Microsoft Corporation (NASDAQ:MSFT) first quarter earnings were strong, with revenue of $10.8 billion and net income of $3.48 billion. Everyone is looking forward, and investors don't know quite what to think: at first blush of the earnings release, the stock was down a few cents, and now has recovered in after hours trading to $28.52, up 17 cents from the market close.

Colleen Healy and Chris Liddell have just gotten on the conference call for the usual disclaimers.

2:38 p.m. [all times Pacific]: all results have come in at or above the high end of guidance, says Chris proudly. If you've never heard his voice, it's worth it: he sounds like a proud and very financially-savvy butler. He points out that the company is averaging one acquisition a month -- I don't know if I've even noticed. I'll have to pay more attention.

2:42 p.m. Colleen is giving details on first quarter performance, briefly, "in order to allow more time for your questions." It's all about the questions... She says the company made significant development on "all the products in the pipeline" and points out how the company's 11% revenue growth was driven by well-received new product launches, especially in the previously mentioned Entertainment and Devices division a.k.a. the Xbox 360.

2:45 p.m. Strong performance in the small and medium business divisions. Non-annuity growth was relatively week due to the anticipation (apprehension) of new Vista and SQL server software.

$10.81 billion in revenue. Net income of $3.48 billion, 35 cents a share. Microsoft's quarterly earnings results (it's the company's first fiscal quarter) came in with a bang, a good 11% increase over the year-earlier quarter.

For Microsoft Corporation (NASDAQ:MSFT), this news is sweet indeed. The company has shown strong growth in its Entertainment and Devices division, largely on the back of the Xbox 360 -- 6 million consoles sold!, trumpets the earnings release -- but, as Melly Alazraki mentioned in her preview earlier today, the company's real hopes are set on the upcoming release of Vista. Will it crash our computers? Will it suck? Will it justify the costly investments in R&D?

I'm sure many of these questions will be answered in the analyst conference call, which I'll be liveblogging -- 5:30 Eastern, 2:30 in local Pacific time. The stock was up just a touch to $28.35, and was down again a bit in after-hours to $28.20.

Invesors have grown accustomed to thinking of General Electric as a portfolio of companies -- after all, what do light bulbs, consumer loans, power generators, dishwashers and Nanny McPhee have in common? How much "synergy" can there really be between its divisions?

When own a conglomerate, the test of management iss not just what it does to improve its underlying companies, but whether it can buy and sell them at the right time to make extra money for shareholders. But that trading activity isn't valued as highly by investors as growth that comes from actually improving operations.

Thus, one of the hallmarks of CEO Jeff Immelt's tenure at the company is emphasizing more organic growth. That means the underlying companies are now expected to actually improve their businesses -- not just buy additional companies -- to increase sales.

Immelt started off the conference call a week ago crowing about 9% organic growth in sales achieved in the first quarter. That doesn't sound all that high, until you consider that it is more than twice as high as the company's historic rate. It's also darn good when you take into account that the company had $37.8 billion in revenues last quarter.