Microsoft makes a loss for the first time in recorded history

Software giant Microsoft had to face the humiliation of recording its first ever quarterly loss in its corporate history.

Since the company went public in 1986, Microsoft has never lost money and it is seen as a blue chip investment.

However the company had to report a net loss of $492 million as its operating income was wiped out by a $6.2 billion writedown of the advertising company aQuantive.

Microsoft CEO Steve “sounds of silence” Ballmer bought aQuantive in 2007 as a method to get advertising dollars from this Internet thingee. It did not really fit with the company and lost a fortune. Microsoft wrote down almost the entire $6.3 billion purchase price.

Generally Microsoft’s online services division is dragging the company down. In the last year it lost nearly $2 billion even without the $6.2 billion writedown.

Vole is having to spend a fortune on  search engine Bing, but that’s not making much impact.

Analysts are saying that Microsoft just can’t compete on the advertising-driven web and should probably walk away and think about something else.

To be fair to Microsoft, it did a lot better than many analysts expected. Ballmer was able to point out that the company made record revenues of $73.7 billion for the fiscal year just ended and $18 billion for the latest quarter. All this was up four to five percent from year earlier levels which is not bad considering that Microsoft is about to release its new Windows 8 and Office products.

Most of the money was made by Microsoft’s server tools, business products and entertainment and devices, which includes Xbox and Skype.

In fact the figures were so good that a cynic would suggest that Ballmer decided to wait until a good quarter before writing off aQuantive in the hope that it would not look as bad.

It seems to have worked Microsoft shares rose 2.5 percent in post-market trading after closing at $30.67 on Nasdaq.