint 2013 is a huge push too.<p>As much as I wish there was more Unix/Linux at my company, all eggs are in the MS basket for sure.
I'm a new investor who's learning about technology stocks. Will someone with a better understanding of the market explain what this news means to prospective investors?