Alphabet and Fb are rising as Microsoft advert items carry out higher than predicted
Satya Nadella, CEO of Microsoft, speaks during Microsoft’s annual general meeting on November 29, 2017 in Bellevue, Washington. / AFP PHOTO / Jason Redmond (Photo credit should be JASON REDMOND / AFP via Getty Images)
JASON REDMOND | AFP | Getty Images
Stocks of Alphabet, Facebook, and other internet ad-funded companies rose in expanded trading on Tuesday after Microsoft’s earnings report showed the advertising business was doing better than expected.
The result for two parts of Microsoft, reflecting the activity of advertisers, could indicate an improvement in global economic conditions as the coronavirus pandemic responds to widespread vaccination programs.
According to Microsoft, LinkedIn’s social network, whose Marketing Solutions division generates revenue from ads, had revenue of $ 2.58 billion in the December quarter, an annual increase of 23%. Microsoft had previously announced that growth would roughly match that of the previous quarter, which was 15.6%.
“LinkedIn’s advertising business had a record quarter, accounting for more than a third of LinkedIn’s total revenue. LinkedIn’s marketing solutions grew by over 50% as advertisers increasingly turned to the platform as a trusted route to business-ready professionals,” said Satya, CEO from Microsoft Nadella said analysts on a conference call.
Unlike Facebook and Twitter, LinkedIn has largely avoided getting embroiled in political controversy. In addition to advertising, LinkedIn’s revenue comes from premium subscriptions and tools for recruiters and sellers.
Microsoft’s search advertising business, which competes with Alphabet’s Google segment, contributed $ 2.18 billion to revenue in the third quarter, up 1%. In October, Microsoft’s chief financial officer, Amy Hood, forecast a decline in the mid to high single digits (5% to 9%).
Hood also gave guidance for the current quarter.
“Our search and LinkedIn companies should benefit from the improving advertising market,” she said.
In a statement distributed to customers on Friday, Bank of America analysts, who have a buy rating for Microsoft shares, had estimated unchanged sales for the search business and an 11% growth for LinkedIn.
In off-hours trading, Alphabet grew nearly 1%, Facebook 1%, Snap 1%, and Twitter nearly 3%. Microsoft rose nearly 4% according to the earnings report, reflecting strong growth in the company’s cloud computing business.
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