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 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.

MSN includes all MSN sites and services.

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

Business Solutions includes business management software, such as Great Plains, Navision, and MSCRM; sales and marketing initiatives for small and mid-size businesses; and the Microsoft Partner Program.

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

This chart shows revenue and profit or loss for each business segment for Q2’05 and the same quarter a year ago. The last column shows the percentage change in revenues between Q2’05 and the same quarter a year ago. The row Other Expenses counts expenses that cannot be attributed to any single business segment, including broad-based marketing and administrative expenses. Some Q2’04 figures have changed because Microsoft has reconstituted its business segments and restated past earnings accordingly. For instance, sales and marketing initiatives for small and mid-size businesses and the Microsoft Partner Program were moved from Information Worker to Business Solutions, and Professional support was moved from Information Worker to Server and Tools.