Microsoft is making the front page news again. Not with super thin notebook, fancy MP3 player, gaming console, corporate take over, porn or political issue. Microsoft just doesn’t care about all these things. Not even with their patchy Windows, bugs, their over price operating system or even their under performing MS Live. They let the $$ talk on behalf of them.

Microsoft (or known as MS) announced that they made a net profit of USD4.7 bil for their second quarter (1 quarter = 3 months). It is translated to RM15.5 bil from revenue of USD16.37 bil (RM 54 Bil). Enough to cover Malaysian Budget partially.

USD4.7 bil is a lot. By looking at how much Vista was sold, it is easily understood on how MS earning is climbing and perhaps can push MS profit even higher in the next quarter. Price below shows how much Vista is priced in a single license, but the price would be different on OEM bundled together with PC or bulk licenses.

The company said it has sold 100 million copies of Vista since its January 2007 launch.

Other important points in Microsoft revenue

• The business division, which includes Office, brought in $4.81 billion in sales.
  

• Xbox 360 game console and the Zune brought in $3.06 billion. The division make a profit of $357 million from a loss of $302 million last year.

• Online services business (Live and advertising) rose up to 30%, but widen the loss to $245 million, from $118 million a year ago.

By looking at this figure (and table below as well), Microsoft’s main contributor came from its office suite, operating system (workstation and server), server and other software licensing. The only place where Microsoft is losing its ground is on its Online business. We know who’re the KING on online right… While Microsoft has found its arch rival in online business, Microsoft is still the undisputed champion in offline business. And even though Apple’s Leopard who also gained its market share last quarter, it’s still a long way to go before Leopard can treat MS Vista seriously. The simplest situation that I can see is how Windows is widely used by government sector and big corp due to its easiness and broad support provided by them (even though sometimes it’s not that good).

So while MS profit keeps on increasing which shows their sales in their product such as office suite and home computing growth are tremendous, it also got me to question if open source application such OS in uBuntu, office suite in Lotus Notes and Star Office does really impact MS revenue and profit. If we let the numbers speak, the answer is definitely NO. There is a lot of buzz about Ubuntu, and some computer manufacturers such as Dell and HP who had even started shipping system with this OS,  but the fact that most users are still relying on MS to do their daily task especially in office is showing how MS has deeper influence than most of us had thought. Using Ubuntu for experiment is not really parallel on goal in a way the open source community would want.

The recent subprime issue which is overshadowing the US economy also, seems like does have any impact on MS revenue due to the nature of its business which is located around the world. If you’re to venture into any business, you’re highly advised to practice what MS did.

• Build (or copy but make it better) product that everybody use, regardless of the geographical or economical situation
  
• Kill your competitors (give it away, allow piracy (on initial stage only))
  
• Show image that MS product is better supported (compared to open source)

Just some further info if you’re interested to know how much MS operating profit for the same period system of his fiscal year ad last fiscal year

Microsoft operating income brake down and comparison table. (see detail )

                                                                   3 Months Ended     Months Ended
                                                                           Dec 31                Dec 31
                                                                     2007        2006        2007     2006

source : Yahoo News, CNNMoney Microsoft