Microsoft Ad Revenues Up 23%

Microsoft reported its Q3 earnings yesterday, announcing overall revenue of $14.4 billion, up 32-percent year-to-year. Net income of $4.93 billion, a 65-percent increase over the previous year's quarter.

Revenue from its online services business, which includes its Live Search and MSN businesses, rose 11 percent year-to-year to $623 million. It also saw an operating income loss of $200 million, compared to a $24 million loss the year before.

During a conference call with investors (Transcript available from SeekingAlpha.com), investor relations manager Colleen Healy said advertising revenue grew by 23 percent, and the company is actually ahead of last year's monetization goals for adCenter.

"We are now monetizing more effectively in the U.S. on our own adCenter platform than we had under third-party Overture at this time last year. Our display growth was in line with what is a healthy market, driven by an increase in page views," Healy said.

Search revenue benefited from a higher number of search queries, and increased revenue per search on both a year on year and consequential basis, she said.

According to CFO Chris Liddell, Microsoft is happy with the growth it's seeing in display ads and the relevancy of its search product, though it's not happy with its market share. It also plans to continue to invest in these areas.

About the author

Kevin Newcomb joined ClickZ in August 2004, covering search marketing and other online marketing topics. He has been reporting on web-based businesses since 2000.

Before the bubble burst, Kevin was a marketing manager for an online computer reseller, handling copywriting, e-mail marketing, search marketing and running the affiliate program.

With a combination of real-world marketing experience and years of business journalism, Kevin brings to ClickZ a unique ability to deliver news and training materials that help online marketers do their jobs better.