July 19, 2013 Last Updated 8:05 am

Microsoft takes giant write down because of tiny sales of tablet

Sometimes really bad marketing gets its just reward, poor sales. So it is with Microsoft’s Surface tablet, which you were supposed to buy because it makes a snapping sound and enables you to dance on your head on table tops – or something like that.

SurfaceRT-smThe Redmond, Washington software company will be forced to take a $900 million charge because it could not sell its new tablet in sufficient enough numbers. This follows a previous write off of $782 million related to Microsoft Office.

But Microsoft’s actual earnings on the quarter were quite good: a 10 percent gain in revenue and net income of $4.97 billion (and damn good margins, too). But the news from the financial media this morning is that Microsoft blew it.

“While our fourth quarter results were impacted by the decline in the PC market, we continue to see strong demand for our enterprise and cloud offerings, resulting in a record unearned revenue balance this quarter. We also saw increasing consumer demand for services like Office 365, Outlook.com, Skype, and Xbox LIVE,” said Amy Hood, chief financial officer, Microsoft, in the company’s earnings statement.


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