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A Microsoft Break-Up Could Unlock Its True Value - Barron's

Xbox is a money loser. The box is sold at a huge loss, and reliability is so bad MS has replaced some customers boxes 3 or 4 times. Game sales still haven't caught up with the razor/razor blades model they are using.

The online division has and will always lose vast amounts of cash.

Zune has been massively costly.

The office productivity software is profitable but will see massive erosion now that there are other viable options. Many but customers have moved on.

The OS business is the only thing that makes, or rather, prints money. The huge revenue and high margins are the classic software product. It is not a great OS but it's base is huge and has a very long tale, the shift to another platform (like Apple) will take a decade or more.

MS would do well to unload all these losers so they can focus on straightening out the Vista mess, because OS and Office sales are the only thing they make real money on.

Buying Yahoo would be the worst thing for both companies, though Yahoo stock would benefit,