Closely following the publication of Google's and Yahoo!'s financial results for the last quarter comes Microsoft. Widely reported in the press, including by The Wall Street Journal, the software giant posted a 32% drop in profit and the first decline in quarterly revenue in its 23-year history as a public company, due to the global recession having an impact on nearly every segment of their business.

Microsoft has blamed the 16% drop in sales for their Windows software on the reduction in the PC market within the consumer and business sectors, although there may also be an element of customers now waiting for the new improved version of Vista to appear before the year end.

More notably for Microsoft's Internet-focused business was the more than doubling of operating losses from the online services division, to US$575 million. Microsoft is still desperate to improve its competitive position in Internet search and advertising against Google, but has made little progress by the most important measures. The company has continued to hire within its Internet group, even as it has made staff cutbacks elsewhere in the company, and clearly hopes to see a turnaround in this sector soon, but continues to suffer from a low, and declining, share of the search market.