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Microsoft: Online Sales Jump “Primarily Driven” By Search

About those online losses … no comments on the call, but Microsoft (NSDQ: MSFT) executives did, of course, emphasize the company’s healthy online sales growth, saying that search-ad sales had been primarily responsible for a 19 percent increase in online ad revenue. Ahead, they said, the “outlook for online advertising appears to be improving” and said they expected Microsoft’s online business to “continue to grow faster than the market” next fiscal year. The Yahoo (NSDQ: YHOO) search-ad deal, they said, should begin to contribute to revenue in the second half of the company’s next fiscal year, which begins in June.

Overall, however, Microsoft executives remained cautious in their comments on business spending — a crucial driver of many of the company’s business units. Their language wasn’t as strong as last quarter, when CFO Peter Klein said that enterprise spending had not come back yet and the company didn’t have “visibility” on when it would. But while Klein said Microsoft was “encouraged by a recent uptick” in sales of PCs for businesses and said that Microsoft had seen the “beginning of a recovery among enterprise customers,” he acknowledged that the “business spending environment remains challenged.”