Yusuf Mehdi has been boasting on CNet about the revenue traction MSN has been getting of late. Full article here.

There are some key facts for those familiar with the RealNames story. Start with this quote from Mehdi:

“For the 2002 fiscal year, which ended June 30, MSN’s online ad revenue grew $40 million, he said. Between June 30 and Sept. 30, it jumped 40 percent.”

Well, RealNames was delivering 600 million Keyword resolutions a quarter in the January-March 2002 quarter. This was growing 20% per month. Divide that by 1000 and you get 600,000 cpm earning events. MSN apparently gets about $40 cpm from the multiplicity of revenue earning parts of its search pages.
600,000 time $40 is what, $24 million.

So – where is that revenue growth coming from? Since June all RealNames Keyword queries have become MSN search queries. 600-700 million more page views in the quarter. My guess is that this is responsible for almost all of the growth.

Interestingly the CNet authors spotted the obvious:

“Industry studies contradict Mehdi’s conclusions about the overall health of the online ad market. The Interactive Advertising Bureau and consultancy PricewaterhouseCoopers found that online advertising sales dropped 20 percent during the first six months of the year compared with the same period in 2001.”

What they didn’t do is figure out what caused this apparent counter-cyclical trend.

You read it here first.