Software lock-in helps double Microsoft profits

Software giant Microsoft has bucked the trend in the battered technology sector by reporting a doubling of profits from a year ago.

Underlining its superior performance in the hi-tech industry, the world's largest computer company said profits for the July to September period came in at $2.7bn (£1.7bn), beating analysts' forecasts by 8%.

This was more than double the $1.2bn in profits for the same period last year. Results were boosted by a new licensing program that locks customers into multi-year agreements for updating software.

Steve Ballmer, Microsoft's chief executive, has expressed regret for upsetting customers with the tactic, but it nevertheless helped the company sell more software than ever before during the severe hi-tech downturn.

Microsoft's strong results contrast with those of its competitors. Earlier in the week, for example, Intel, the world's largest chip maker reported worse than expected results. But Microsoft warned investors the quarter was an anomaly and such dramatic growth is not likely to happen again soon.

Microsoft this week overtook General Electric, the conglomerate, as the world's most valuable company by stock market value.