Microsoft Bing Revenue Rises 12%, Google Mobile Search Leads Alphabet Gains

Microsoft and Alphabet reported fourth-quarter revenue Thursday, with both companies experiencing an uptick from search during the final quarter of 2016. Microsoft cited search in general, whereas Google pointed to mobile search and YouTube as drivers.

For Microsoft, revenue from search advertising rose 12% to $177 million for the three-month period ending December 31, 2016. Search advertising revenue excluding traffic acquisition costs increased 10% -- primarily driven by growth in Bing, due to higher revenue per search and search volume.

The Bing Network now makes up nearly 33% of the U.S. PC search market and is in 36 countries. The network has counted more than 524 million unique searchers worldwide, including 59 million searchers worldwide who are not reached on Google, according to the company.

Microsoft’s services innovation and user engagement on Windows 10 continue to grow, with users asking Cortana -- which is powered by Bing -- more than 18 billion questions to date. 



“Today’s announcement of an 11% rise in constant currency for search advertising revenue reaffirms the confidence we have in our approach to accelerating growth by partnering across the industry, and supports our view that a true and competitive marketplace is thriving in search," stated Steve Sirich, GM, marketing, Bing Ads. 

Alphabet also released earnings Thursday that missed analysts' estimates based on escalating company costs, earning less per click for advertising across its network, although the company touted mobile search and YouTube as the driving factors for positive growth.

The cost per click on Google's properties fell by 16% compared with the year-ago quarter and 11% from the prior quarter. The aggregated CPC fell 15% and 9%, respectively.

Alphabet also reported "Other Bets" revenue of $262 million for the fourth quarter, up from $150 million in the year-ago quarter. 

Revenue from mobile search and YouTube topped expectations, chief financial officer Ruth Porat said in a statement.

Paid clicks on Google properties rose 43% compared with the year-ago quarter, and 23% compared with the third quarter of 2016.

The company posted fourth-quarter revenue of $26.06 billion, or $9.36 earnings per share, adjusted and excluding items.

Operating costs also rose. Google reported that in the three-month period ended December 2016, operating costs rose to $7.8 million, up from $6.7 million in the year-ago quarter.

This is the year that mobile shopping went mainstream as consumers comparison-shopped, purchased goods, and looked for promotions, said Google CEO Sundar Pichai during the earnings call.

An increase in people searching on mobile devices will be good news for Google. Dentsu's marketing agency iProspect estimates that 52.4% of all paid-search traffic came from smartphones in the fourth quarter of 2016, up from 38.5% in 2015. 

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