We’ll be watching to see if that happens.According to International and national accounting bodies such as the IASC or the FASB, purchased goodwill is considered, in the present, an intangible asset that appears as a result of the acquisition of one company by another, for a price premium. If that’s the case, then theoretically prices should come down, especially for inventory-constrained PPC placements. It may not a canary in the coal mine, but Microsoft’s earnings are yet another indication of a softening in advertising spend. Read the full earnings statement from Microsoft here. That means the equivalent of 25% of those hired in 2022 will be dismissed.ĭig deeper. While devastating for the individuals affected, the company increased its headcount by 40,000 in 2022, adding 40,000 jobs. Microsoft announced it would part with 10,000 employees earlier this month, which is about 5% of its 220,000 workers. When asked specifically about adding ChatGPT to Bing, he talked instead about implementing AI broadly and incorporating ChatGPT into other Microsoft products. Nadella passed on the opportunity to comment on rumors that Microsoft is planning to integrate OpenAI’s ChatGPT features into Bing Search in the upcoming months.
“We fully expect us to sort of incorporate AI in every layer of the stack, whether it’s in productivity, whether it’s in our consumer services,” CEO Sayta Nadella told the analysts. If achieved, it would make Microsoft the sixth-largest digital ad seller worldwide.ĬhatGPT everywhere, but mum about incorporating it in Bing. The company said last fall it plans to increase ad revenue from $10 billion annually to $20 billion over an unspecified period of time. Hood concluded, “LinkedIn and Search will be impacted as ad market spending remains a bit cautious.”ĭespite the slowdown, Microsoft has big plans for its ad business. The story was the same for LinkedIn which posted a 14% revenue increase, despite weakness in advertising that dragged down the gain. Excluding TAC, the company expects search and news advertising to grow high-single digits. Search and news advertising, which includes Bing, are expected to grow in the low single digits for the rest of the fiscal year, ending June 30, if traffic acquisition costs (TAC) are deducted from revenue. “Advertising spend declined slightly more than expected, which impacted Search and news advertising and LinkedIn Marketing Solutions,” according to Microsoft CFO Amy Hood. Microsoft revealed weakness in its advertising business in its latest quarterly earnings report and analyst call.
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