In the first quarter results of fiscal year 2018, which ended September 30, 2017, Microsoft reported search advertising revenue grew by 15 percent year over year, excluding traffic acquisition cost.
This ump in revenue is a bit surprising, as the last four quarters were pretty stagnant. Last quarter, Amy Hood, Microsoft’s CFO, said the total search revenue growth would slow with the renegotiated Yahoo deal and associated change in revenue recognition having passed the one-year mark.
Just like it did before, Microsoft cited “increased revenue per search ad search volume” or the revenue growth.
LinkedIn had generated $1.1 billion in revenue for the quarter, with sessions up more than 20 percent year over year. These metrics are on par with the previous quarter. LinkedIn was acquired by Microsoft in December 2016 for $27 billion, almost all of that was in cash. In September, Rik van der Kooi, Corporate VP of Microsoft Search Advertising, said that the company has begun work on 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. Not only is there intention on building LinkedIn business, Microsoft has chosen to focus on using the acuisition to grow Office 365 and Dynamics 365 products. Office 365 revenue rose 42 percent over last year.
“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,” Microsoft CEO Satya Nadella told analysts on the earnings call.