Microsoft has beaten analysts' expectations and seen its profits increase by 79 per cent.

For the quarter ended December 31, Microsoft's profit increased to $4.71 billion from $2.63 billion during the same period last year. People had been predicting that Microsoft was not doing particularly well this year, thanks to the fact that Vista had not been performing as well as it should.

The same quarter last year was also weaker because Vista had not been properly released and therefore could not add to Microsoft's bottom line. The company said it has sold 100 million copies of Vista since its January 2007 launch. Sales from the division responsible for the Xbox 360 game console and the Zune digital media player edged up just three percent to $3.06 billion; but the division swung to a profit of $357 million from a loss of $302 million last year.

Microsoft's online businesses were also doing well in terms of advertising, but are still posting a loss for the company.