Microsoft search revenue grew 15% last quarter, after hovering around 10% previous 4 quarters

LinkedIn sessions increased again by more than 20 percent.

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In its first quarter results of fiscal year 2018, ending September 30, 2017, Microsoft reported search advertising revenue grew by 15 percent year over year, excluding traffic acquisition costs (TAC). Gross revenue from search advertising rose by $210 million, compared to $124 million the previous quarter. The majority of Microsoft’s search advertising revenue comes from its Bing search engine.

The first quarter of the company’s fiscal year 2018 marks the first meaningful increase in revenue growth for Bing Ads since Windows 10 first came on the scene.

The bump is surprising after four stagnant quarters. Last quarter, Microsoft CFO Amy Hood said total search revenue growth would slow with the renegotiated Yahoo deal and associated change in revenue recognition having passed the one-year mark.

As it has for the previous five quarters, Microsoft cited “increased revenue per search and search volume” for the revenue growth.

Microsoft Search Ad Revenue Growth Trend Fy18q1 Extac

LinkedIn generated $1.1 billion in revenue for the quarter, with sessions up more than 20 percent year over year. Both metrics are on par with the previous quarter. Microsoft acquired LinkedIn in December 2016 for $27 billion, nearly all of that in cash. In September, Corporate VP of Microsoft Search Advertising Rik van der Kooi said the company has begun work integrating the LinkedIn Graph with Microsoft’s Audience Intelligence Graph, which includes search history. Advertisers are keen to synthesize LinkedIn’s professional user data with Microsoft’s audience and intent data. In addition to building on LinkedIn’s business, Microsoft is focusing on using the acquisition to grow Office 365 and Dynamics 365 products. Office 365 revenue rose 42 percent over last year.

Microsoft CEO Satya Nadella told analysts on the earnings call, “You’ll see more product integration in fiscal 2018 as we continue to accelerate our innovation to connect the world’s leading professional cloud with the world’s leading professional network.”

Overall, Microsoft reported $6.58 billion in net income, or 84 cents per share, beating analysts’ expectations. That compares to $5.67 billion in profit, or $0.72 per share, the previous year.


Opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.


About the author

Ginny Marvin
Contributor
Ginny Marvin was Third Door Media’s former Editor-in-Chief (October 2018 to December 2020), running the day-to-day editorial operations across all publications and overseeing paid media coverage. Ginny Marvin wrote about paid digital advertising and analytics news and trends for Search Engine Land, MarTech and MarTech Today. With more than 15 years of marketing experience, Ginny has held both in-house and agency management positions. She can be found on Twitter as @ginnymarvin.

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