The company, with advertising supported businesses including its Bing search engine, MSN news
service and LinkedIn business social network, disclosed this month that its search ads sales grew 1% to $7.7 billion over the last year. But that growth was flat when excluding fees it pays to partner websites and apps.
The ad market research company eMarketer has estimated LinkedIn's ad revenue at about $2 billion annually in the United States alone. But Microsoft also said this month LinkedIn ads sales have fallen this year as the novel coronavirus pandemic prompted advertisers to pare spending.
Social media services, including Facebook Inc and Alphabet Inc's YouTube, have seen their sales growth continue during the pandemic as users spend more time entertaining themselves online - particularly with video - and advertisers follow them there.
Without an entertainment service aimed at a broad audience, Microsoft has struggled to capture the increasingly lucrative videos flowing to YouTube, Facebook and more recently TikTok, which widely opened its ad tools this month.
Increased US regulatory scrutiny of potentially anticompetitive behavior by Facebook and YouTube have likely diminished their ability to purchase a major competitor soon, according to antitrust experts. Microsoft, though, faces fewer constraints.
"Its consumer strategy remains in flux and an aggressive acqUSition (or strategic investment) of TikTok
would be Microsoft throwing its hat in the ring and trying to compete with other tech giants in a new avenue of growth," Wedbush financial analyst Dan Ives said in a statement on Friday.