Microsoft Q3 2011 Earnings: Search & Online Up 14% In Revenue But Still Losing Profits

Microsoft announced their 3rd quarter earnings, beating Wall Street expectations. They reported $16.43 billion for the quarter ended March 31, 2011, which was a 13% increase from the same period of the prior year.

The Online Services Division, which is made up of Bing and MSN, had a 14% revenue growth year over year. Microsoft said the 14% growth was “primarily driven by increases in search revenue.” They also said Bing’s US search share increased to 13.9% this quarter. Although profits for that division shrunk even more, with a net loss of $726 million compared to $709 million the previous year. Revenues for that division were $648 million, up from $566 million the previous year.

Online ad revenue grew by 17% year over year, however the revenue per search of the combined Yahoo and Microsoft Bing marketplace was below expectations. Here is a chart showing the revenue by this division:

The largest growth for Microsoft was in the Entertainment & Devices Division which grew 60% year-over-year. The Kinect for Xbox 360 was the primary driver of that growth.

Microsoft’s partner, Yahoo reported earnings last week, they turned out to be a search disaster.

You can read the full release over here:

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Related Topics: Channel: Industry | Microsoft: Business Issues | Top News

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About The Author: is Search Engine Land's News Editor and owns RustyBrick, a NY based web consulting firm. He also runs Search Engine Roundtable, a popular search blog on very advanced SEM topics. Barry's personal blog is named Cartoon Barry and he can be followed on Twitter here. For more background information on Barry, see his full bio over here.

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  • Arjan ter Huurne

    So how much of that growth for Bing was PAID for? As in, distribution deals with pc makers etc? I have a feeling that this huge loss is closely related to those kind of ‘investments’. Can you delve deeper into why M$ is making such a loss quarter after quarter on it’s online division?

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