Microsoft announces earnings tonight. Before the big event, we thought we would remind you about the status of Microsoft’s online business.
Home to MSN, Bing, and the online advertising business, Microsoft’s online services division has lost increasingly large amounts of money for five straight fiscal years stretching back to 2007 (Microsoft’s fiscal year end is June 30). Revenue growth, meanwhile, has been anemic, growing at a compound annual growth rate of 1.2% from 2005 to 2011.
Why keep around a perennial money loser? With AOL and Yahoo both flailing, Microsoft is the only thing standing between Google and total domination of the online ad market.
But Google is coining money. Google’s net income last quarter was more than total revenue generated by the Online Services Division last year.
However, there are some bright spots.
At this point, the only thing likely to stop Google is if Google blows it and gets themselves mired in a prolonged antitrust suit–a story that may sound pretty familiar to Microsoft.
In any event, in Microsoft’s earnings call, it would be nice to see the online business taking at least small steps toward profitability.
Photo: Business Insider Intelligence
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