Microsoft’s revenue from online advertising has fallen 5% from 2008 despite the growing strength of the company’s new search engine, Bing.
Discussing the company’s second fiscal quarter, Microsoft executives praised Bing and the launch of Window 7 for strong performance over 2009. However, they were less than satisfied with the performance of the Online Services division.
Despite Bing’s rapid growth in search engine marketing over the past six months, the $581 million in revenue from the online services division represents a 5% decline over the course of a year. According to ClickZ news, it was one of the few areas where the software giant didn’t see strong performance in its second fiscal quarter.
The company’s new CFO, Peter Klein said that he expected this decline to reverse over the next year. “The outlook for online advertising appears to be improving” he said. “We expect revenue to be roughly in line with the market for the third quarter and the full year”
Microsoft’s General Manager of Investor Relations, Bill Koefeod, said that the company’s performance in overseas markets had delivered a negative impact on sales of PPC display advertising but search engine marketing revenue had performed well.
“Whilst search revenue grew” said Koefeod “display revenue was hampered primarily by international rate declines”.
Koefeod was less than revealing about the prospect for search over the next fiscal quarter. Whilst speculation is rife about the pending partnership between Yahoo and Bing, it was only mentioned briefly. He limited himself to saying: “Regarding our Yahoo partnership, we are still working through the regulatory review process and continue to be hopeful the deal will be approved early this year”.
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