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Matt Yglesias notes that investors are shrugging their collective shoulders at Microsoft’s news that it lost money last quarter for the first time in its history:

Interestingly, markets aren’t freaking out and Microsoft’s stock isn’t tanking. That’s because investors seem happy to accept Microsoft’s view that this is basically all just a matter of accounting gimmicks (“the previously announced non-cash, non-tax-deductible income statement charge of $6.19 billion for the impairment of goodwill and the deferral of $540 million of revenue related to the Windows Upgrade Offer”) and the company offered a parallel non-GAAP earnings measure showing very solid 7% revenue increase and 12% operating income increase.

I’m not actually sure how reassuring I would find any of that. If you look at the statement, the basic structure of Microsoft continues to be that it has highly profitable franchises selling Windows and Office and enterprise server software yoked to a staggeringly unsuccessful online services division.

This is no surprise. Especially in the high-tech world, investors have long since concluded that official GAAP earnings are indeed basically a collection of accounting gimmicks and that a simpler look at earnings probably provides a better snapshot of a company’s health. So they’re happily accepting Microsoft’s view because it’s the view that’s been conventional wisdom for a long time.

The second paragraph is more interesting, and it’s the real reason no one freaked out over this news: the market gave up on Microsoft’s online business and priced that failure into Microsoft’s market cap long ago. At this point, investors are probably just relieved that Microsoft has finally admitted the obvious, which might mean that it’s ready to try something different.

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Fact:

In-depth journalism that investigates the powerful takes real money and is so damn important right now.But it doesn’t take a Mother Jones investigation to know that billionaires and corporations will never fund the type of reporting (like they do politicians) we do that exists to help bring about change. Instead, our mission-driven journalism is made possible by people power, and has been for 46 years now since our founding as a non-profit.

In “TITLE TK” Monica Bauerlein writes about the perilous moment we’re in, and why it’s so important that we raise $325,000 by the time November’s midterms are decided so we can be ready to throw everything we have at the big issues facing the nation no matter what happens. Please help MoJo’s people-powered journalism with a donation today.

$400,000 to go!

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