- Xbox hardware and accessories (Xbox software was in Redmond)
- Windows Phone online services
- Microsoft Research Silicon Valley (but that was closed in the first round of layoffs several months after I left)
SVC was originally built for Hotmail and WebTV (remember that?).
Microsoft also had separate offices in Sunnyvale (in the big cluster of relative skyscrapers just south of Moffett Field), which I believe were mostly folks who came from Skype and/or Nokia.
PowerPoint, for all platforms (not just OS X and iOS) is developed at that office too. PowerPoint has actually been in the bay area since it was acquired.
The Web TV stuff was sold to Ericcson a few years ago, and they moved to an office in San Jose at the end of 2015.
I think the Sunnyvale office was mostly teams working on Bing, as well as handful of smaller acquisitions.
They have 4 office buildings and one cafeteria/commons building on that campus - space for around 1500 employees.
It's worth noting that Microsoft's bay area presence is already pretty fragmented, though. They have some more office space a couple exits down 101 in Sunnyvale (not walkable to the MV campus at all), a Skype office in Palo Alto, Yammer in SF, etc. They've also announced plans to renovate and expand the Mountain View campus: http://www.bizjournals.com/sanjose/news/2016/01/21/microsoft...
there are roughly 3000 microsoft folks in the bay area. most are at the mountain view campus next to linkedin and moffett towers across the airstrip. but also a bunch in san francisco (yammer) and palo alto (skype).
Not very big at the moment. They would never relocate from Redmond but a satellite office (from my naive uninformed perspective) isn't out of the question.