Bing fails to boost Microsoft online business where Google reigns.
Microsoft posted strong results for the third quarter of its 2010 fiscal year, largely thanks to sales of Windows 7. But the company continues to suffer heavy losses in its Online Services Division as it tries to match rival Google in the online search and advertising market.
During Microsoft's fiscal third quarter, which ended March 31, the Online Services Division, or OSD, reported a 12 percent increase in revenue, which rose to $566 million on the back of higher advertising revenue. That wasn't enough to offset a surge in operating expenses during the period. The division's quarterly loss grew by 73 percent to $713 million, compared to a loss of $411 million during the same period last year.
OSD includes Microsoft's online advertising business, the Bing search engine, and its various MSN websites.
In a discussion of OSD's results
, Microsoft blamed the increase in operating expenses on several factors. It said sales and general administration expenses increased by $145 million, largely due to "transition expenses" from the search deal struck with Yahoo, which handles some advertising sales for Microsoft while Microsoft provides for Yahoo's Web sites.