Online advertising revenue grew $143 million or 22% to $784 million, reflecting continued growth in search advertising revenue, offset in part by decreased display advertising revenue. Search revenue grew, primarily due to increased revenue per search. According to third-party sources, Bing organic U.S. market share for the month of March 2013 was approximately 17%, and grew 160 basis points year over year. Bing-powered U.S. market share, including Yahoo! Inc. (“Yahoo!”) properties, was approximately 26% for the month of March 2013, which grew 20 basis points year over year.
OSD’s operating loss was reduced by higher revenue and lower cost of revenue and sales and marketing expenses. Cost of revenue decreased $65 million, driven by lower traffic acquisition costs. Sales and marketing expenses decreased $31 million or 15%, due mainly to decreased advertising and corporate sales and marketing activities.