Thumbnail image for surfaceart.jpgMicrosoft's fourth quarter results show that it had to take a US$ 900 million write down on the stock of tablets it is holding and is unlikely to ever sell. As a result earnings came in well below expectations resulting in a fall in share-price of over 6%.

Surface RT, PCs

Surface RT was not the only problem -- there many others that saw Microsoft struggling to meet market expectations and failing in many areas.

That is not to say that there weren’t good performances in different segments, particularly in the enterprise segment, but the overall impression is of a company that still has to come to terms with the face of new, consumer computing habits that include mobile and cloud computing.

How Microsoft ultimately deals with this remains to be seen, but the recent restructuring announcement and streamlined company of the future is a start.

Even Amy Hood, giving her first earnings announcement since becoming the new Chief Financial Officer wasn’t trying to make excuses. She told analysts after the results were published that Microsoft would just have to do better. A lot better too.

I want to be clear—we know we need to do better, which is why we instituted the reorganization we did last week," she told analysts on the earning conference call.

Microsoft seems to be in a market that it really appears to be struggling to master, even if figures from things like Office 365 or its cloud services indicate that it will get there eventually.

The PC market also had a serious impact on the figures. According to Microsoft’s own estimates yesterday, PC sales to consumers have dropped by as much as 20% over the quarter, while sales of Windows software to PC makers is expected to drop by a percentage point somewhere in the mid-teens.

The writing is on the wall, and it says no matter what, you have to take the devices road. The message hasn’t been missed by Steve Ballmer either:

We are working hard to deliver compelling new devices and high value experiences from Microsoft and our partners in the coming months, including new Windows 8.1 tablets and PCs…Our new products and the strategic realignment we announced last week position us well for long-term success, as we focus our energy and resources on creating a family of devices and services for individuals and businesses that empower people around the globe…” he said.