Microsoft Says Weak Dollar Buoyed Profits

Microsoft's earnings fell 11 percent during the most recent quarter. But the software giant still raked in nearly $4.4 billion in profits. Despite the slowing economy, the company issued an optimistic forecast for next year and reiterated its bid for the online company Yahoo.

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No rumors for Microsoft. The company has announced its quarterly earnings yesterday, and also took the opportunity to pressure Yahoo, again, to accept its takeover offer.

More from NPR's Wendy Kaufman.

WENDY KAUFMAN: First, the numbers. Microsoft's profit for the quarter declined 11 percent, but the company's overall results were generally in line with Wall Street's expectations. The company predicted double digit growth in revenue, operating income and earnings for this year and next. But investors were troubled by the weak quarterly sales of Windows and a lower than expected outlook for the current quarter.

Microsoft's revenue from its online advertising group continues to trail by a huge amount, that of online ad giant Google, thus underscoring the rationale behind Microsoft's bid for Yahoo. While Microsoft says its bid is generous, Yahoo maintains it's much too low.

Yesterday in a conference call with reporters and analysts, Microsoft's Chris Liddell reiterated his company's position that it would not raise the price of its bid, adding…

(Soundbite of audio)

Mr. CHRIS LIDDELL (Microsoft): Unless we make progress with Yahoo towards an agreement by this weekend, we will reconsider our alternatives. These alternatives clearly include taking our offer to Yahoo shareholders, or to withdraw our proposal and focus on other opportunities.

KAUFMAN: A hostile proxy fight, taking the offer off the table, or something else. Microsoft says it will provide updates as appropriate next week.

Wendy Kaufman, NPR News.

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