What are the costs Microsoft incurred after a failed investment

Microsoft Corporation is the largest international company producing various kinds of software for personal computers and other high-tech devices. Over the past few years, the corporation has achieved high financial results, despite competition and difficulties associated with the global economic crisis. However, the company was unable to avoid financial losses due to investment errors.

As a result of work in the next quarter of 2012, Microsoft decided to voluntarily write off $ 6.2 billion from its profit. This is necessary to cover the costs incurred by the company after unsuccessful investments in various sectors of the Internet, according to a press release from Microsoft.

Financial reporting standards in the USA oblige companies to check the effectiveness of business operations for each business unit at least once a year. If the investment decision does not live up to expectations, the company should voluntarily adjust the profit by providing shareholders with reliable information about the financial performance. In particular, this principle applies if the amount of the acquisition of other companies exceeded the value of the assets of the acquired business object and did not bring income.

Microsoft's unsuccessful investments are primarily associated with the purchase of aQuantive advertising agency several years ago. With this purchase, it was intended to strengthen Microsoft’s position in the online advertising market relative to Google. The takeover actually turned out to be meaningless and did not bring the expected results. The amount of costs in excess of $ 6 billion is large even for such a giant corporation as Microsoft.

In addition to this unsuccessful investment project, Microsoft's growth rates are expected to slow due to the lag in the development of the Bing search engine and the MSN portal from the planned results. According to some indications, the profit of these services and the user base will be significantly lower than the forecast indicators, which determines their loss-making. According to research, in the US search services market, Bing is approximately 15%, and the share of the Google search engine is more than 60%. Despite temporary investment setbacks, Microsoft plans to release a number of new products in the near future and continue to expand its sphere of influence in the complex IT market.