Microsoft Corporation on Thursday said its price cut for the Windows 7 operating system will deferre its revenue by 50 percent from eligible sales compared to its predecessor as it vies to revive its flagship product.

It will defer an estimated $200 to $300 million of revenue for the fiscal 2009 fourth quarter. However its cash flow will remain in line with Windows Vista Technology Guarantee program deferral revenue in 2007.

The Windows 7 computer operating system slashed 17 percent off Win7 retail prices to $40 less than its Windows Vista Home Premium. The units will go on sale starting June 26 and upgrades will be available until January 31, 2010.

Its Windows 7 Professional upgrade will cost $199.99 and the full system will be $299.99. For Windows 7 Ultimate, the upgrade version will retail for $219.99 and the full version will set you back $319.99.

In 2007, the company reported record third-quarter profit increases of 65 percent in part by deferred revenue from a Windows Vista upgrade program. ,Year over year net income came to $4.9 billion, driven by $14.4 billion in sales and a quarter's sales included $1.67 billion in deferred revenue from the redemption of upgrade coupons Microsoft handed out before Vista's launch.

Shares of Microsoft rose 25 cent to 1.07% at $23.72 in the regular trading.