Microsoft announced fiscal Q4 and full year revenue this afternoon. Growing 8 percent from a year ago Microsoft reported $17.37 billion in topline revenue and $6.17 billion in operating income. Revenues for Online Services, which houses Bing and online advertising, grew 17 percent for the quarter and 15 percent for the full year. However the division lost roughly $2.5 billion for the fiscal year.
Xbox did very well. However consumer PC demand was lukewarm and Windows revenue decreased by 2 percent for the year ended June 30. Overall, the company reported gross revenues of $69.94 billion for the full fiscal year, a 12 percent increase from a year ago.
Online services revenues grew to $662 million but the division posted a $728 million loss for the quarter. Microsoft said the following in its release about search and online advertising:
Search revenue grew due to increased volumes reflecting general market growth, relative share gains in the U.S, and our Yahoo! alliance, offset in part by decreased revenue per search primarily related to challenges associated with optimizing the adCenter platform for the new mix and volume of traffic from the combined Yahoo! and Bing properties. As of June 30, 2011, according to third-party sources, Bing organic U.S. market share grew over 31% to approximately 14%, while Bing-powered U.S. market share, including Yahoo! properties, was approximately 27%.
The company attributed its operating loss to “higher cost of revenue . . . driven by costs associated with the Yahoo! search agreement and increased traffic acquisition costs.” Thus Microsoft points the finger back at Yahoo, just as Yahoo pointed the finger in its release at Microsoft.