2007 Roundup: A bumpy ride for Microsoft

2007 Review of the Year

The 'most reputable company in the US', as Microsoft was dubbed by analyst firm Harris Interactive back in February, had its share of ups and downs in 2007.

The company kicked off the year with one of its favourite hobbies: the launch of a new operating system and office software.

Windows Vista and Office 2007 were officially unveiled to consumers at a company event in New York. The software was available in 17 languages across 70 countries from 30 January.

Reports from the first week of sales for Vista suggested that the outlook for PC distributors was good, at least in the short term.

Research firm Current Analysis said that Vista's release caused a jump of 173 per cent in PC sales for the week ending 3 February, with Vista-equipped PCs accounting for 92 per cent of those sales.

The new operating system wasn't without competitors, though. According to industry analyst Forrester Research, Vista's main source of competition was from the company's own existing software, Windows XP.

Following the news that Windows XP was still selling well, it's no wonder the software giant decided to extend its lifespan.

Microsoft confirmed that it would add another five months to XP's availability, making it available to original equipment manufacturers and retail stores until 30 June 2008.

Dixons Stores Group probably wished it had a crystal ball when it came to XP and Vista sales. The company blamed poor sales of Vista-loaded laptops for a £20m slump in its UK profits.

Even Service Pack 1 got a rough ride when it arrived later in the year. Researchers from the EXO Performance Network claimed that its benchmark tests showed that users hoping to receive a speed boost from the update would be disappointed.

With Vista out of the starting blocks in 2007, it was also time for Microsoft to add to its software portfolio.

However, the launch of Microsoft's OneCare security software was initially marred by a number of test failures. It finally passed Virus Bulletin's coveted VB100 computer security test in June.

In the latest test results in December, OneCare even managed to hold onto that record, when other big names such as Sophos, Trend Micro and Kaspersky failed to protect against a collection of outdated viruses.

Microsoft also expanded its media empire further in 2007, by opening a film download service on its Xbox Live online service.

'About time too', some will have thought, considering Xbox Live has now been around for five years.

And talking of 'about time too', Windows Server 2008 has lived up to its name, despite being shown off in May 2007.

The software's launch date was pushed back and pushed back in 2007 until it reached the first quarter of 2008.

But this year will be renowned in Microsoft legend as the time the software behemoth was finally slain by antitrust actions.

In October Microsoft decided to pay the EU its money, settling the fines handed down after the antitrust case.

It also chose not to appeal the case a second time, after its first appeal was rejected by the European Court of First Instance a month earlier.

Meanwhile, seven of the US states that successfully sued Microsoft over antitrust issues asked for the original ruling to be extended until 2012.

The legal move was started by California, Connecticut, Iowa, Kansas, Minnesota, Massachusetts and the District of Columbia, which were unhappy with Microsoft's delays in complying with the original ruling.

However, the US Department of Justice claimed that competition and consumers have benefited from the antitrust enforcement efforts against Microsoft.

The DoJ said that the development and distribution of middleware, including web browsers, media players and instant messaging software, had been protected by its actions.

But before you get worried that Microsoft might have fallen on hard times, there was plenty of life in the old girl in 2007.

The company continued to grow to a point where it was too big for its own campus. Microsoft added 2.4 million square feet to its Seattle HQ and formally opened the new international headquarters for Microsoft Research at Building 99, the first of seven new sites on the software giant's West Campus.

And its founder isn't short of a few bob, either. Bill Gates retained his standing at the top of the Forbes Rich List with a personal fortune estimated at $59bn (even if he did lose his position briefly for the first time since 1995 to Mexican telecoms tycoon Carlos Slim.

Gates's fortune was helped thanks to a record year when it came to Microsoft's annual sales.

In July Microsoft announced 12-month revenues of $51.12bn, surpassing $50bn for the first time ever.

That bumper year came despite the company having to put aside $1.15bn to deal with the problem of faulty Xbox games consoles.