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Microsoft Revenues Rise As Office 2010 Sales Grow

2011 was a good year for Microsoft (NASDAQ:MSFT).

Microsoft reported record fiscal 2011 earnings late Thursday of $69.94 billion for a 12 percent year-over-year increase. Net Income for the year was reported at $23.15 billion for a 23 percent year-over-year gain. Earnings Per Share came in at $2.69 which is a 28 percent year-over-year gain.

Microsoft's full-year earnings were supported by a strong fourth quarter report. For the fourth quarter of Microsoft's fiscal 2011, the company reported revenues of $17.37 billion for an 8 percent increase. Net Income was reported at $5.87 billion for a 30 percent year-over-year gain. EPS came in at $0.69 per share for a gain of 35 percent.

"We closed the year with terrific sales execution, as enterprises furthered their commitment to our Windows, Office and Server products," Peter Klein, chief financial officer at Microsoft said on the company's earnings call. "Customers continued to invest in our Business Desktop offerings, including Windows 7, where enterprise deployments have increased almost 50 percent since March."

While Window 7 is growing well, Klein singled out Office 2010 as a big winner for Microsoft.

"Our financial results reflect Office 2010's outstanding market reception," Klein said. "Deployment remains 5x faster than the previous version."

Klein added that Microsoft customers are also adding business productivity applications, including Exchange, SharePoint, Lync and Dynamics to their multiyear agreements. These 4 products collectively drove approximately 30 percent of the business division's growth this year.

Moving forward Microsoft has big plans for growth. In May Microsoft announced a deal to acquire VoIP provider Skype for $8.5 billion.

Klein noted that the deal will extend Skype's world-class brand and global reach of its networked platform, while at the same time enhancing Microsoft's existing portfolio of products and services.

"With Skype, we will increase the accessibility of real-time video and voice communications to both consumers and enterprises, thereby generating new business and revenue opportunities for Microsoft," Klein said.

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.