Ad revenue up 20% for MSN

Growth in display advertising helped push MSN over the $460 million mark in Q4, 2006. Q4 saw an increase of $77 million (20%) from display advertising over Q4 2005.

by Kristina Knight

According to Nielsen//Netratings AdRelevance report, email sites accounted for nearly half of all display ads in November 2006 and 51% of display ads in October. Yahoo email platform users saw the most display ads (36.4%), while MSN's Hotmail ranked second with 6.4% of display ads.

The news isn't all good. According to Chris Liddell, Microsoft CFO (via MediaPost), MSN's search share dropped. "We lost market share during the quarter--we're clearly not happy with that...(but) we continue to take a long-term view on this business."

Data from comScore indicates that MSN accounted for only about 10% of searches in December 2006. That is down 3% from the beginning of 2006. Meanwhile, giants Google and Yahoo continued to dominate search. Google accounted for roughly 47% of searches and Yahoo accounted for 28%.

As a whole, Microsoft lost about $155 million in Q4, 2006. During the same period in 2005 the company posted a gain of about $58 million. However, with the upgrade to Windows Live, MSN is hoping to rebound in the coming year.