Microsoft earnings: Search, LinkedIn advertising revenue rise

The company lumps together search and news advertising revenue and subtracts traffic acquisition costs (TAC), which is money Microsoft pays to Bing Ads network publishers and news partners.

In Q2, Microsoft reported more than $3 billion in revenue from search and news advertising. This was fueled by higher revenue per search for the holiday quarter, according to the company. On the conference call, CEO Satya Nadella noted the company’s total revenue from advertising, including LinkedIn, has surpassed $10 billion over the past 12 months.

Speaking of LinkedIn, it accounted for another $3.5 billion in Q2 revenue for Microsoft.

Overall, Microsoft reported record revenue of $51.7 billion for the quarter ending Dec. 31, 2021.

Why we care. Microsoft said its Q2 advertising revenue growth was better than expected, which is clear evidence of a strong advertising market. Holidays drive up cost-per-click prices for advertisers, and revenue for the ad platforms every year. But clearly, companies continue to invest money in paid search advertising, which is a proven channel to generate results. As for Q3, Microsoft forecasts more growth, but in the “mid- to high-teens” range.