Microsoft Thursday announced it has topped $60 billion in yearly revenue for the first time in its history and posted a 25% year-over-year gain in net income for its fiscal year 2008.

The company also provided financial details of its offer to buy Yahoo's search business including a lump payment of $1 billion, a stock investment and on-going revenue sharing. (Read Editor Julie Bort's take on the revenue report.)

The fiscal 2008 revenue gain was an 18% increase over fiscal 2007, but it was with net income where the software giant showed a big increase from $14 billion in 2007 to $17.6 billion in 2008.

Microsoft also reported fiscal fourth quarter revenue of $15.84 billion, which was an 18% increase over the fourth quarter of 2007.

Microsoft's fiscal year runs July 1 to June 30.

Chris Liddel, Microsoft's CFO, also took time to make a statement on Microsoft's proposal to acquire Yahoo's search business. He said he would not take questions, but he did lay out some of the particulars of the offer, including paying Yahoo $1 billion for its search business, and making an equity investment in Yahoo by purchasing 3.9 billion shares of Yahoo stock at $19.50 per share.

He said the proposal also included a 10-year revenue guarantee totaling $19.5 billion to $26.5 billion. Liddel said the guarantees were not conditional on search queries but tied to Yahoo's home page performance. He said the deal did not include changes to Yahoo's governance.

"We continue to believe our proposal is a compelling one," he said.

The company attributed 2008 financial gains to increased demand for Office, server software, Xbox games and consoles, and even Vista, which has been drubbed by the media and found rough sailing on the corporate adoption front.

Microsoft said it has now sold 180 million Vista licenses. It did not report how many of those licenses may have been "downgraded" to XP by corporate users.

Fiscal 2008 was highlighted by shipment of Windows Server 2008 and Visual Studio 2008, two of the infrastructure foundation pieces for its services strategy. SQL Server 2008, the third leg of the strategy, is expected to ship by the end of September (the first quarter of fiscal 2009).

The earnings report showed that the Client, Server and Tools and the Microsoft Business divisions were the only segments that did not show operating income losses for the quarter. For the year, those three divisions and the Entertainment and Devices division were the only ones to post positive operating income results, an indication that Microsoft continues to struggle in its newest businesses while relying on its historical cash cows and a Server and Tools business that has posted 24 straight quarters of double-digit growth.