Microsoft in shock loss as Google soars

MICROSOFT last night announced a quarterly loss of $492m (£313m) – its first since becoming a listed company – on the same day that the firm’s tech rival Google boosted net income to $2.79bn.

While Google’s revenues soared on the back of growth in its web-based advertising business, Microsoft slipped into the red following a writedown on its own ill-fated online ad operations.

The firm had given the markets advance warning that it would take a $6.19bn hit on the value of aQuantive, a digital marketing group it acquired in 2007.

Despite this, revenues at Bill Gates’ former company rose four per cent to $18bn, with its Office unit helping to offset sluggish sales of PCs that feature its flagship Windows operating system.

Microsoft is pinning its hopes on its new Windows 8 system, which is due out in October and designed with touchscreens in mind. It is also set to break with its traditional software-only model and produce its own range of tablet computers.

Meanwhile Google shares rose in after-hours trading after the firm said total revenue was up 35 per cent year-on-year to $12.2bn, helped by the purchase of Motorola Mobility.

Google announced sales at its core internet business hit $10.96bn in the last quarter, up from $9bn a year earlier, even though advertising rates have fallen 16 per cent year-on-year.

This is because overall number of clicks on ads increased by more than 40 per cent as the number of people using the world’s biggest search engine continues to grow.