Contrary to market researcher's reporting gloom in online advertising, MSN's online advertising revenue jumped by 40 percent in the period between June 30 and Sept.30 this year according to company sources.
For the 2002 fiscal year, which ended June 30, MSN's online ad revenue grew $40 million. On the other hand, the Interactive Advertising Bureau and PricewaterhouseCoopers have found that overall online advertising sales dropped 20 percent during the first six months of the year compared with the same period in 2001.
However, a research firm CMR, by contrast, has reported a 2 percent gain for the same period. Online ad spending topped $1.5 billion for the first six months of the year, according to CMR. Advertisers spent $211 million on AOL Time Warner's America Online division, $204 million on Yahoo and a little more than $201 million on MSN, the market researcher concluded.
Certainly, MSN rivals AOL and Yahoo have had their troubles. Yahoo saw ad revenue drop by about $200 million last year. On Wednesday, AOL reported that third-quarter advertising and commerce revenue plummeted 48 percent year over year to $267 million.
During the Internet bubble years, start-ups flush with venture capital commonly struck multiyear, multimillion-dollar agreements for exclusive carriage on Web portals. Many of these deals, however, collapsed when the start-ups collapsed due to the market downturn. The ripple effect pulled the rug out from under the beneficiaries. Microsoft has not experienced the same revenue collapse as its competitors because it didn't strike these long-term commitments, MSN claims.