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MSN Tidbits from Microsoft 4Q06 Earnings Call January 26, 2007

Posted by David Card in Media.

Microsoft doesn’t spend a lot of time talking about MSN on its earnings calls, but here’s the gist. Online services revenues — meaning MSN — grew 5% year over year to $624 million. But that’s dragged down by the dial-up access business MSN has been exiting longer than AOL has. Advertising was up a solid 20% year to year, and 24% sequentially, to $462 million, according to financial filings. Microsoft said display was healthy, and paid search grew “modestly,” but actually grew for the first time since MSN dissolved its Yahoo/Overture deal. Microsoft hopes to have revenue per search figures back where they were a year ago by the end of the fiscal year (June).

It lowered its guidance for the year, to growth of 3% to 8%, but said ad revenues should be up “in the mid-teens.” Remember, MSN is already halfway through its fiscal year — that ad outlook is comparable to what Yahoo is looking for, but for the calendar year.

Access lost another 100K subscribers from Q1, for a total of 1.8M. MSN ended this quarter with 8.9 million subscribers to other paid content and services.

For those keeping score, MSN’s 20% advertising growth rate was faster than Yahoo’s 15%, but its revenues are less than half the size. Google and AOL results to come next week.

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