Microsoft FY23 Q1: LinkedIn up 17%, search and news revenue up 11%

Exceeding analyst expectations, LinkedIn revenue grew 17% and search and news advertising revenues grew 16%. LinkedIn growth is thanks to strength in the talent solutions side of the business. Microsoft CEO Satya Nadella says there are now more than 150 million subscriptions to newsletters on LinkedIn.

Gaining an Edge. The search and advertising bump was “driven by higher search volume and Xandr.” Nadella says Microsoft has “expanded the geographies we serve by nearly 4x over the past year.” Microsoft Edge may also be helping out with Bing search and advertising revenues. “Edge is the fastest growing browser on Windows and continues to gain share as people use built-in coupon and price comparison features to save money,” says Nadella.

LinkedIn Marketing Solution continues to provide leading innovation and ROI in B2B digital advertising. More broadly, with Microsoft Advertising, we offer a trusted platform for any marketeer or advertiser looking to innovate. We’ve expanded our geographies we serve by nearly 4x over the past year. We are seeing record daily usage of Edge, Start and Bing driven by Windows. Edge is the fastest-growing browser on Windows and continues to gain share as people use built-in coupon price comparison features to save money, Nadella said.

Not so fast – growth. Microsoft CFO Amy Hood told analysts during the earnings call that “reductions in customer advertising spend, which also weakened later in the quarter, impacted search in advertising and LinkedIn marketing solutions.”

Post-pandemic gaming. Xbox content services fell by 3% as Microsoft cites the lack of engagement hours and monetization from 1st party content, all of which was offset by the growth of Xbox Game Pass. It’s possible that post-pandemic, people are no longer sitting at home playing video games, but instead traveling and vacationing.

Overall revenue. Microsoft’s overall revenue came in at $50.1 billion, an increase of 11% YoY.

What’s next. Next month Netflix begins rolling out its paid ad tier with technology and sales supported by Microsoft.

Why we care. Advertisers may have also noticed that Google’s earnings weren’t quite up to par. It’s FY23 Q1 for Microsoft and these numbers aren’t as great as any of us had hoped, but many of us likely expected. There are some new developments on the horizon for Microsoft, though.

Netflix’s new ad tier, plus the acquisition of Activision Blizzard could breathe new life into the search platform.

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About The Author

Nicole Farley is an editor for Search Engine Land covering all things PPC. In addition to being a Marine Corps veteran, she has an extensive background in digital marketing, an MBA and a penchant for true crime, podcasts, travel, and snacks.

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