If ever you needed reminding of the effect of the current global financial crisis then here is a story for you. It’s not only affecting small businesses, but large (normally profitable) companies are feeling the pinch.

The latest financial numbers from Microsoft show that it posted its first ever year-over-year quarterly drop in revenue. Yes, you read correctly, its first ever in its 30-year history.

Here are the stats from Microsoft:

Revenue of $13.65 billion for the third quarter ended March 31, 2009, a 6% decline from the same period of the prior year.

Microsoft doesn’t see things getting any better in the coming months either. “We expect the weakness to continue through at least the next quarter.” said Chris Liddell, Microsoft’s chief financial officer.

What might be of most interest to you is their online advertising revenue. It fell by a massive 16% due to a significant drop in ad rates. There was one positive however, with growth in both page views and queries on its search engine. This drop in revenue makes me wonder if its time for Microsoft to throw in the towel…

Marketing Pilgrim’s Andy Beal has a suggestion for Microsoft…

Perhaps Microsoft needs to concede the battle to Google. Maybe, instead of acquiring Yahoo to bolster its online offerings, it should be begging Yahoo to take its own online services off of its hands. Maybe it’s time for Microsoft to go back to being a software company.

What do you think? Would anybody miss Microsoft’s online marketing if it was given the axe?

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