Microsoft is tops in Web traffic in December

Microsoft leads in Web site visitors globally, but its online ad business is struggling.

Microsoft drew the largest number of Web site visitors worldwide in December, a recurring accomplishment that makes the company's disappointing online ad business all the more disconcerting.

Close to 509 million unique visitors, ages 15 and up, went to Microsoft Web sites in December, comScore Networks said Wednesday. Google came in second with a little over 494 million, while Yahoo landed in third place with almost 477 million unique visitors.

Microsoft also led in March 2006, and its lead over Google was bigger. Microsoft had almost 539 million unique visitors to almost 496 million for Google. Third place went to Yahoo with little over 480 million.

However, the difference in online ad revenue between Microsoft and its two rivals is massive, a sign that, despite heavy investments in the past three years, Microsoft isn't close to matching their ability to monetize Web site traffic, especially Google's torrid growth in the search engine space.

In the quarter ended Sept. 30, 2006, Google's revenue, which comes mostly from search engine ads, grew 70 percent to US$2.69 billion, while Yahoo's revenue, mostly derived from various forms of online ads, came in at US$1.58 billion, up 19 percent. By comparison, in that same quarter, Microsoft's Online Services Business, which includes online ad and Internet access sales, generated only US$539 million in revenue, down from US$564 million in the same quarter the previous year.

Microsoft executives have acknowledged that the Achilles heel of its online ad business is its search engine segment. In December, Microsoft's share of U.S. search engine queries continued to fall, landing at 10.5 percent, a distant third place from leader Google, which nabbed 47.3 percent, comScore said in a separate study. In July 2005, Microsoft's U.S. search engine query share stood at 15.5 percent and Google's at 36.5 percent, according to comScore.

Overall, unique Web site visitors grew 10 percent globally from December 2005 to December 2006 to almost 741 million. Microsoft and Yahoo both grew 5 percent each. However, Google topped the market growth with a 13 percent increase, in part due to its international appeal and to the rising popularity of some of its non-Web search services, comScore said. For example, Google's image search engine grew its unique visitors by 40 percent, Gmail by 71 percent and Google Maps by 62 percent.

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