- Microsoft announced strong Q3 2020 for LinkedIn and Azure.
- Advertiser demand went up 40% YoY on LinkedIn, while Microsoft’s Azure saw revenues grow 48%.
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Spotlighting its focus on digital transformation, Microsoft announced strong Q3 2020 earlier this week. The tech giant’s diversified portfolio of products and services for marketers and businesses fueled its 12% revenue increase this quarter.
LinkedIn revenues grew 16% in Q3. With more than 722 million users worldwide, LinkedIn saw record-setting engagement levels on its platform. Microsoft credited a redesign that featured a new messaging experience, search functionality, and Stories. Many professionals also spent time on LinkedIn looking for work amid the pandemic: Microsoft said that nearly 40 million job seekers used the site in Q3.
Increased user engagement coupled with a recovering ad market means that advertisers are returning to LinkedIn. Microsoft said that advertiser demand on LinkedIn “returned to near pre-COVID levels” and was up 40% year over year (YoY). We estimate that LinkedIn’s US ad revenues will grow 8.0% this year to $1.70 billion. The US B2B digital ad market will grow 22.6%, and with LinkedIn being a primary advertising channel for B2B marketers, it isn’t surprising that ad revenues are propping up growth.
Beyond LinkedIn, several other Microsoft products drove growth as well:
- Microsoft’s cloud platform Azure saw revenues grow 48%, proving that digital transformation is a main priority for companies navigating the pandemic.
- Commercial Office 365, which includes enterprise collaboration tool Teams, revenues grew 21% this quarter, as remote work remains the norm for many companies. This tracks with our estimates: This year, 69.0% of US companies with more than 100 employees will use communication and collaboration tools, up from the 54.0% of companies that used such tools last year.
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