Five Businesses: Financial Overview

Microsoft reports finances in five business segments.

Client includes desktop OSs.

Business includes Office, Office Live, Exchange, Dynamics, and other business software.

Server and Tools includes server platform software and developer tools.

Entertainment and Devices includes Xbox, consumer hardware and software, and mobile and embedded hardware and software.

Online includes Live Search, Windows Live, and MSN.

Other includes revenue, such as favorable legal settlements or liability reductions; and expenses, such as legal charges, human resources expenditures, and companywide marketing efforts that cannot be attributed to any one business segment.

For each business segment, this chart shows its estimated and actual revenues in FY’07, operating income or loss in FY’07, and estimated revenue for FY’08 as expressed at the 2007 Financial Analyst Meeting (FAM). (Microsoft does not estimate operating income or loss for each business unit.)

Note that the FY’07 revenue estimates have changed slightly since last year, due to changes in how Microsoft attributes revenue to each segment. This chart uses the FY’06 revenue figures reported in Microsoft’s most recent 10-Q filing, combined with the percentage growth estimates given at last year’s FAM.