SecProbe.io

July 18 , 2013

Via E -mail
Frank Brod
Corporate Vice President, Finance and Administration
Microsoft Corporation
One Microsoft Way
Redmond, WA 98052 -6399

Re: Microsoft Corporation
 Form 10-Q for the Quarterly Period Ended March 31, 2013
Filed April 18, 2013
File No. 000 -14278

Dear Mr. Brod :

We have reviewed your letter dated July 2, 2013 in connection with the above -referenced
filing an d have the following comments.  In some of our comments , we may ask you to provide
us with information so we may better understand your disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested
response.   If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your respons e.

After reviewing any amendment to your filing and the information you provide in
response to these comment s, we may have  additional comments.   Unless otherwise noted , where
prior comments are referred to they refer to our letter dated June 20, 2013 .

Notes to Financial Statements (Unaudited)

Note 12 – Income Taxes, page 23

1. We note your response to prior comment 1.  Tell us whether your foreign income before
taxes is earned in equal proportion  from each of the jurisdictions disclosed.  In  this
regard, consider adding disclosure that would indicate the magnitude of earnings
generated from each jurisdiction, such as the amount of revenue attributable to  each.

Frank Brod
Microsoft Corporation
July 18 , 2013
Page 2

 Management’s Discussion and Analysis of Financial Condition and Results of Ope rations

Overview, page 31

2. In response to prior comment 2, you indicate that you provide both on premise software
and cloud -based offerings through the same agreement.  Clarify whether you are
accounting for the two offering s as a single multiple -element arrangement or as separate
arrangements. While we note from your response that, in future filings, you will include
the specific revenue recognition policy for cloud -based services, tell us how your revenue
recognition policy addresses your multiple -elemen t arrangements, including the
disclosures in ASC 605 -25-50.  Specifically, you should disclose the nature of and
significant deliverables within your multiple -deliverable arrangements, the separate units
of accounting, the general timing of delivery or per formance of service for the
deliverables within the arrangements, and the significant factors, inputs, assumptions, and
methods used to determine selling price for each significant deliverable within these
types of arrangements.  In addition, you should cl arify the timing of revenue recognition
for your cloud -based services accounted for as subscriptions.  Provide us with any
proposed changes to your revenue recogn ition policy in future filings.

Results of Operations, page 33

3. We note your response to prior comment 4.  Please clarify in greater detail what
consideration you gave to providing an analysis in future filings that discusses why you
were able to increase revenue in the Windows Division while the x86 PC market has
declined significantly.  We note that you state that you began to be “less correlated to the
x86 PC market.”  You should disclose the extent that your revenue continues to be
depend ent on the x86 PC market and disclose the amount of revenue generated from
alternative devices and Surface that reflects the trend of being less correlated to the x86
PC market.  We note from your disclosure on page 35 that 65% of total Windows
Division revenue comes from software pre -installed on OEM equipment, with the
remaining am ount generated by commercial and retail sales of your products and
services.  In discussing the relative importance of the x86 PC market on trends in
revenue, consider separately analyzing the relative amounts of non -OEM revenue in each
period, including a  discussion of how the introduction of new versions of your products
and services, such as Windows 8 and Surface, contributed to your performance compared
to sales of existing products and services, such as Windows 7.

4. We note from your response  to prio r comment 4  that you will quantify Surface revenue in
the MD&A when the revenue becomes material.  As revenue from Surface has been
identified as a factor that explains the change in revenue, you should provide an
indication of its relative significance.  In addition , in regard to the recognition of revenue
that was previously deferred due to upgrade offers, your disclosures in future filings
should clarify whether the revenue relates to the delivery of the deferred product or

Frank Brod
Microsoft Corporation
July 18 , 2013
Page 3

 service or the expiration of t he redemption period in analyzing how this factor is or is not
reflecting a trend.

You may contact Melissa Walsh, Staff Accountant , at (202) 551 -3224  if you have
questions regarding comments on the financial statements and re lated matters.  If you have any
other questions, please contact Matthew Crispino, Staff Attorney, at (202) 551 -3456 .  If you
require further assistance, do not hesitate to contact me at (202) 551 -3488 .

Sincerely,

 /s/ Stephen Krikorian

Stephen Krikorian
Accounting Branch  Chief