Microsoft online ad revenue jumps by $100M in Q4

Share this article:

Microsoft Corp.'s revenue from search and display advertising spiked by 20%, an increase of $100 million, to $597 million in its fiscal fourth quarter. Online advertising revenue in Microsoft's 2011 fiscal year, which ended June 30, grew by 19% year-over-year to $2.3 billion.

Advertising generated 90% of the $662 million in fourth-quarter revenue for Microsoft's Online Services Division, which includes its Bing search engine, MSN, adCenter and advertiser tools. For the fiscal year, advertising accounted for 92% of the division's $2.5 billion in revenue.

Search primarily drove the growth in online ad revenue, the company said in an earnings statement. Because of Microsoft's partnership with Yahoo that requires the Redmond, Wash.-based company to provide search technology for Yahoo sites, Microsoft receives 12% of Yahoo's net revenue from pay-per-click ads. Yahoo paid Microsoft $36 million for the quarter, and has paid the company $104 million since the agreement took effect in Microsoft's second quarter, per the revenue sharing agreement.

The deal also stipulates that Microsoft must reimburse Yahoo for costs throughout the partnership's transition period. During the second quarter, Microsoft reimbursed Yahoo $55 million for search operating costs and $12 million for transition costs.

Microsoft earned $17.4 billion in overall revenue in the quarter, an 8% increase year-over-year. The company's full-year revenue grew 12% compared with the prior fiscal year to $69.9 billion. Net income leaped 30% to $5.9 billion in the period and 23% to $23.1 billion for the year.

Share this article:

Follow us on Twitter @dmnews

Latest Jobs:

Featured Listings

More in Digital Marketing

News Byte: CX Scores to Take Their Place Beside Price Listings

News Byte: CX Scores to Take Their Place ...

E-commerce aggregator PriceGrabber will begin offsetting price info with service expectations.

Data Byte: Interactive Ad Revenues Exceeding TV for the First Time

Data Byte: Interactive Ad Revenues Exceeding TV for ...

At nearly $43 billion, interactive advertising revenues exceeded broadcast for the first time in 2013.

Marketers: Data Rich and Knowledge Poor

Marketers: Data Rich and Knowledge Poor

While advertisers have become incredibly data-savvy, the most difficult challenge remains causally linking that data to outcomes that really matter.