by Laurie Sullivan , Staff Writer @lauriesullivan, July 21, 2017

Microsoft reported that revenue in third-quarter 2017 from search advertising rose $124 million or 8%. But on the quarterly earnings call Thursday there wasn’t much talk of search ad revenue, except to note that it rose 10% during the second quarter in 2017, primarily driven by growth in Bing due to higher revenue per search and search volume. The numbers excluded traffic acquisition costs.

Gross margin rose $398 million or 9%, driven by growth in Windows, Phone, Gaming, and Search advertising, and partially offset by a decline in Surface.

A few days earlier, Merkle gave advertisers more information on volume and clicks in its quarterly report. Merkle estimates that Bing Product Ads accounted for 20% of retailers’ search clicks on the Bing Ads platform in second-quarter 2017 — up a point from the previous quarter. Bing Product Ads produced 34.5% of non-brand Bing search ad clicks for retailers in second-quarter 2017, per the report.

About 12% of Bing search ad clicks by mobile phones paled in comparison to the 78% on desktop, which rose a point from a quarter earlier, according to Merkle.

The Surface business performed better than expected, declining 2% with strong sales for Surface Pro products, which could be a good sign for the launch of GLAS, a smart thermostat similar to Google’s Nest.

GLAS — a joint project between Microsoft and Johnson Control — runs on Microsoft technology such as the Azure cloud platform, Cortana, and Windows IoT core, a version of Windows 10, according to a video on YouTube released Wednesday.

If anyone asks during your power lunch today, Microsoft’s cloud business helped to push up revenue by 11% to $7.4 billion, with Azure revenue growth of 97%. Cloud services rose, but Enterprise Services fell by 3% due to declines in customer agreements.

MediaPost.com: Search Marketing Daily

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