Here's a look at major tech stories on Wednesday.

Microsoft gains after beating estimates, reporting strong Office/Azure figures

Software companies love to say that they'll make more money from customers over the long run by migrating them to cloud subscriptions, even though they get paid less up-front and often see lower margins on cloud subscriptions than they do on traditional software sales. Microsoft's (MSFT - Get Report) fiscal fourth-quarter report suggests the company is backing up its talk, at least as far as its cash-cow Office franchise goes.

Thanks to Office 365 subscription growth, Microsoft's Office-related consumer revenue rose 19% annually in the fourth quarter, a sharp improvement from the previous quarter's 3% growth. Business-related Office revenue rose 5%, after being flat in the third quarter. Office 365 commercial seats rose 45% annually, and the Office 365 consumer base rose by 900,000 sequentially to 23.1 million, after having risen by 1.6 million in the prior quarter.

Office wasn't the only strong point in Microsoft's report: Revenue for the Azure cloud platform rose 102% annually (unfortunately, Microsoft doesn't give a specific number), and Microsoft's broader sales of server products and cloud services -- this includes on-premise enterprise software such as Windows Server and SQL Server database software -- rose 5% after being flat in the third quarter. And Enterprise Services revenue grew a healthy 12%.

Also: Weak PC sales are less of a headwind than before. Windows OEM Pro license revenue rose 2% after dropping 11% in the third quarter, Windows volume licensing revenue grew 3% and -- with the help of weak year-ago numbers -- Windows OEM non-Pro revenue jumped 27%.

The phone business, on the other hand, saw a 71% sales drop, as Microsoft continues paring back its mobile investments. And gaming revenue fell 9% thanks to Xbox One volume declines and price cuts. But Surface revenue rose 9%, monthly active users for Xbox Live (a somewhat-overlooked Microsoft cloud business) grew 33% to 49 million and search ad revenue rose 16%.

Looking at Microsoft's bottom line, job cuts clearly provided a boost: Operating expenses rose only 1% annually. Microsoft also benefited from a low 15% tax rate (not likely to last), and $3.7 billion worth of stock buybacks. Both job cuts and cloud growth helped free cash flow rise 15% to $5.8 billion

On its earnings call, Microsoft guided for its three reporting segments to collectively see fiscal first-quarter revenue of $21.2 billion to $21.9 billion, below a $22.1 billion consensus. However, the company has a history of guiding conservatively, and the only segment with weak guidance is the More Personal Computing unit, which is about to see its feature phone revenue drop to zero thanks to the pending sale of the business to Foxconn and Finland's HMD Global.

Though still seeing headwinds in a few different places, Microsoft's latest numbers give more reasons to think its cloud efforts leave the company well-positioned to deliver healthy (if unspectacular) growth in the coming years. They also give reasons to be optimistic management can handle a challenge as difficult as fully integrating LinkedIn (LNKD) , after its $26.2 billion purchase of the professional social network closes.

Microsoft shares gained in after-hours trading Tuesday and were up 5.8% in pre-market trading on Wednesday to $56.17. 

Facebook pays Vine and YouTube stars to use Live

It was already well-known that Facebook  (FB - Get Report) is paying media firms and celebrities large sums to use its Live video-streaming platform: The Wall Street Journal reported in June Facebook has committed to paying over $50 million to the likes of Buzzfeed, Vox Media, Kevin Hart and Russell Wilson, with 17 contracts valued at more than $1 million. Now, the paper says Facebook has committed $2.2 million to "nearly two dozen YouTube creators, Vine stars and internet personalities" to get them to use Live.

Facebook insists it isn't trying to lure away Vine and YouTube stars, but rather wants to "encourage experimentation" on Live, whose videos tend to see higher engagement rates than standard Facebook videos. As the Journal observes, there are parallels with the payments YouTube once made to get professional content creators to set up YouTube channels (that worked out pretty well).

In spite of the head-start possessed by Twitter's Periscope, it increasingly feels as if Facebook, aided by a much larger user base and aggressive efforts to promote Live on its site and apps, has taken the pole position in live streaming. The interactive map Facebook provides to show the Live streams that happen to be going on at any moment helps drive this home. YouTube, which has a giant user base of its own and is gradually rolling out its live streaming platform to users, remains a potential threat, but will be facing an uphill battle.

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Private equity firm Thoma Bravo is .8

Six weeks after Reuters reported F5 Networks (FFIV - Get Report)  has received takeover interest and had hired Goldman in response, the New York Post reports Thoma Bravo "is taking strong interest" in buying the company. Thoma Bravo has been one of the PE firms behind a spate of M&A activity involving mid-sized enterprise tech companies; its recent deals include the $3 billion purchase of business intelligence/analytics software firm Qlik Technologies.

F5, the top provider of application delivery controllers that manage the flow of traffic to and from Web servers, is just four days removed from seeing vague M&A chatter circulate among traders. It looks like those rumors weren't merely smoke. The company's fiscal third-quarter report arrives on Wednesday afternoon.