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Intl: Yahoo, Microsoft see revenue lift; Google punished
Online advertising is surging again, and so is display advertising. That's the takeaway from earnings reports from three big online players Yahoo, Microsoft and Google. Surprisingly it was Yahoo that led the pack with a profit that nearly tripled to $310 million, or 22 cents per share, beating analyst estimates of just 9 cents per share. And Yahoo increased profits while its gross revenues were fairly flat, up just 1% from the year-ago quarter. One big boost came from rival Microsoft, which paid Yahoo $78 million for their search partnership. And yes, display ad revenues were up big, rising 24% in the quarter. Similarly, Microsoft saw an increase of 19% in its online ad revenues but that growth came from a boost in search-related ads on Bing. PaidContent noted that Microsoft's online division might have gained in ad revenues, but losses also grew to $713 million (up from $466 million lost in the year-ago quarter), thanks to higher headcount and the search deal with Yahoo.
Meanwhile, Google had what looked like a blowout quarter: Profits rose 37% to $1.96 billion, revenues were up 23%... but Google's stock *dropped* 4.6%. What gives? Analysts had expected even more from Google given the market's upswing, with "whisper number" expectations 15 cents higher per share than Google reported. "It wasn't a knock-your-socks-off quarter," analyst Ben Schachter told Bloomberg. "The market had been doing better and people expected better." A couple areas where Google fell short were in sales of the Nexus One phone, and in rising costs from hiring 800 new employees. Plus, Wall Street was still skeptical of Google's move to stop censoring its website in China. But on the good side of the ledger, Google is getting more big brand advertisers to open their wallets for display ads, ClickZ reported. "Large advertisers have come back," Google CFO Patrick Pichette said.
Source: online-publishers.org
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