Microsoft figured out a clever way to mint cash with its second-place search engine (MSFT)

AP

Microsoft just announced that advertising revenue from the Bing search engine was up 16% year-on-year during the last quarter, thanks to its deep integration with Windows 10. 

By default, the Cortana virtual assistant that's built into Windows 10 opens links in the Microsoft Edge browser and performs searches using the Microsoft Bing search engine. It's a pretty shrewd bit of corporate synergy that's driving Bing to new heights.

In the month of June, Microsoft says in a slide deck for investors, more than 40% of all Bing search revenue came from Windows 10 users, up from 35% in March.

Microsoft is excluding traffic-acquisition costs from that figure, which are the costs paid to third parties to drive traffic to Bing, so we don't know exactly how much revenue Windows 10 is generating for Microsoft in this way.

But given that Microsoft recently locked users out from using Google with Cortana, it means that those users are a captive audience for Bing. And as Microsoft marches towards one billion Windows 10 users, as is its goal, it means more Bing users coming down the pipeline.

That said, Google, the world's number one search engine, is doing just fine — in the first quarter, Google's search revenue was up 16% to $18 billion, and it's doubtful that that's going to slow down when Google announces its own earnings on July 28th.

Google doesn't have to lose for Bing to win, but it's certainly a nice feather in Microsoft's cap that they can capture some of a market where once they were thought of as an also-ran.

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