Like Google and Yahoo, Microsoft expresses hope that the worst of the economic crisis is behind it.
Like Google and Yahoo before them, Microsoft believes the worst of the economic crisis is behind it.
In reporting strong earnings today, Microsoft said its Online Services division showed some positive signs during the quarter. Those signs include a growth in page views and a slowing in the decline of advertising rates, according to Bill Koefoed, Microsoft's GM of investor relations.
The company hailed developments in search, citing market share growth in each month. Third party reports also show that Bing is gaining ground, and two agencies, SearchIgnite and Efficient Frontier, reported sequential increases in their clients' search spending overall, and in spending on Bing in particular.
Microsoft still expects the proposed dealwith Yahoo, announced in July, will close early in 2010, according to CFO Chris Liddell. Once it does, Microsoft is planning for $100 million to $200 million in integration costs for the year, with no revenue contributions at least through Microsoft's fiscal year, which ends in July. In the future, revenue from the deal could be in the "hundreds of millions" range, though Liddell declined to give specific guidance.
The online services division brought in $490 million in revenue, down 5.8 percent from $520 million in last year's first quarter and down 9.3 percent from the previous quarter's $540 million. Liddell online ad revenue specifically declined by 3 percent, while U.S. search revenue was up "mid-single digits" quarter-to-quarter.
Microsoft's overall revenue and net income were down year-over-year, but not as much as analysts had expected.
According to Liddell, the quarter that ended on September 30 could represent "the bottom of the economic reset." That sentiment has been put forth by both Google and Yahoo in the past week, as they also announced earnings that were more positive than anticipated.
Revenue was mainly driven by demand for Microsoft's Windows 7, which launched this week, and its Xbox gaming console, Liddell said. The company also cut costs considerably during the quarter, lowering its operating expenses by 6.9 percent across the board.
Join the Industry's Leading eCommerce & Direct Marketing Experts in Chicago
ClickZ Live Chicago (Nov 3-6) will deliver over 50 sessions across 4 days and 10 individual tracks, including Data-Driven Marketing, Social, Mobile, Display, Search and Email. Check out the full agenda and register by Friday, Oct 3 to take advantage of Early Bird Rates!
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.
IBM Social Analytics: The Science Behind Social Media Marketing
80% of internet users say they prefer to connect with brands via Facebook. 65% of social media users say they use it to learn more about brands, products and services. Learn about how to find more about customers' attitudes, preferences and buying habits from what they say on social media channels.
The Multiplier Effect of Integrating Search & Social Advertising
Latest research reveals 68% higher revenue per conversion for marketers who integrate their search & social advertising. In addition to the research results, this whitepaper also outlines 5 strategies and 15 tactics you can use to better integrate your search and social campaigns.
September 17, 2014
September 23, 2014
September 30, 2014
1:00pm ET/10:00am PT