Microsoft, has suffered its first drop in revenue since it went public in 1986 as the global economic downturn savages its once indestructible sales of PC’s.

The company cited weaker personal computer and server markets and said it also took $710 million in charges.

Client revenue (ie Windows for PCs) was worst hit: revenues fell from $4.0bn to $3.4bn, and profits from $3.1bn to $2.5bn.

“While market conditions remained weak during the quarter, I was pleased with the organization’s ability to offset revenue pressures with the swift implementation of cost-savings initiatives,” said Chris Liddell, the chief financial officer for Microsoft.