Microsoft earned $4.3 billion on revenues of $15.84 billion, up 18%, in its fourth fiscal quarter in June, making it a $60 billion company – compliments of emerging markets and demand for Windows Server 2008.

It had better-than-expected Vista sales this time through, up to $4.37 billion, and solid results everywhere but in retail sales of the high-end Office kit – a function of all those freebies out there? –and in its online business which lost $488 million – impacted by the weak economy and explaining why Microsoft is desperate to buy Yahoo, AOL, somebody. Yahoo, meanwhile, has also been eying AOL.

Anyway, Wall Street was disappointed with its Q4 earnings, off a penny, and with its Q1 guidance of 47 cents-48 cents on revenues of $14.7 billion-$14.9 billion when it wanted 49 cents on $15.06 billion and for the year Microsoft said it could do $2.12-$2.18 on $67.3 billion-$68.1 billion when the punters were sure it could do $2.16 on $66.9 billion-$68 billion. The problem in all cases is the earnings.

It’s also going to spending hundreds of millions to buy share from Google, which had its own problems Thursday when it reported a lower-than-expected 35% rise in earnings, coming in 11 cents short, and its stock fell below $500. Google claimed it was having problems managing its cash – (now that’s a problem to have). Its revenues were up 39% to $5.37 billion but paid clicks grew only 1% sequentially.

Anyway Microsoft, which admitted to a “tough” economic environment, though it’s been relatively unaffected so far, figures the rest of the year is going to go like the June quarter; things might get better in the first half.