Strong Quarter at Microsoft, and an Upbeat ’08 Outlook, Bring Wall St. a Sigh of Relief - New York Times

MSFT Q2 details; see the full article for  more

In an interview, Christopher P. Liddell, Microsoft’s chief financial officer, said the sales of Windows Vista were $300 million to $400 million higher than the company’s internal projections, and Office 2007 sales were about $200 million higher.

In the online services business, where Microsoft trails its main rivals, Google and Yahoo, Mr. Liddell pointed to a 23 percent increase in ad revenue as “encouraging progress.” The continuing losses, he added, are regarded as investments as Microsoft tries to build that business. “We’re in investment mode, and that’s going to be our strategy for the foreseeable future,” Mr. Liddell said.

And it is a big-spending financial arms race for the major companies. According to Ms. Friar of Goldman Sachs, Microsoft is expected to spend an estimated $4 billion in 2007 on online services business, excluding capital expenditures, like equipping data centers. Yahoo, Goldman estimates, plans to spend $4.7 billion, and Google, $8 billion.

Reality check: Google is expected to spend twice as much in this domain as Microsoft in 2007, and Yahoo!, often considered a has-been in the mainstream press, is also projected to invest more than Microsoft.  Let's see, if we add MSFT's $4B and Yahoo!'s $4.7B, ...

Source: Strong Quarter at Microsoft, and an Upbeat ’08 Outlook, Bring Wall St. a Sigh of Relief - New York Times