Revenue at MSN, the Microsoft’s Internet services division that includes the MSN Search engine, was off 3% from last year’s figure, according to Microsoft’s fourth-quarter earnings statement.
Ad revenue for MSN remained flat, CFO Chris Liddell said in an analyst call after the release. Microsoft does not break out MSN ad revenue by category, so it’s not known what proportion of its revenue comes from pay-per-click search ads compared to display advertising on MSN Web sites.
As a company, Microsoft reported revenue of $11.8 billion for the fourth quarter of 2006, 16% more than the same quarter last year. But net income for the quarter fell 24% year-over-year to $2.38 billion.
Microsoft did say that all its search ads in the U.S. are now being served by its own AdCenter platform, rather than in combination with Yahoo! Search Marketing. An AdCenter launch in the U.K. is expected in August. The system already serves MSN ads in France and Singapore.
“It’s not far off that we’re going to have 100% of our business on AdCenter,” Liddell said.
Microsoft will spend $500 million to foster its online services, including expenditures that will drive display advertising and search ads, Liddell said.
Microsoft announced last week that its new Vista browser, slated for sale next year, will not set MSN Search as the default search engine but will allow users to select Google or Yahoo! as their search of choice instead.
