Microsoft looks set to plunge into a quarterly loss after hitting the company balance sheet with a $6.2 billion charge for writing down the value of its aQuantive online advertising service to almost zero. Prior to this announcement Microsoft was widely predicted by analysts to report a profit of about $5.3 billion during the fourth quarter period.

The software giant purchased the company for $6.3 billion in cash five years ago in the hope of catching up with rival Google in the online search-related advertising space. At the time it became the firm's most expensive purchase, until the record $8.5 billion acquisition of the highly popular internet phone service Skype last year.

"This is an accounting decision that the company made based on how the business is performing relative to the projections we had made during the past five years," Microsoft CEO Steve Ballmer and online unit President Qi Lu, wrote in an e-mail to employees obtained by Bloomberg. The pair also made it clear that Microsoft remains strongly committed to making the online division financially successful and strong.

They have had some success with their search engine Bing, which has seen improvements in revenue per search as well as market share gains. Despite this, "online services [are] the biggest drag on the company right now," according to Colin Gillis, an analyst with BGC Partners in New York. "It's the classic come-from-behind, slow, incremental improvement. [...] Bing has made incremental gains."

According to eMarketer, Bing is forecasted to remain at 7% market share, the same as last years' figures for US search ad revenues. Google is expected to take 77.9%, a 3.5% increase on last year's results.

Despite the disappointing news stock prices in the Redmond-based software house remained mostly unchanged at $30.56. So far this year shares in the firm have climbed 18%.