Blog Post

Earnings: MSN Revenues Dips, Ad Rev Up

MSN took an expected hit from the pullback in Internet Access, contributing to a 5-percent dip in revenue year over year, $564 million down from $591 million in 3Q04. Advertising revenue was up $14 million or 4 percent while subscriptions and transactions grew 129 percent. Operating income slipped slightly to $100 million from $101 million.
From the 10Q:
— Various restructurings, including a revamped advertising program, were an expected drain offset in part by ad revenue.
Revenue for the first three quarters increased due to a $120 million or 14 percent increase in ad revenue and $73 million or 126 percent increase in subscriptions and transactions revenue. By my estimate, MSN took in roughly $857 million in ad revenues for that first nine months; $350 millio for the third quarter.
— At the end of the first nine months FY95, MSN had approximately 400 million monthly unique users, 200 million active Hotmail accounts, and 165 million active IM accounts.
— “MSN expects advertising revenue and revenue from subscriptions and transactions for Premium Web services to continue to grow for the remainder of fiscal 2005.”
For an overview of Microsoft’s 3Q05 earnings: MKTW, TheStreet, WSJ (sub.req.). Webcast.