Vista profits MS

Microsoft’s profits rose by seven per cent to touch $3.4 billion in the first quarter of 2007, thanks mainly to the success of its new operating system Vista. However, Microsoft mandarins were not grinning from ear to ear as the company had lost money on the much-hyped Xbox game console, which turned out to have many hardware flaws. It had extended the warrantee for the console to three years as part of its damage control exercise and would have to spend an extra $750 million for this. The console imbroglio is reported to have reduced profits by about $1.06 million. However, Vista and MS Office 2007 together bolstered earnings this quarter. Microsoft is hoping to do better next year when it will release new server software and the much-anticipated Halo 3 video game.