14 DAY TRIAL // Microsoft is continually experiencing an erosion of its search market share, and the Redmond juggernaut is not happy with the descendant trajectory its search services - the combination between Windows live search and MSN Search - has taken. Even more so in the context in which Microsoft's search showed no signs of revitalization, even with the introduction of Live Search.
To the contrary, Live Search contributed to keeping Microsoft on the downslope of search. The Redmond company has announced record revenues of $12.54 billion for the quarter ended December 31, 2006. However, the fact that Microsoft experienced a growth in image-based ad revenue compared to 2005, offers but little joy.
"Advertising revenue grew 20 percent over the quarter and we're happy with that," stated Chris Liddell, chief financial officer for Microsoft. "On the search side, we lost market share, and we're clearly not happy with that. We continue to take a long term view of this business. We are getting advertisers onto our platform and turning the corner on revenue on a quarter-by-quarter basis. We still expect to get revenue per search channel equal to where we were a year ago, by the end of this year."
In December 2006 - according to a study published by comScore Networks - Microsoft's search share was just 10.5%, while Google's was 47.3% and Yahoo's 28.5. Also, according to Nielsen//NetRatings, Windows Live Search and MSN Search have had a combined year over year growth of -12%.
"We still expect to get revenue per search equal to where we were a year ago by the end of this year. Clearly there is a better story on the display side. We are growing broadly in line with the market...We're comfortable with the progress we're making there," added Liddell, speaking about Microsoft's advertising business.