Microsoft has exceeded analyst expectations over the Christmas quarter with a 23 per cent rise in search advertising, fuelling a wider 8 per cent rise in overall sales to hit $26.5bn.
The figures scotch suggestions that the software giant may be entering its sunset years after missing the boat on the mobile revolution, despite a belated attempt to enter the market with its purchase of Nokia. Microsoft sold 10.5m smartphones in the last quarter but still cornered a paltry 2 per cent of the global market.
Recognising the need for change Microsoft is steadily repositioning itself away from its bread and butter business of selling software licenses toward subscription-based services.
Illustrating Microsoft’s reliance on its core activities its commercial licensing activities brought in 61 per cent of total margins ($9.9bn) and devices and consumer licensing which amounted to 24 per cent of the total ($3.9bn) – albeit both businesses are in long-term decline, particularly the consumer end which fell 25 per cent year-over-year.
Elsewhere revenues from the firms Surface tablets reached $1.1bn after rising 24 per cent with 6.6m Xbox devices also shifted.