When Microsoft announced its 4th quarter earnings, as Todd Bishop reports in TechFlash, the company made some changes in the way it reports Windows Live income, which Microsoft detailed Sept. 22. Previously, Windows Live was included within the Online Services Business (which was renamed today to Online Services Division), and wasn’t broken out individually. (edited to correct timing)
As of today’s earnings report, however, Windows Live has moved into the Client division (think: Windows client), and a set of slides included with the earnings report breaks down Windows Live revenues and income (or lack thereof):
The slide deck goes back and breaks down Windows Live revenue and income by quarter, and not unlike many many other advertising dependent operations, Windows Live took a pretty big hit over the year, which deepened as the year progressed.
(in millions of US dollars – rounding accounts for the discrepancies – all numbers are from the slide deck)
TechFlash quotes Tami Reller from the earnings conference call:
Windows Live generates revenue mainly through advertising. Windows executive Tami Reller told analysts this morning that Windows Live’s expenses come in three major areas: Data centers; research and development and innovation; and sales and distribution. She said those types of investments will continue to be important for Windows Live, signaling that Microsoft plans to keep spending significantly in those areas.
“Windows Live is clearly strategic to the company and strategic to Windows,” Reller said on the conference call. “That’s true for the short term and the long term.”
The earnings call, while revealing some sobering ad revenue numbers for Windows Live (yes, the economy sucks), may have been more interesting for the revelations that Windows Live is now a full fledged part of Windows, and that Mobile Services has moved from Online Services to Entertainment and Devices. This leaves MSN, Microsoft Advertising, and Bing in Online Services (which, without Windows Live and Mobile, still lost 1.6 billion dollars last year).