Microsoft's Thursday earnings report was both good and bad news for the software company.

The good news is that sales of Windows are up significantly, indicating that consumers are buying new Windows Vista systems. Similarly, there is a significant uptake in Office sales.

The bad news is that Windows, Windows Server and Office are the only profitable business groups. The gaming group (Xbox) and Online services group (Live search, Hotmail, etc) continue to bleed red ink.

28 Apr 2007

Microsoft is splitting out its earnings in a very strange way, throwing sales of the Zune (pictured above) Windows CE and Windows Mobile in with Xbox sales. Similarly, sales of Microsoft's CRM and ERP suites are thrown in with Office sales.

It is however, safe to assume that Office accounts for the majority of the $4.8bn that the business division sold (and the $3.4bn in profits that it got from those). Similarly, Windows Server sales are the driving force behind the "server" division. SQL Server after all doesn't run on Linux, HP UX or Solaris.

Microsoft chief executive Steve Ballmer has repeatedly called Google a one trick pony that has failed to succeed anywhere outside its search advertising business. Microsoft however is only doing slightly better. It has built a successful business for its Office and Windows (and Windows Server) software, but the online and gaming groups are still hurting, despite large investments.

Another one of Microsoft's great successes