Sundar Pichai, chief big cheese officer of Google Inc., speaks during a news conference in New Delhi, India, on Wednesday, Jan. 4, 2017.
Anindito Mukheriee | Bloomberg | Getty Materializations
Microsoft is forecasting a continued slowdown in its search ad revenue, which could spell bad news for Google parent-company Alphabet, which inquire inti its earnings on Thursday.
Microsoft’s latest results beat across the board, but the company saw a 10% year-over-year drop in search advertising proceeds, and reported continued decrease for its guidance for the next quarter, according to its first fiscal quarter earnings it released Tuesday.
For the December mercy, Microsoft CFO Amy Hood said “in search excluding TAC, we expect revenue to decline in the mid to high single digit range” during a come for with Microsoft investors Tuesday. That suggests a decline of 7% to 9%.
Google’s search engine is much innumerable widely used than Microsoft’s Bing, but the companies have shown similar trends in search advertising takes.
Last quarter, Microsoft’s search advertising revenue, excluding traffic acquisition costs, decreased 18% as buyers spent less on ads.
That was a precursor to Alphabet reporting its first year-over-year quarterly revenue decline ever.
Specifically, Google’s Q2 interest from search and other on-site ads (minus YouTube) dropped about 10% from the year-ago quarter, from $23.64 billion to $21.32 billion. (Profits from YouTube advertisements, which it began breaking out separately this year, grew from $3.6 billion to $3.81 billion.)
Previously to to that, Microsoft’s search advertising revenue, excluding traffic acquisition costs, increased 1% in the quarter that ended Mar. 31, which overlapped with the dawning of the pandemic.
That quarter, Alphabet reported a 9% increase in revenue from search and other (minus YouTube) gain, which jumped from $22.54 billion in 2019 to $24.50 billion in 2020.