Revenue and Profit (Loss) by Business Segment

Microsoft divides its business into the following seven areas:

Client includes the company’s desktop OSs.

Information Worker includes Office, SharePoint, Project, and other business productivity software and services.

Server and Tools includes all Windows server OSs and most server applications (including SQL Server and Exchange Server), server Client Access Licenses, development tools, and corporate services such as consulting and support.

Home and Entertainment includes Xbox, consumer hardware and software, and interactive TV platforms.

MSN includes Windows Live and MSN.

Microsoft Business Solutions (MBS) includes Dynamics business management software, sales and marketing initiatives for small and mid-size businesses, and the Microsoft Partner Program. This segment will be absorbed into the new Business Division segment in Q1’07.

Mobile and Embedded Devices includes Windows CE and the platforms based on it, plus other embedded OSs.

This chart shows revenue and operating income or loss for each business segment for Q4’06 and the same quarter a year ago. The last column shows the percentage change in revenues between Q4’06 and the same quarter a year ago. The row Other Expenses counts expenses that cannot be attributed to any single business segment, including legal expenditures and broad-based marketing and administrative expenses.