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Microsoft Online Business

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Analysis by:

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Silicon Alley Insider

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MICROSOFT ONLINE SERVICESSep-'05Dec-05Mar-'06Jun-'06Sep-'06Dec-'06Mar '07June-'07Sep-'07Dec-'07200520062007

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Revenue$564$593$562$580$536$625$623$688$671$863$2,344$2,299$2,474

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Expenses$496$535$586$767$638$743$823$927$935$1,108$1,932$2,373$3,206

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Operating Profit$68$58-$24-$187-$102-$118-$200-$239-$264-$245$412-$74-$732

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Margin12%10%-4%-32%-19%-19%-32%-35%-39%-28%18%-3%-30%

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Revenue Growth-5%5%11%19%25%38%8%

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Expense Growth29%39%40%21%47%49%35%

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$1600

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Advertising Revenue$350$376$371$409$367$453$456$544$487$623$2,110$1,506$1,820

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Change5%20%23%33%33%38%21%

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Agency Revenue (from aQuantive)51102$0$0

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Change

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Subscription+Access Revenue$214$217$191$171$169$172$167$144$133$138$793$652

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Change-21%-21%-13%-16%-21%-20%-18%

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Organic Ad Revenue (Less Aquantive)$350$385$371$409$367$462$456$544$458$571

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Change5%20%23%33%25%24%

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Organic Operating Profit (Less Aquantive)$68$58-$24-$187-$102-$155-$200-$239-$206-$199

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Margin12%10%-4%-32%-19%-25%-32%-35%-31%-23%

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Active Hotmail Accounts (mm)263268285310NANA

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Messenger Accounts (mm)255263278280NANA

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Analysis by:

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Silicon Alley Insider

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Red = Estimate

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*Includes publishing revenue for the public companies listed here.

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Source: Company Filings, Silicon Alley Insider estimates.