by

Laurie Sullivan , Staff Writer @lauriesullivan, February 1, 2018

Advertising on Microsoft properties such as Bing, LinkedIn and its network of partner sites and devices rose in 2017, according to the company’s 10-Q filing with the U.S. Securities and Exchange Commission.

Microsoft reported that revenue from search advertising rose 15% to $1.8 billion for 2017, up from $1.6 billion the prior year, primarily driven by higher revenue per search and search volume.

Microsoft CEO Satya Nadella said on the earnings call with investors Wednesday that the company clearly sees innovation initially in the U.S., followed by other countries. He expects to see experimentation in artificial intelligence, welcomes a variety of digital assistants on Microsoft platforms and believes that Cortana should work on Amazon Echo and other devices.

Overall, revenue increased $3.1 billion or 12% in the final quarter of the year ended Dec. 31, 2017, driven by growth across each of the company’s segments.

Productivity and Business Processes revenue rose, driven by LinkedIn and higher revenue from Office. Intelligent Cloud revenue increased, primarily due to higher revenue from server products and cloud services. LinkedIn contributed revenue of $1.3 billion.

Personal computing revenue increased. Revenue rose $281 million or 2%, primarily due to higher revenue from gaming and search advertising, offset in part by lower revenue from phones.

Revenue from its cloud business — which primarily comprises Office 365 commercial, Azure, Dynamics 365, and other cloud properties — was $5.3 billion and $10.4 billion for the three and six months ended December 31, 2017, respectively, and $3.4 billion and $6.6 billion for the three and six months ended December 31, 2016, respectively, according to the filing.

During the final six months in the year, research and development expenses rose about $910 million, primarily due to LinkedIn expenses and investments in cloud engineering.

MediaPost.com: Search Marketing Daily

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