Microsoft’s advertising business posted lackluster growth in the first quarter of 2023.
Advertising and search revenue increased 3.4% to just over $3 billion during the period, including traffic acquisition costs that Microsoft pays to publishers. The company attributed the increase to higher search volume and its acquisition of Xandr, an ad-buying platform it acquired from AT&T.
LinkedIn revenue was up 7.6%. Microsoft attributed the increase to its Talent Solutions products. The company also said the number of sessions logged on LinkedIn grew 15%.
Why we care. There was no reason not to take Microsoft at its word that advertising spending was slowing when it issued earnings last quarter. The company predicted low single-digit growth, and delivered.
The pace of growth is confirmation – as if more were needed – that demand for advertising is slumping. And those expecting a significant bump in revenue from the release of the new Bing were over their ski tips.
