released a powerful new Web search engine and the MSN Search Toolbar with Windows Desktop Search. We launched MSN Music, which provides an easy way for consumers to find and download music online, and we launched MSN Spaces, a blog hosting service that attracted more than 18 million spaces within its first six months. 

 

In our Home and Entertainment business, cumulative shipments of the Xbox® video game system reached 22 million, and the Xbox Live® online game service doubled its subscriber base to 2 million. The popular Halo® 2 game, released in November 2004, generated $125 million in North American sales in one day, making its launch one of the largest in entertainment history. 

 

Many other important products were launched by our Client, Information Worker, and Microsoft Business Solutions businesses: 64-bit editions of Windows XP Professional and Windows Server 2003; new versions of Windows XP for Media Centers and Tablet PCs; Office Live Communications Server 2005 and Office Communicator 2005; Office Live Meeting 2005; Office Outlook® Live; and the Microsoft Business Solutions-Navision® 4.0 software suite for small and mid-sized businesses. 

 

Among business customers, our work to deliver greater business value through our software has brought wider recognition of the advantages of Microsoft technologies. In the past year, research reports from more than a dozen independent analyst firms concluded that the Windows Server System is superior to Linux in many important ways. 

Multiple studies found that Windows has lower total cost of ownership, is more secure and reliable, and includes the industry’s most comprehensive customer indemnification protection. As a result, many enterprises are choosing Windows over other alternatives, or returning to Windows after trying Linux. 

 

Growing Microsoft Through Innovation 

 

In the years ahead, we believe that Microsoft will continue to succeed through innovation that enhances customers’ digital experiences at work, at home and on the go. We believe we are innovating across a broader spectrum of software technologies than any other company. We develop software for platforms and tools; communication and collaboration; information access and organization; entertainment; business and e-commerce; and devices. Through the synergies of these broad innovations, we are intent on accelerating Microsoft’s growth in three principal ways. 

 

Growing our foundation businesses.     In our largest businesses today—the Windows Client, Information Worker, and Server and Tools groups—growth will be driven by hardware shipments and product upgrade cycles, accelerated by our forthcoming innovations such as Windows Vista and the new version of Office. Given the new technologies we will be delivering, we anticipate growth through increased share of growing segments. In servers, for example, we have opportunities to increase our share in Web servers, datacenters, mail servers, and high-performance computing. 

 

In addition, we see opportunities to grow these businesses through reducing revenue lost to software piracy. We recently launched Windows Genuine Advantage, an initiative to enhance the benefits