World Bulletin / News Desk
Microsoft Corp admitted its largest acquisition in the Internet sector was effectively worthless and wiped out any profit for the last quarter, as it announced a $6.2 billion charge to write down the value of an online advertising agency it bought five years ago.
The announcement came as a surprise, but did not shock investors, who had largely forgotten Microsoft's purchase of aQuantive in 2007, which was initially expected to boost Microsoft's online advertising revenue and counter rival Google Inc's purchase of digital ad firm DoubleClick.
Microsoft's shares dipped slightly to $30.28 in after-hours trading, after closing at $30.56 in regular Nasdaq trading.
The world's largest software company said in a statement that "the acquisition did not accelerate growth to the degree anticipated, contributing to the write-down."
Microsoft bought aQuantive for $6.3 billion in cash in an attempt to catch rival Google Inc in the race for revenues from search-related display advertising. It was Microsoft's biggest acquisition at the time, exceeded only by its purchase of Skype for $8.5 billion last year. But it never proved a success and aQuantive's top executives soon left Microsoft.
As a result of its annual assessment of goodwill - the amount paid for a company above its net assets - Microsoft said on Monday it would take a non-cash charge of $6.2 billion, indicating the aQuantive acquisition is now worthless.
The charge will likely wipe out any profit for the company's fiscal fourth quarter. Wall Street was expecting Microsoft to report fiscal fourth-quarter net profit of about $5.25 billion, or 62 cents a share, on July 19.
In addition to the write-down, Microsoft said its expectations for future growth and profitability at its online services unit - which includes the Bing search engine and MSN Internet portal - are "lower than previous estimates".
The company did not say what those previous estimates were, as it does not publish financial forecasts.
Microsoft's online services division is the biggest drag on its earnings, currently losing about $500 million a quarter as the company invests heavily in Bing in an attempt to catch market leader Google. The unit has lost more than $5 billion in the last three years alone. Even though its market share has been rising, Bing has not reached critical mass required to make the product profitable.
Before rolling out Bing in June 2009, Microsoft's Windows search engine had 8 percent of the U.S. Internet search market, compared with Yahoo's 20 percent and Google's 65 percent.
In the three years since then, Bing has almost doubled its market share to 15 percent, but that has been mostly at the expense of Yahoo, which has had its share whittled down to 13 percent. Google now has almost 67 percent, according to research firm Comscore.
Yahoo's internet searches are powered by Microsoft's Bing under a 10-year agreement initially struck in 2009. Microsoft hands back to Yahoo 88 percent of revenue generated from search ads on Yahoo sites. That deal has not met the ambitious targets set by either company.
Russia's oil output stands at over 10 million barrels per day, the world's largest, but it needs new sources of crude oil, including hard-to-recover deposits and the Arctic, to sustain this level
The strike at Yue Yuen is not just one of China's biggest in recent years, it's also more clearly driven by workers' fears that they have been scammed by an opaque and convoluted welfare payment system.
When the system is in place citizens will be able to buy a limited amount of subsidised fuel, and will have to pay a normal, market price for any extra quantities.
Production in Upper Nile state's Paloch oilfields, where output has not been hampered by the conflict, stood at 159,000 barrels per day this week.
Dragomir Stoynev accused fellow European Union members of a politically-motivated attempt to scupper the project, and urged the bloc to understand the effect that doing so would have on its members.
The drops have come mainly because Japan did not take any cargoes in March and South Korea is not scheduled to take any shipments in April, according to the tanker data.
Japan's finance ministry and central bank have declined to comment on the payments.
But a survey shows that most people believe inflation is speeding up and could surpass 37 percent this year.
A fifth payment of $450 million was due on April 15, contingent on Iran having diluted half of its most sensitive stockpile of nuclear materials
The year-on-year inflation rate in the 18 countries sharing the euro was 0.5 percent in March against 0.7 percent in February, the European Union's statistics office Eurostat said.
Pushed by higher food and shelter costs, the consumer price index rose in March.
Country of origin labels are currently voluntary in the European Union and many of the bloc's governments want to keep it that way
While reverse flows would help cushion the effects of a Russian export cut during mild-demand summer months, analysts say they would not be sufficient in winter.
The tanker, Aegean Dignity, is due to take its load to Italy, the NOC quoted an oil official as saying in a statement on its website
TAP aims at enhancing the security of natural gas supply as well as diversification of gas supplies for the European markets.