Microsoft's latest revenue report indicates major profits returns in the FY11 Q2 including gains in search revenue, but online services are not contributing to overall gains.

Brafton has reported that Google maintains its role as the search leader, and it seems this could be costing Microsoft. The company's latest revenue report indicates major profit returns in Q2 FY11, including gains in search revenue, but online services are not contributing to overall gains.

Microsoft posted revenue gains in its entertainment and devices division and its business division, but it saw significant losses in its online services division. The company lost $543 million in Q2, worse than its $463 million loss during the same period last year.

Nonetheless, online ad revenues are up 23 percent. These earnings are consistent with Brafton’s reports that Bing continues to gain paid search ground, especially now that its Yahoo ad integration is complete. Marketer might want to continue to plan ad campaigns and optimize their sites for Bing accordingly.

In spite of losses in online services, Microsoft officials seem hopeful that Bing will rise in the market. Bill Koefoed, Microsoft's general manager of investor relations, suggests that social innovations based on the company's partnership with Facebook will help it generate revenue in the future.

“We believe the addition of these new social features is another way to deliver innovation and valuable enhancements to the Bing experience,” he said in a public earnings call.

Katherine Griwert is Brafton's Marketing Director. She's practiced content marketing, SEO and social marketing for over five years, and her enthusiasm for new media has even deeper roots. Katherine holds a degree in American Studies from Boston College, and her writing is featured in a number of web publications.