Investors in Microsoft are grumbling that their company already has poured too much money into online efforts with few rewards. The online division's annual operating losses top $700 million, and revenue has increased little in two years.
Financially, Microsoft has coasted for more than a decade on the strength of just two pillars, Windows and Office, which generated more than $22 billion in profit last year even as its other divisions posted a collective loss. The company has pumped that cash into new products on many fronts.
It has chased consumers with the family of MSN services, spending a fortune on search technology to compete with Google, and with the Xbox console and video game titles that have eaten up more than $6 billion. It also developed the Zune media player.
Although the Xbox 360 has become the best-selling next-generation console, Microsoft's gaming division has yet to turn a profit. Zune has scarcely slowed the rise of Apple Inc.'s iPod. And Microsoft's search engine is falling farther behind Google's, attracting only 11 percent of the U.S. market in August compared with 57 percent for Google, according to ComScore.