Microsoft posts rise in profits

Microsoft’s profits rose 2% to hit $4.37 billion in the first quarter, bolstered by its licensing agreements with larger companies.
In the months to September, the Redmond Giant saw sales rise 9% to $15.1 billion, driven by its computer server software. According to the company, sales in its server division rose 18%, with Windows Server 2008 and SQL Server 2008 the two stars of the show.

Despite a $300m advertising campaign, however, it appears customers are still wary of Vista. The Client division, which is responsible for selling XP and Vista, saw a rise of just 1.9%, with earnings dropping 3.6% to $3.3 billion.

Microsoft’s chief financial officer Chris Liddell says the company expects the current soft demand for products to continue, as large manufacturers switch to selling netbooks.

The company also reported a slowdown in demanded from small to medium sized businesses, worried about the impact of the credit crunch.

Microsoft now plans to cut costs by $500 million in the current financial year, with hiring, travel and marketing costs all expected to come under the microscope.

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